SBP imposes penalty on five banks for violation

KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty on five banks including Summit Bank, Habib Metropolitan Bank, MCB Bank, National Bank of Pakistan and Bank Alfalah for violating regulatory environment.

The central bank on Tuesday issued significant enforcement measures by imposing monetary penalty on banks for violating rules, regulations and other regulatory environment.

The SBP imposed Rs219.138 million as penalty on five banks during the month of December 2019 for violating mainly regulations related to foreign trade operations, Customers Due Diligence (CDD) and Know Your Customer (KYC).

The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions

With the latest penal action the total amount of penalty during first six months (July – December) 2019 increased to Rs1,569 million.

According to the highlights of significant enforcement actions by the SBP during December 2019, the central bank imposed Rs219.138 million as monetary penalties.

The central bank on December 11, 2019 imposed penalty amount of Rs17.422 million on Summit Bank Limited for procedural violations in the area of foreign exchange operations.

“Monetary penalty was imposed on deficiencies in the area of foreign trade operations,” the SBP said.

The central bank on December 11, 2019 imposed an amount of Rs34.578 million on Habib Metropolitan Bank Limited for violating CDD/KYC.

“In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”

The SBP on December 12, 2019 imposed penalty of Rs49.499 million on MCB Bank Limited for procedural violations in the area of foreign exchange operation.

“Monetary penalty was imposed on deficiencies in the area of foreign trade operations.”

The SBP on December 18, 2019 imposed monetary penalty of Rs21.544 million on National Bank of Pakistan for violating CDD/KYC.

“In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”

The SBP on December 23, 2019 imposed monetary penalty of Rs96.095 million on Bank Alfalah Limited for violating KYC/CFT.

“In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violation of regulatory requirements. Further, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”

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