Karachi, November 7, 2023 – United Bank Limited (UBL) has been embroiled in a legal dispute with the State Bank of Pakistan (SBP) since 2016 over a penalty totaling Rs 4.09 billion.
The dispute centers around alleged contraventions of foreign exchange regulations related to the issuance and certification of E-Forms by the bank to certain customers, specifically exporters, who failed to submit the necessary export documents.
UBL made this disclosure in its quarterly report issued on October 30, 2023.
The penalties, amounting to Rs. 4.09 billion, were imposed by the FE Adjudication Court of the State Bank of Pakistan in 2016. The basis of these penalties was that the exporters had not repatriated foreign exchange in compliance with the requirements of foreign exchange regulations.
UBL, in response, contends that it fully complied with the law and diligently discharged its liability in the matter. The bank has taken legal action by filing a civil suit in the High Court of Sindh to challenge the imposition of the penalty. As a result of this legal action, the High Court has issued a stay on any further actions being taken against the bank with regard to the penalty.
The management of UBL, guided by advice from legal counsel, remains confident that the bank’s perspective will ultimately prevail in the ongoing legal battle. They believe that UBL will not be subject to any financial losses stemming from this issue.
The long-standing dispute between UBL and SBP underscores the complexities and nuances associated with compliance in the financial and banking sector. As the legal battle continues, stakeholders are keenly observing the proceedings to understand the final resolution and its implications for the banking industry.
The outcome of this case will undoubtedly have broader ramifications for how banks interact with regulatory bodies, emphasizing the importance of strict adherence to foreign exchange regulations and the consequences for non-compliance. The banking community will be closely monitoring the developments in this case as it reaches its conclusion.
