SBP imposes penalty of Rs109 million on four banks

KARACHI: The State Bank of Pakistan (SBP) has imposed an amount of Rs109 million as monetary penalty on four banks for violating regulatory provisions, including anti-money laundering (AML) and countering financing of terrorism (CFT).

The central bank on Wednesday issued details of monetary penalty imposed on banks during quarter (January – March) 2022 for regulatory violations.

According to details the highest penalty amount of Rs40.90 million has been imposed on Albaraka Bank (Pakistan) Limited for violating regulatory instructions pertaining to AML/CFT, Asset Quality, FX & General Banking Operations etc.

In addition to penal action, the SBP directed the bank to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.

The second highest penal amount Rs38.50 million has been imposed on Askari Bank Limited for violation of regulatory instructions pertaining to Customer Due Diligence (CDD) / Know Your Customer (KYC), asset management and general banking operations.

The SBP directed Askari Bank to strengthen its controls/processes in the identified areas.

The central bank also imposed monetary penalty amounting Rs19.27 million and Rs10.265 million on National Bank of Pakistan (NBP) and U Microfinance Bank Limited, respectively.

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.