Bankers Media

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:

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.

If a individual, association of persons,
partnership and company have PKR/ Foreign Currency bank account and which is not operated from last year.

All Savings and Current Account opened in any currency including Foreign Currency Account that remain inoperative for a period of one year will be marked as Dormant Account.

Dormant Account will remain remain debit block for customer transaction however such account can be debited for recovery of charges and government tax or levies.

Prior dormancy letter shall be dispached one month advance of account being classified as dormant as per State Bank of Pakistan (SBP) instructions.

Guidelines:

• Credit entries may be allowed without changing the status of account.
• Debit Transactions or Withdrawals are not allowed until account holder submits written requests for activation of account.
• Produce original Computerized National Identity Card (CNIC).
• For activation of individual account a written request from customer is required.
• If account of entites other than individual Sole proprietorship , Partnership, Private and Public Limited Companies and Trust Societies dormant actovation request will be obtained on their letter head duly signed by authorized signatories.
• If account is operated Jointly signatures of all account holders will be obtained on account activation request.
• However Joint Account where operation of account is "Either or Survivor" signature of any one of the account holder is sufficient.
• After completion of documents asked the customer to conduct a transaction on the same day for reactivation of account.
• As per instructions of State Bank of Pakistan (SBP) statement of such account handed over to customer from the date of dormancy.

State Bank of Pakistan (SBP) has directed all commercial banks and money transfer agencies to monitor remittances and authenticate the source of funds/modes of transactions of the customers and companies with a business of software exports.

In its recent circular issued, it said banks and foreign exchange dealers and money transfer agencies (authorized dealers) should conduct customer due diligence, maintain a profile of the company and customers of IT industry in pursuance of regulations under Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT).

State Bank of Pakistan issued a circular in accordance ,

PRIORITY TO SENIOR CITIZENS, PENSIONERS AND SPECIAL PERSONS IN AVAILING BANKING FACILITIES.

In terms of BC & CPD Circular Letter No. 02 dated 1st June 2016, BC & CPD Circular Letter No. 02 dated 4th December 2015 and BC & CPD Circular Letter No. 02 dated 13th February 2014, banks/MFBs were advised to extend priority services to senior citizens/ pensioners and special persons in availing banking facilities along with proper seating arrangements, drinking water, special assistance and due care.

However, concerns have been raised by various quarters that some banks are not taking requisite care of senior citizens/pensioners/special persons especially regarding arrangement of separate counters for pensioners. This matter has been viewed seriously.

2- Accordingly, all banks/MFBs are again advised to follow the instructions issued on the subject matter from time to time in true letter and spirit. Any violation of above instructions would be dealt under relevant provisions of the Banking Companies Ordinance, 1962