Karachi, April 17, 2024 – The State Bank of Pakistan (SBP) has wielded its regulatory authority, imposing a hefty penalty of Rs 776 million on several banks and an exchange company for breaching regulations during the first quarter of 2024, which ended on March 31.
Official details released by the SBP outline the penalties levied on eight banks and one exchange company, underscoring the central bank’s commitment to upholding regulatory compliance within the banking sector.
Leading the list of penalized entities is Bank Alfalah Limited, which incurred the highest penalty amounting to Rs 187.65 million. The penalty was imposed on Bank Alfalah for violations related to regulatory instructions concerning foreign exchange transactions and general banking operations.
Habib Bank Limited (HBL) followed closely behind, facing a substantial penalty of Rs 143.38 million. HBL’s infractions pertained to regulatory instructions regarding Customer Due Diligence (CDD), Know Your Customer (KYC), foreign exchange transactions, and general banking operations.
Bank Al Habib emerged as the third-highest penalized institution, with a monetary penalty of Rs 117.24 million. The penalty imposed on Bank Al Habib was attributed to violations of regulatory instructions concerning CDD/KYC procedures and foreign exchange transactions.
Other banks subject to monetary penalties include Meezan Bank Limited (Rs 106.20 million), Habib Metropolitan Bank Limited (Rs 70.92 million), MCB Bank Limited (Rs 52.90 million), MCB Islamic Bank Limited (Rs 38.544 million), and Bank of Khyber (Rs 30.74 million). Each of these banks incurred penalties for various breaches of regulatory directives, reflecting the SBP’s stringent oversight of banking operations.
In addition to penalizing banks, the SBP also imposed a penalty of Rs 27.98 million on Royal Exchange Company for violations related to Customer Due Diligence (CDD), Know Your Customer (KYC), and General Banking Operations.
The imposition of these penalties underscores the SBP’s unwavering commitment to maintaining the integrity and stability of the banking sector. By holding financial institutions accountable for regulatory non-compliance, the SBP aims to safeguard the interests of depositors and investors while fostering transparency and trust within the banking industry.
The penalties levied by the SBP serve as a stark reminder to banks and exchange companies of the importance of adhering to regulatory guidelines and best practices. In an environment characterized by evolving financial risks and challenges, compliance with regulatory standards is imperative to ensure the resilience and credibility of Pakistan’s banking system.
As the SBP continues its vigilant oversight of the banking sector, financial institutions are urged to prioritize regulatory compliance and adopt robust risk management practices to mitigate potential penalties and safeguard their reputations in the marketplace.
