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Tag: NBP

  • National Bank under grip of regulatory violations

    National Bank under grip of regulatory violations

    National Bank of Pakistan in a notice sent to Pakistan Stock Exchange (PSX) disclosed that it reached an agreement with US regulators of NBP’s New York branch with fines of $55 million arising due to historical compliance weakness and delays in making compliance related enhancements.

    However, there were no findings of improper transactions or willful conduct as per the notice.

    Latest press release by U.S Department of Financial Services stated: “The National Bank of Pakistan allowed serious compliance deficiencies in its New York branch to persist for years despite repeated regulatory warnings. Foreign banks that enjoy the privilege of operating in New York have an obligation to maintain effective controls, and the Department will continue to promote financial transparency and take action to protect the global financial system when those obligations are not met”.

    READ MORE: US central bank imposes $20.4 million penalty on NBP

    Following examinations conducted by the Department and the Federal Reserve Bank of New York in 2014 and 2015, NBP’s New York branch was found to have inadequate Bank Secrecy/Anti-money compliance programs.

    As a result, enforcement action against NBP was taken in 2016 where NBP agreed to improve compliance deficiencies which later on it failed to do so. As a result, the bank will now be subject to $35 million penalty in addition to certain deliverables for the improvement in its compliance program.

    READ MORE: NBP lends Rs18.8bn in Hascol’s Rs54bn scam

    In addition to the fine by U.S Department of Financial Services, Federal Reserve Board also imposed $20.4million penalty against NBP on anti-money laundering violations totaling penalty to $55million which translates into Rs9.7billion (Rs4.6/share). In 9M2021, the bank has so far reported earnings of Rs25billion.

    Analysts at Topline Securities said that previously HBL also faced a similar fine in 2017 where the U.S regulators initially imposed a penalty of US$630million on HBL on non-compliance of Anti-money laundering laws, which was later revised down to US$225million.

    NBP is also faced with a pending pension liability case with potential liabilities of over Rs70 billion under which the company had filed a review petition in Supreme Court of Pakistan where further judgement is still awaited. The bank due to the aforementioned reason has skipped dividends since 2017, we believe.

  • US central bank imposes $20.4 million penalty on NBP

    US central bank imposes $20.4 million penalty on NBP

    KARACHI: The central bank of the United States on Thursday imposed a monetary penalty of $20.4 million on New York branch of Pakistan’s largest public sector bank for violating anti-money laundering laws.

    A statement issued by the Federal Reserve Board, the US central bank, has announced a $20.4 million penalty against the National Bank of Pakistan (NBP) for anti-money laundering violations.

    READ MORE: NBP lends Rs18.8bn in Hascol’s Rs54bn scam

    “The Board will also require the firm to improve its anti-money laundering program,” it added.

    As detailed in the consent cease and desist order against the NBP, the firm’s U.S. banking operations did not maintain an effective risk management program or controls sufficient to comply with anti-money laundering laws.

    The Board’s action is in conjunction with an action by the New York State Department of Financial Services, according to the statement.

    READ MORE: NBP directed to pay Rs0.5 million to fraud victim

    The board of governors of the Federal Reserve System directed the NBP to improve corporate governance and management oversight. The National Bank of Pakistan and its New York Branch have been asked to jointly submit a written plan to enhance oversight. The plan shall provide for a sustainable governance framework.

    READ MORE: No disruption in transactions post cyber-attack on NBP

    It is further directed that within 60 days of the order, the bank and the bank branch shall jointly submit a written revised Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) compliance program for the branch that is acceptable to the Reserve Bank.

    Furthermore, the bank has been advised to submit a written revised customer due diligence program acceptable to the Reserve Bank.

    READ MORE: NBP announces Rs17.04 billion as half year profit

  • NBP lends Rs18.8bn in Hascol’s Rs54bn scam

    NBP lends Rs18.8bn in Hascol’s Rs54bn scam

    KARACHI: National Bank of Pakistan (NBP) has lent an amount of Rs18.8 billion out of Rs54 billion scam in Hascol Petroleum Limited.

