KARACHI: The State Bank of Pakistan (SBP) imposed monetary penalty of Rs.350.799 million on 6 banks for violation of regulatory instructions during.
The banking supervision department of the central bank taken the significant enforcement actions during the quarter ended June 30, 2023, against violation of regulatory instructions pertaining to customer identification, asset quality, foreign exchange, general banking operations, anti-money laundering and terrorism financing.
The contravening banks were also advised to strengthen their controls and processes in the identified areas and ensure meticulous compliance with the regulatory instructions.
The central bank imposed a penalty of Rs.144.207 million on National Bank of Pakistan (NBP) on charges of violation of regulatory instructions pertaining to customer due diligence (CDD), know your customer (KYC) and Asset Quality. In addition to penal action, the NBP has been advised to enhance the internal processes and controls.
The SBP imposed a penalty of Rs.125.253 on Bank Alfalah Limited for violation of regulatory instructions pertaining to anti-money laundering (AML) and counter financing for terrorism (CFT), CDD and KYC, foreign exchange (FX) and General Banking Operations while the bank has also been advised to ensure meticulous compliance with the regulatory instructions.
Meezan Bank Limited and Allied Bank Limited have been penalised Rs.38.03 million and 20.66 million respectively on charges of violating regulatory instructions pertaining to CDD, KYC, FX and general banking operations. In addition to penal action, the banks were advised to improve their internal processes as well.
Punjab Provincial Cooperative Bank Limited received a penalty of Rs.12.229 million for violation of regulatory instructions pertaining to CDD, KYC, asset quality and general banking operations while SBP advised the bank to improve its internal processes and controls.
The central bank has imposed penalty of Rs.10.42 million on Bank Al Habib Limited for violating regulatory instructions pertaining to CDD, KYC, FX and general banking operations and advised the bank to monitor the usage of card based transactions.
The SBP has also clarified that the actions were based on deficiencies in the compliance of regulatory instructions and did not constitute a comment on the financial soundness of the banking sector entities.
Customer due diligence (CDD) in broader terms includes identifying the customer and verifying the customer’s identity on the basis of documents, data or information obtained from customer or through reliable and independent source while know your customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering and terrorist financing.
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