SBP imposes penalities 10 Commercial Banks for violating regulatory laws

State Bank of Pakistan (SBP) has taking strict actions in the financial sector by slamming penalities of over Rs. 800 million on 10 commercial banks for violating regulatory laws and loophols in the operations.

Central bank carried out extensive audits of banks operations amd regulatory implementation and penalized banking companies without issuing a warning or show cause notices.

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Most of banks violated regulations in areas to AML/CFT, Consumer Protection, Consumer Protection and Asset Quality.
The action is part of the steps needed to get off the Financial Action Task Force (FATF) greylist.

Below are the details of penalities slapped on banks by the State Bank of Pakistan (SBP).

Habib Bank Limited

Habib Bank Limited (HBL) faced a fine of Rs. 320 million due to deficiencies in the areas of AML/CFT) erroneous deduction of service charges from customers. The HBL management has beed advised timelines to bring inprovements in its system.
Muslim Commercial Bank (MCB):
MCB was imposed a penality of Rs. 159.152 million for violating AML/CFT. The bank management has been advised timelines to improve KYC/CDD processes and integrate eKYC system.

Dubai Islamic Bank:

State Bank of Pakistan imposed a penality of Rs. 77.9 million on Dubai Islamic Bank for violating in the areas of AML/CFT and Asset Quality.

JS Bank:

SBP imposed a penality of Rs. 70.37 million for deficiencies in customer due diligence process, misusing and non classification of loans. Bank has been advised to enhance its system for cuatomer risk profiling (CRP), transaction monitoring and identification of politically Exposed Persons (PEP).

Silk Bank:

SBP imposed a penality of Rs. 53 million on the deficiencies in customer due diligence practices, imprudent lending practice, non classification of loans.

Bank Alfalah:

The bank was fined with penality of Rs. 52.7 million in August due to violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non submission of documemts against advance payment.

Allied Bank Limited:

SBP imposed penality of Rs. 32.75 million for violating various limits of Equity Investment / related defeciencies in the cuatomer due diligence process.

Sindh Bank:

Bank was imposed a penality of Rs. 15 million for poor control in customer due diligence practices, imprudent lending practice, non classification of loans.

Summit Bank:

SBP has imposed a penality of Rs. 13.07 million for poor controls in customer due diligence process, misusinh of loans and non classification of loans.

Habib Metropolitan Bank (HMB):

Bank was imposed a penality of Rs. 10 million bt SBP on violation of foreign exchange regulations relating to splitting the import advamce payments into smaller transactions.

The management of all these commercial banks are dejected but the have to pay heavy price of penality that will eat up their revenues. Banks should focus on theis business and operations to avoid penalities next time.