The State Bank of Pakistan (SBP) has implemented its strict regulatory measures against banks that failed to comply with rules and regulations of the banking sector, as eight banks came under its penal actions of over Rs. 500 million fine in the second quarter of 2021.
According to the SBP, the banks were slapped penalties of Rs. 525.244 million separately, from April to July 2021.
MCB Bank received the highest fine of Rs. 289 million on the account of violation of regulatory instructions pertaining to AML/CFT, including general banking operations.
In addition to penal action, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.
SBP also imposed a fine of over Rs. 75 million on Zarai Taraqiati Bank on the accounts of same violations as MCB. The bank was ordered to follow similar instructions of taking strict action against responsible officials.
Sindh Bank was penalized with a fine of Rs. 62 million for its violation to comply with foreign exchange operations, general banking, and regulatory instructions pertaining to AML/CFT.
Punjab Provincial Cooperative Bank was slapped with a penalty of Rs. 32 million by the SBP for its failure to enforce regulatory instructions pertaining to AML/CFT.
First Women Bank Limited was also fined to the tune of Rs. 31.5 million against the violation of regulatory instructions pertaining to Asset Quality, CDD/KYC, & General Banking Operations.
These two banks have been advised to strengthen their processes with respect to identified areas.
Soneri Bank and Bank Alfalah were also subjected to penalties of Rs. 12.5 million and Rs. 11.1 million, respectively, for the failure of following regulatory instructions pertaining to Asset Quality, FX, General Banking Operation.
Pak Brunai Investment Bank was slapped with a penalty of Rs. 10.4 million, on the account of violation of regulatory instructions pertaining to CDD/KYC, Asset Quality & General Banking Operations.
These banks were asked to strengthen their processes with respect to identified areas.
SBP should continue to penalize commercial banks against the violation of regulations. Banks who committed violations of rules repeatedly should be scrutinized strictly, including additional penalties. The banking regulator should also penalize banks for the failure of providing quality services to their customers through enforcement orders.