State Bank of Pakistan has imposed heavy penalties worth Rs. 98 million on Pakistan’s three profitable banks namely Habib Bank Limited, MCB Bank, and United Bank Limited as they were found violating its rules and regulations.
SBP’s responsibilities include taking supervisory enforcement actions against those institutions that fail to comply with legal or regulatory requirements and these actions may range from the imposition of penalties, administrative and financial sanctions, and reference to concerned law enforcement/prosecution agencies.
According to details released by SBP, out of all the banks, Habib Bank Limited faced the highest penalty of Rs 39.772mn in violations of regulatory instructions pertaining to FX & General Banking Operations In addition to penal action the bank has been advised to strengthen its processes with respect to identified areas.
Read More: SBP and SECP join hands to tackle money laundering in Pakistan
MCB Islamic Bank Limited- a subsidiary of the MCB Bank also faced a penalty of Rs 37.095mn for violations of regulatory instructions pertaining to AML/CFT, FX & General Banking operations. Apart from the penal action, the bank was also ordered to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the offenders.
MCB Bank Limited itself was slammed with a penalty of Rs 10.00mn in violations of regulatory instructions pertaining to General Banking Operations.
The United Bank Limited was also penalized Rs 10.71mn for violations of regulatory instructions pertaining to CDD/KYC & General Banking Operations. The bank has been asked to strengthen its processes to avoid recurrence of such violations.
“These actions are based on deficiencies in the compliance of regulatory instructions and do not constitute a comment on the financial soundness of the entity”, said SBP in a statement.
The three banks were slammed with fines owing to their failure to comply with the regulatory instructions related to foreign exchange and general banking operations, customer due diligence and anti-money laundering, said the State Bank of Pakistan.