The $55 million fines imposed by US regulators on the National Bank of Pakistan were for “historical compliance program weaknesses and delays in making compliance-related enhancements”, according to the bank’s President Arif Usmani.
In a letter issued to the Pakistan Stock Exchange (PSX), the NBP President outlined that “there were no findings of improper transactions or willful misconduct. “US regulators have recognized the many positive changes resulting from new management. The National Bank of Pakistan and the New York branch are fully committed to satisfying the regulators’ expectations,” he added.
Usmani mentioned that since May 2020, “the New York branch has been under new management and has substantially enhanced its compliance program. US regulators have recognized the many positive changes resulting from [the] new management. The National Bank of Pakistan and the New York branch are fully committed to satisfying the regulators’ expectations”.
The United States Federal Reserve announced in a statement on Thursday a $20.4 million (Rs. 3.6 billion) penalty against NBP. The board’s action was in conjunction with an action by the New York State Department of Financial Services (NYDFS). The NYDFS also fined NBP $35 million (Rs. 6.1 billion) for repeated compliance failures (now clarified as historical failures), taking the combined penalties to $55 million (Rs. 9.7 billion).
Last year, the State Bank of Pakistan (SBP) fined the NBP Rs. 280.5 million for violating regulatory guidelines on anti-money laundering, asset quality, foreign exchange, and general banking operations (GBO).
Rewinding back a few more years, NBP’s New York office was ordered to pay a $28,800 penalty to the US Treasury in 2015 for alleged violations of US sanctions, which were later cleared.
