SBP imposes Rs1.35 billion as monetary penalty on commercial banks

KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty to the tune of Rs1.35 billion on commercial banks in five months for violating regulatory environment.

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

The SBP imposed Rs192.66 million as penalty on four banks during the month of November 2019 for violating mainly regulations related to 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 five months (July – November) 2019 increased to Rs1,351.28 million.

According to the highlights of significant enforcement actions by the SBP during November 2019, the central bank imposed Rs192 million as monetary penalties.

The central bank on November 05, 2019 imposed penalty amount of Rs60.8 million on Allied Bank Limited for violating CDD/KYC.

“In addition to penal action, the bank has been advised to conduct an internal inquiry on breaches of regulatory requirements and take a disciplinary action against the delinquent officials,” the SBP said.

The central bank o n November 06, 2019 imposed an amount of Rs91.85 million on MCB Bank Limited for violating CDD/KYC.

“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.”

The SBP on November 06, 2019 imposed penalty of Rs14 million on the Bank of Punjab for violating CDD/KYC.

“In addition to penal action, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”

The SBP on November 07, 2019 imposed monetary penalty of Rs26 million on Habib 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.”

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