SBP imposes monetary penalty on eight banks State Bank of Pakistan

SBP imposes monetary penalty on eight banks

KARACHI: The State Bank of Pakistan (SBP) took decisive action on Thursday, announcing hefty monetary penalties totaling Rs525.23 million against eight commercial banks for violating regulatory provisions during the quarter ended June 30, 2021.

1. Bank Alfalah Limited (Rs11.1 million):

• Penalty Reason: Violation of regulatory instructions related to Asset Quality & General Banking Operations.

• Additional Measures: Instructed to strengthen processes in identified areas.

2. MCB Bank Limited (Rs289.091 million):

• Penalty Reason: Breach of regulatory instructions concerning AML/CFT & General Banking Operations.

• Additional Measures: Directed to conduct an internal inquiry on breaches and take disciplinary action against delinquent officials.

3. First Women Bank Limited (Rs31.57 million):

• Penalty Reason: Violation of regulatory instructions related to Asset Quality, CDD/KYC & General Banking Operations.

• Additional Measures: Advised to enhance processes in identified areas.

4. Sindh Bank Limited (Rs62.17 million):

• Penalty Reason: Violation of regulatory instructions covering AML/CFT, Asset Quality, FX & General Banking Operations.

• Additional Measures: Instructed to conduct an internal inquiry and take disciplinary action against those responsible.

5. Soneri Bank Limited (Rs12.59 million):

• Penalty Reason: Breach of regulatory instructions concerning CDD/KYC, FX & General Banking Operations.

• Additional Measures: Advised to strengthen processes in identified areas.

6. Zarai Taraqiati Bank Limited (Rs75.759 million):

• Penalty Reason: Violation of regulatory instructions related to AML/CFT, Asset Quality & General Banking Operations.

• Additional Measures: Directed to conduct an internal inquiry on breaches and take disciplinary action against delinquent officials.

7. The Punjab Provincial Cooperative Bank Limited (Rs32.5 million):

• Penalty Reason: Breach of regulatory instructions pertaining to AML/CFT.

• Additional Measures: Instructed to conduct an internal inquiry and take disciplinary action against those responsible.

8. Pak Brunai Investment Company Limited (Rs10.44 million):

• Penalty Reason: Violation of regulatory instructions related to CDD/KYC, Asset Quality & General Banking Operations.

• Additional Measures: Advised to strengthen processes in identified areas.

The SBP emphasized that these penalties were imposed to uphold the integrity of the financial system and ensure compliance with established regulatory frameworks. In addition to financial penalties, the banks have been given specific directives to rectify the identified shortcomings and enhance their internal controls.

This move by the SBP underscores the importance of maintaining high standards of governance and adherence to regulatory guidelines within the banking sector. The penalties aim to serve as a deterrent against non-compliance and reinforce the commitment to a robust and transparent financial ecosystem. The affected banks are now expected to take prompt corrective actions to address the regulatory lapses and fortify their systems.