    National Assembly Standing Committee on Finance and Revenue on Thursday reviewed the performance of NBP.

    The committee also discussed the recent Hescol loan scam of Rs 54 billion; of this NBP had lent Rs18.8 billion. MNAs expressed their reservations on loan security procedures, mainly when the amount of loan was so big.

    READ MORE: NBP directed to pay Rs0.5 million to fraud victim

    The committee expressed dissatisfaction over the performance of the bank and emphasized on more corrective steps on administrative and financing sides; especially for financial inclusion in rural and remote areas of the country.

    Headed by MNA Faizullah, NA standing committee members included Abdul Wasay, Chaudhry Khalid Javed, Dr. Nafisa Shah, Ali Pervaiz Malik, Muhammad Israr Tareen, Qaiser Ahmed Sheikh, Faheem Khan and Jamil Ahmed Khan.

    READ MORE: No disruption in transactions post cyber-attack on NBP

    The chairman formed a sub-committee to look into the issues/queries raised by the standing committee members, and the discrepancies surfaced in the bank’s lending and administrative matters.

    It will submit its detailed report to the main NA standing committee at the earliest for its recommendations to the concerned government authorities through the National Assembly.

    Earlier, NBP’s Group Heads gave sector-wise presentations to the Committee.

    The committee members desired that NBP President, who was on leave, would have been present and could better respond to their queries.

    A day earlier, the bank said it was cooperating with the Federal Investigation Agency (FIA) in the multibillion scam.

    READ MORE: NBP announces Rs17.04 billion as half year profit

    The FIA arrested Mumtaz Hasan, founder of the Hascol Petroleum Limited (HPL), on January 23, 2022. It said a total of 30 suspects — including present and former top officials of the NBP, HPL and other organisations — had been booked in the case and that efforts were under way to arrest the remaining suspects.

    “As has been reported in the press, the FIA is conducting an inquiry on Hascol Petroleum’s banking arrangements with the NBP as well as several private and other public sector banks,” the NBP said.

    The bank said it had been and continued to cooperate fully with the FIA on this investigation and made available all relevant records and transactional history, including arranging meetings with its employees who have managed Hascol’s relationship with the bank.

    READ MORE: Probe in Hascol financials underway: SECP

  • USC, NBP complete integration for Ehsaas Rashan

    USC, NBP complete integration for Ehsaas Rashan

    ISLAMABAD: Utility Stores Corporation (USC) and National Bank of Pakistan (NBP) on have completed integration to launch provision of subsidized items under Ehsaas Rashan Riayat Program.

    Senator Dr. Sania Nishtar, SAPM together with MD USC, Taha Aziz Magrabi visited a Utility Store in G-6 Islamabad to field test the integration of data and Point of Sales (PoS) systems between Ehsaas, National Bank of Pakistan (NBP) and USC under the Ehsaas Rashan Riayat programme.

    READ MORE: USC automation to ease provision of targeted subsidy

    At the Utility Store, Dr. Sania witnessed the first transaction and met with the first cohort of beneficiaries who were declared eligible under the testing phase, after they enrolled for Ehsaas Rashan through 8171.

    Through the newly integrated system, the eligibility of the buyers was verified, and they were able to avail subsidy on the purchase of flour, cooking oil, ghee and pulses.

    READ MORE: USC to announce special discount package for Ramazan

    “It is very encouraging to see the successful system and data integration which is a result of the hard work of USC, NBP and Ehsaas teams.

    “This is, in fact, a great milestone. The integrated Point of Sale system will enable the USC to pass on the Ehsaas Rashan subsidies to eligible families”, said Dr. Sania.

    Adding further, she said, “Work under the Ehsaas Rashan programme is underway, registration and scrutiny of applicants is ongoing and very soon the Ehsaas Rashan subsidies will be available through a network of Utility Stores of Corporation and NBP authorized Kiryana stores all over the country.”

