National Bank pays Rs310.29 million as penalties for regulatory violations

National Bank pays Rs310.29 million as penalties for regulatory violations

KARACHI: National Bank of Pakistan (NBP) has paid an amount of Rs310.29 million as penalty to State Bank of Pakistan (SBP) for violating regulatory provisions.

According to the financial results of the bank for the year ended December 31, 2020, the SBP imposed Rs310.59 million as penalties during the year, which was paid by the NBP.

The SBP imposed penalty on the bank for procedural violations in the areas of Customer Due Diligence (CDD)/Know Your Customer (KYC), Asset Quality, Foreign Exchange Operations.

The imposition of penalties by the SBP on the National Bank increased by 120 percent in the year 2020 as the penal amount on the NBP was Rs141 million in the preceding year.

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.

The total amount of penalties paid by the NBP was Rs316.44 million for the year ended December 31, 2020 as compared with Rs150.58 million in the preceding year.

An amount of Rs4.72 million was also imposed by central bank of international branches on the National Bank of Pakistan.