Karachi, July 27, 2023 – The State Bank of Pakistan (SBP) has taken a firm stance against regulatory violations in the banking sector, imposing a total monetary penalty of Rs 575 million on 11 banks during the first half (January – June) of calendar year 2023.
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In the first quarter (January – March), five banks faced the brunt of the SBP’s enforcement actions. Askari Bank Limited was penalized Rs 83.415 million, Sindh Bank Limited faced a penalty of Rs 55.393 million, Zarai Taraqiati Bank Limited received a fine of Rs 37.263 million, Soneri Bank Limited was penalized Rs 27.449 million, and Mobilink Microfinance Bank Limited incurred a penalty of Rs 20.467 million.
Continuing its vigilance into the second quarter (April – June), the central bank extended the monetary penalty to six additional banks. National Bank of Pakistan (NBP) faced the highest penalty at Rs 144.207 million, followed by Bank Alfalah Limited (BAFL) with a fine of Rs 125.253 million. Meezan Bank Limited (MBL) faced a penalty of Rs 38.03 million, Allied Bank Limited (ABL) was fined Rs 20.66 million, Punjab Provincial Cooperative Bank Limited incurred a penalty of Rs 12.229 million, and Bank Al Habib Limited (BAHL) received a fine of Rs 10.42 million.
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The SBP’s actions came after detecting various regulatory violations by these banks. The violations included failures in Customers Due Diligence (CDD) and Know Your Customer (KYC) procedures, as well as non-compliance with regulations pertaining to asset quality. Additionally, the banks were found guilty of violating regulations related to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. The central bank also found instances where the banks had breached regulations concerning foreign exchange and general banking operations.
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These strict penalties by the SBP serve as a clear warning to all financial institutions operating in Pakistan that adherence to regulatory guidelines and compliance is of utmost importance. The central bank is committed to maintaining the integrity and stability of the banking sector, and any violations will be met with severe consequences.
The SBP’s actions are expected to strengthen public trust in the banking system and act as a deterrent against future misconduct in the industry. As the year progresses, the central bank is likely to keep a close eye on all banks’ operations to ensure that they are in line with the required regulatory standards, safeguarding the interests of both customers and the financial sector as a whole.
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