    With the launch of Rashan Riayat, close to 4000 locations of Utility Stores will go live on the same day. The beneficiaries will follow the same check out experience as they do at any other NBP enabled Kiryana store i.e. CNIC and cell phone. To make it easy for the customers Utility Stores will also have the signboard “Ehsaas Rashan Riayat” displayed.

    READ MORE: USC officials warned against misusing subsidy

    MD Utility Stores said that the Ehsaas Rashan subsidies will also be operationalized shortly through a network of Utility Stores all over the country.

    Under the Rs. 120 billion programme, a subsidy of Rs. 1,000 a month will be granted to each of 20 million eligible families on the purchase of flour, pulses, cooking oil and ghee.

    Captain (Rtd) Saeed Ahmed Nawaz, Additional Secretary Poverty Alleviation and Social Safety Division; Gul Bahar Khan, General Manager NBP; Hisham Jan Kiani, Regional Head North NBP; and senior officials of Utility stores including GM Store Operations, GM IT, Zonal Manager, Regional Manager Islamabad and Manager Coordination were also present.

    READ MORE: Sindh governor visits USC outlets to check availability of essential items

  • No disruption in transactions post cyber-attack on NBP

    No disruption in transactions post cyber-attack on NBP

    KARACHI: 1LINK, transaction service provider to banks, on Sunday confirmed that there was no disruption of any interoperable banking services during or after the cyber-attack on one of the major banks in Pakistan.

    All transactions, both financial (ATM cash withdrawal, 1IBFT-Inter Bank Funds Transfer and Bill Payments) and non-financial transactions (balance inquiry, title fetch and bill inquiry) are completely functional and safe.

    There was no downtime from Thursday, October 28, 2021, till now, and the transaction volumes suggest that consumers are conducting transactions as usual.

    This clarification is to dispel all rumors and give comfort to all banking customers that Pakistan’s Payment Systems and Digital Banking is safe, as neither customer data is compromised, nor any compromise has been reported through 1LINK grid or its member banks.

    The State Bank of Pakistan (SBP) on Saturday stated that the National Bank of Pakistan (NBP) had reported a cyber security related incident which is being investigated.

    “The bank has not observed any data breach or financial loss. No other bank has reported any such incidence,” the central bank said. The SBP added that it was monitoring the situation closely to ensure safety and soundness of banking system.

    State Bank of Pakistan, 1LINK and all banks are closely monitoring the situation to ensure continued safety and soundness of the banking and digital payments system.

    Customers can comfortably conduct their transactions using their accounts, mobile apps, internet banking and debit and credit cards through all available channels, i.e., ATMs, POS terminals, internet banking, mobile banking, OTC and other digital means. However, customers are advised to practice extreme caution in safeguarding their digital credentials which are required to perform transactions, including ATM pin, passwords, OTP, etc.

    FBR applies digital payment amid cyber security incident
  • SBP slaps Rs280 million penalty on National Bank

    SBP slaps Rs280 million penalty on National Bank

    KARACHI: The State Bank of Pakistan (SBP) has slapped a heavy monetary penalty of over Rs280 million on the National Bank of Pakistan (NBP) for violating instructions pertaining to Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT).

    The central bank imposed a monetary penalty on four banks during the quarter ended September 30, 2021. The SBP imposed Rs465 million as monetary penalties on the four banks for similar deviation.

    The SBP imposed a penalty of Rs132.44 million on Silk Bank Limited, Rs38.55 million on United Bank Limited and Rs13.54 million on Industrial and Commercial Bank of China-Pakistan Branches.

    In addition to penal action, the banks have been advised to strengthen its processes with respect to identified areas.

    The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of a regulatory regime which involves the 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.

    SBP imposes monetary penalty on eight banks
  • NBP announces Rs17.04 billion as half year profit

    NBP announces Rs17.04 billion as half year profit

    KARACHI:  National Bank of Pakistan (NBP) on Thursday announced Rs17.047 billion as net profit for half year ended June 30, 2021.

