During the quarter ending September 30, 2021, the State Bank of Pakistan (SBP) issued fines on four banks totaling Rs465 million for non-compliance with legal and regulatory obligations.
The SBP conducts supervisory enforcement steps against institutions that do not comply with legal or regulatory standards, which can include imposing fines, administrative and financial punishments, and referring the matter to the appropriate law enforcement/prosecution agency.
National Bank of Pakistan received the largest penalty of Rs280.509 million in breach of regulatory directives related to AML/CFT, asset quality, FX, and general banking operations, according to information of key enforcement actions by SBP during the quarter ending Sep 30, 2021.
In addition to monetary penalties, the SBP has directed the bank to undertake an internal investigation into regulatory violations and take disciplinary action against the violators.
Silk Bank Limited was second on the list with a penalty of Rs132.437 million for violation of regulatory instructions pertaining to AML/CFT, asset quality, FX & 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.
United Bank Limited was third on the list with the penalty of Rs38.554 million for violation of regulatory instructions pertaining to asset quality, CDD/KYC & general banking operation. In addition to penal action, the bank has been advised to strengthen its processes with respect to identified areas.
Lastly, Industrial and Commercial Bank of China-Pakistan faced a monetary penalty of Rs13.542 million for violation of regulatory instructions pertaining to CDD/KYC & general banking operations.