SBP Imposes Rs465.08m in Penalties on 10 Banks for Regulatory Breaches

The State Bank of Pakistan (SBP) has taken stringent action against ten banks, slapping fines totaling Rs465.081 million for various violations of its rules and regulations, as disclosed by the SBP's Banking Supervision Department.

The banks in question were found culpable of transgressing the standards set for Know Your Customer (KYC), Anti-Money Laundering (AML), asset quality, foreign exchange, and general banking operations.

According to the SBP, these penalties are a result of shortcomings in regulatory compliance and do not necessarily reflect the financial stability of the penalized entities.

United Bank Limited (PSX: UBL) faced a fine of Rs114.193 million for breaching regulatory instructions related to CDD/KYC, Asset Quality, FX, and General Banking Operations. The SBP has directed UBL to take corrective actions, including the implementation of necessary systems and controls to prevent the recurrence of such violations.

Habib Bank Limited (PSX: HBL) was fined Rs113.367 million for violations in AML/CFT, CDD/KYC, FX, and General Banking Operations. The SBP advised HBL to take preventive measures to avoid future violations.

Standard Chartered Bank Pakistan Limited (PSX: SCBPL) incurred a fine of Rs58.375 million for violations of regulatory instructions concerning CDD/KYC, FX, and General Banking Operations. SCBPL has been urged by the SBP to enhance its internal processes and controls to avert similar instances in the future.

Meezan Bank Limited (PSX: MEBL) faced a penalty of Rs44.705 million for non-compliance with regulatory instructions related to CDD/KYC, FX, and General Banking Operations. The SBP has advised Meezan Bank to ensure meticulous adherence to regulatory instructions to prevent future violations.

Askari Bank Limited (PSX: AKBL) was fined Rs36.4054 million for violating regulatory instructions related to CDD/KYC. The SBP has directed the bank to ensure strict compliance with regulatory instructions to prevent recurrence.

JS Bank Limited (PSX: JSBL) received a fine of Rs27.009 million for violating regulatory instructions related to CDD/KYC and General Banking Operations. The SBP has called upon JSBL to enhance its systems and controls to prevent future violations.

MCB Bank Limited (PSX: MCB) faced a fine of Rs23.554 million for non-compliance with regulatory instructions related to CDD/KYC, FX, and General Banking Operations. The SBP has advised MCB Bank to improve its processes to avoid future violations.

Dubai Islamic Bank Limited incurred a fine of Rs22.1 million for violating regulatory instructions related to CDD/KYC. Besides the penalty, the SBP has instructed the bank to ensure meticulous compliance with regulatory instructions to prevent future occurrences.

Mobilink Microfinance Bank Limited and Bank Alfalah Limited (PSX: BAFL) were the last two banks to be penalized with fines of Rs14.643 million and Rs10.73 million, respectively.

Both banks were held responsible for violating regulatory instructions related to CDD/KYC and General Banking Operations.

Furthermore, the SBP has directed both entities to conduct an internal inquiry into Branchless Banking regulatory violations and take appropriate actions.

It is essential to highlight that the central bank has instructed these individual banks to address these issues promptly.