    The profit is 12.77 per cent higher when compared with Rs15.11 billion in the corresponding half of last year.

    However, there was no dividend announced.

    Net Interest Income (NII) of the bank settled at Rs 47.5 billion during 1HCY21, decreasing by 2 per cent YoY, and increasing by 19 per cent QoQ.

    NFI of the bank increased by a meagre 1 per cent YoY as the rise in dividend income (+44 per cent YoY) was offset by a decrease in other income (60 per cent). On a sequential basis NFI increased 13 per cent QoQ as the bank reported strong fee income (+32 per cent QoQ) and healthy surge in FX income (+91 per cent QoQ).

    Provisioning expenses for the bank came in at Rs 3.9 billion during 2QCY21 taking total provisioning expenses to Rs 6.9 billion during 1HCY21. Overall there has been a 55 per cent YoY reduction in provisioning, which could be due to improved outlook on the asset quality following the rebound in economic activity across the country leading to  reversal in general provisioning.

    Operating expenses clocked in 4 per cent higher YoY and 14 per cent higher QoQ. Cost/Income ratio settled at 47 per cent during 1HCY21 against 44 per cent same period last year.

    The bank booked an effective tax rate this quarter of 40 per cent and 39 per cent during  first half of current year.

  • SBP approves Rs82.6 million interest free student loan

    SBP approves Rs82.6 million interest free student loan

    KARACHI: The State Bank of Pakistan (SBP) has approved an amount of Rs82.6 million as interest free loan for deserving students.

    The apex committee for Student Loan Scheme having representation from State Bank of Pakistan, Finance Division (Government of Pakistan) and five major banks (NBP, HBL, UBL, ABL and MCB Bank) has approved Rs 82.6 million as interest-free loans to deserving students for their studies within Pakistan.

    The amount, approved by apex committee, will be disbursed to 518 deserving students of public sector universities across the country, studying in different disciplines of under-graduation, graduation and PhD studies for the Session 2017-18, 2018-19 & 2019-2020.

    The objective of the Student Loan Scheme is to provide financial assistance to the meritorious students having insufficient means. The loans are granted for a maximum tenor of 10 years from the date of the disbursement of first installment and repayable in monthly installments after six months from the date of first employment or one year from the date of completion of studies, whichever is earlier.

    National Bank of Pakistan, being the administrator of the Scheme, performs all the functions like receiving and scrutinizing the loan applications, disbursement of loans and their recovery.

  • Payment of benevolent grant to be made through valid bank account

    Payment of benevolent grant to be made through valid bank account

    ISLAMABAD: The payment of benevolent grant and group insurance fund would be made through only valid account opened at concerned branch of National Bank of Pakistan (NBP), a statement said on Monday.

    All those beneficiaries who are taking benevolent grant from the Federal Employees Benevolent and Group Insurance Fund (FEB & GIF) are hereby informed that in order to ease out the difficulties being faced by the beneficiaries, while drawing benevolent grant from National Bank of Pakistan, the BoT, FEB & GIF has decided that w.e.f. 1″ July, 2021 the amount of the monthly Benevolent Grant will be paid to the beneficiaries through valid account nos. to be opened with the concerned branches of the National Bank of Pakistan instead of cash payment.

    All the beneficiaries of monthly benevolent grant are hereby requested to open a Bank Account with the concerned Branch of the National Bank of Pakistan on or before 31.5.2021, if they have not opened yet.

    After opening the account the same may be communicated to FEB & GIF through bank as per following format: Benevolent GrantCase No. (copy of blue color payment order card including CNIC of the beneficiary may also be attached) CNIC of Employee Name of Beneficiary CNIC of Beneficiary Account No. of Beneficiary (10- digits Account No.) Name of Branch of NBP with Code (4- digits code) Amount of Monthly grant (Rs.) Date & amount of last payment made by NBP.

  • 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.