KARACHI: The State Bank of Pakistan (SBP) has imposed a cumulative fine worth Rs219.136 million on five commercial banks for violating its regulations in December.
These banks include Bank Alfalah, National Bank of Pakistan (NBP), MCB Bank, Habib Metropolitan Bank, and Summit Bank.
Bank Alfalah faced the highest fine, at Rs96.095 million for procedural violations in Know Your Customer (KYC) and Combating the Financing of Terrorism (CFT). According to the State Bank, the bank was advised to conduct an internal inquiry on the violation of regulatory requirements. The bank was also advised to strengthen its process related to KYC and customer due diligence (CDD).
MCB faced the second-highest fine, at Rs49.499 million for violations in foreign exchange (FX) operations.
Additionally, Habib Metropolitan Bank faced Rs34.578 million and NBP was fined Rs21.544 million; both for violations in CDD and KYC. Both banks were advised timelines to bring improvements in its systems.
Finally, Summit Bank was fined Rs17.422 million for violations in FX operations.
The SBP has recently started making public the fines it imposed on commercial banks. This most recent fine has come on the heels of increased regulation and fines imposed by the SBP in the last few months, through its offsite supervision and enforcement department.
The SBP has also become more vigilant about complying with international standards due to Pakistan being included on the Financial Action Task Force’s grey list. The country has until February 2020 to complete the FATF’s action plan.
Earlier in October 2019, SBP penalised HBL with Rs35.6 million fine “due to major flaws in the foreign trade operation services and customer due diligence (CDD)”.
In September 2019, the SBP fined three banks a total of Rs133.3 million; Meezan Bank Ltd, Askari Bank Ltd, and MCB Islamic Bank Ltd. The penalty was imposed over violations by all three banks in Know Your Customer (KYC) and CDD.
In August 2019, the SBP imposed a total penalty of Rs805 million on 10 banks, including HBL, mostly for violating AML and CFT regulations.
In July 2019, the SBP fined four banks a total of Rs184 million; the Bank of Punjab, JS Bank Ltd, Bank Al Habib Ltd, and Soneri Bank Ltd. The penalties were mostly for violating AML and KYC.