State Bank Issues Penalties Worth Rs. 1.68 Billion On 15 Commercial Banks

State Bank of Pakistan (SBP) continues to take stringent measures to improve the performance of the banking sector including monetary penalties to banks failing to meet regulatory compliance. Recently, 15 banks were hammered with heavy penalties of Rs. 1.68 billion during the period of March to June 2020.

The central bank usually updates the enforcement action at the end of every month however due to the COVID-19 pandemic, the inspections of the audit teams were restricted in the banking industry which caused delays.

Among the 15 banks, public sector banks were imposed heavier penalties than others.

1. Bank of Punjab

Bank of Punjab was slapped with the heaviest penalty of Rs. 286 million for its violation in the areas of CDD/KYC, Asset Quality, FX Operations, Corporate Governance.

The bank has been advised to strengthen its processes to avoid the recurrence of such violations.

2. National Bank of Pakistan

The SBP team found procedural violations in the areas of CDD/KYC, Asset Quality, FX Operations of National Bank of Pakistan which cost the bank a penalty of Rs. 269.810 million.

3. Habib Bank Limited

Habib Bank Limited has been penalized with Rs. 204.217 million for the procedural violations in the area of CDD/KYC. The bank has been advised to strengthen its processes related to CDD/KYC, to avoid the recurrence of such violations in the future.


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4. MCB Bank

SBP slammed a penalty of Rs. 158.474 million for procedural violations of CDD/KYC. The bank has been told to strengthen its processes related to CDD/KYC, and avoid these problems in the future.

5. Zarai Taraqiati Bank

Zarai Taraqiati Bank faced the penalty of Rs. 147.250 million for violations in AML/CFT. This is a serious violation in the current situation. Hence, penal and administrative action has been taken against the bank beside the monetary penalty. Moreover, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials

6. United Bank Limited

United Bank Limited has been slammed with a penalty of Rs. 137.001 million against procedural violations in the areas of CDD/KYC, Asset Quality, FX Operations, Corporate Governance.

In addition to penal action, the bank has been advised to strengthen its processes to avoid the recurrence of such violations.

7. Faysal Bank Limited

Faysal Bank Limited was fined Rs. 96.128 million for procedural violations in the areas of CDD/KYC, Asset Quality, FX Operations. The bank has been advised to strengthen its processes to avoid the recurrence of such violations.


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8. Punjab Provincial Cooperative Bank

The bank has been imposed a penalty of Rs. 81.5 million for violations in AML/CFT

SBP took penal and administrative action taken against the bank. Moreover, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.

9. Meezan Bank

Meezan Bank has been slammed with a penalty of Rs. 81.06 million for procedural violations in the area of CDD/KYC. The bank has been advised to strengthen its processes to avoid recurrence.

10. JS Bank

JS Bank faced a penalty of Rs.71.47 million for procedural violations in the areas of CDD/KYC, FX Operations.

The bank has been advised to strengthen its processes related to CDD/KYC.

Other Banks

Other banks were also charged with procedural violations in the area of CDD/KYC. Among them, Bank Al Habib was imposed a penalty of Rs. 46.8 million, Bank Alfalah Rs. 40.3 million, Askari Bank with Rs. 29.8 million and Rs. 22.8 million. Bank Islami was also imposed a penalty of Rs. 11.51 million for procedural violations in the area of FX Operations.

According to SBP, these enforcement actions are based on deficiencies in regulatory compliance and do not constitute a comment on the financial soundness of the entity.



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