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.

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“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.

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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.

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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.

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