Karachi, January 30, 2024 – Mobilink Microfinance Bank Limited is facing the repercussions of breaching Anti-Money Laundering (AML) and Combating of Terror Financing (CFT) regulations, as the State Bank of Pakistan (SBP) has imposed a substantial penalty of Rs 35.11 million.
The penalty is a result of violations identified during the calendar year 2023.
The SBP, the central bank of Pakistan, took action against Mobilink Bank in two quarters of 2023. During the quarter ended March 31, 2023, Mobilink Bank incurred a penalty of Rs 20.47 million. Additionally, a penalty of Rs 14.64 million was imposed during the quarter ended December 31, 2023.
The violations primarily revolved around non-compliance with regulatory instructions related to AML/CFT, Customer Due Diligence (CDD)/Know Your Customer (KYC), and General Banking Operations. The SBP, in its statement, expressed concern over Mobilink Bank’s failure to adhere to crucial guidelines designed to prevent money laundering and combat the financing of terrorism.
The central bank clarified that the penal action was not the sole consequence for Mobilink Bank. In addition to the monetary penalty, the SBP has directed the microfinance bank to conduct an internal inquiry. The inquiry is expected to delve into the regulatory violations associated with Branchless Banking, and the bank is urged to take appropriate actions based on the findings.
The imposition of such a substantial penalty underscores the seriousness with which regulatory bodies view AML and CFT compliance. Money laundering and terror financing pose significant threats to the stability and integrity of financial institutions and can have far-reaching consequences for a country’s financial system.
Mobilink Bank, as part of the larger financial ecosystem, is expected to review and enhance its internal controls and processes to ensure strict compliance with AML and CFT regulations. The internal inquiry mandated by the SBP is likely to scrutinize the bank’s operations and identify areas where improvements are needed to prevent future breaches.
The SBP’s decision also serves as a reminder to other financial institutions to remain vigilant and proactive in implementing and reinforcing AML and CFT measures. Failure to comply with these regulations not only leads to financial penalties but can also damage the reputation of the institution, eroding customer trust and confidence.
As Mobilink Bank navigates through the aftermath of this penalty, stakeholders, including customers and shareholders, will be closely monitoring the bank’s response and actions taken to rectify the regulatory breaches. The episode also highlights the ongoing efforts by regulatory authorities to maintain the integrity and transparency of the financial system, fostering a secure environment for economic activities in Pakistan.
