The State Bank of Pakistan (SBP) imposed monetary penalty of Rs465 million on four banks during the first quarter (July-September) of 2021-22 for violating regulatory instructions, including anti-money laundering and countering financing terrorism.
According to details, the central bank imposed the penalty of Rs280.51 million on the National Bank of Pakistan (NBP) for violation of the regulatory instructions pertaining to AML/CFT, asset quality, forex and 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.
The central bank imposed Rs132.44 million penalty on Silk Bank Limited for violation of the regulatory instructions pertaining to AML/CFT, asset quality, forex and general banking operations.
A penalty of Rs38.55 million has been imposed on the United Bank Limited for violation of the regulatory instructions pertaining to the asset quality, CDD/KYC and general banking operations.
Similarly, the SBP imposed Rs13.54 million on Industrial and Commercial Bank of China (Pakistan) branches for violation of the regulatory instructions pertaining to CDD/KYC and general banking operations.
In addition to penal action, the banks have been advised to strengthen its processes with respect to identified areas. The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of a regulatory regime which involves the imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions.