Non-compliance of regulatory requirements: SBP imposes Rs133m monetary penalties on 3 banks

The State Bank of Pakistan (SBP) has imposed a cumulative monetary fine of amounted to Rs 133 million on three banks in September 2019 for non-compliance of regulatory requirements. The SBP takes supervisory enforcement actions against those institutions that failed to comply with legal or regulatory requirements and these actions may range from imposition of penalties, administrative & financial sanctions and reference to concerned law enforcement/ prosecution agencies.

The SBP on Friday disclosed significant enforcement actions taken against the banks during the last month to avoid the same violation in future. According to details issued by State Bank, cumulatively Rs 133.321 million monetary penalties were imposed on three domestic banks in September 2019 for procedural violations in areas of Know Your Customers (KYC) and Customer Due Diligence (CDD).

Among three banks, Meezan Bank Limited faced the highest penalty of Rs 63.805 million on September 20, 2019 and the bank has been advised to strengthen its process related to KYC and CDD, in order to avoid occurrence of similar violation in future.

On September 13, 2019, Askari Bank Limited faced a monetary penalty of Rs 56.610 million for same violation and it was also advised to strengthen the process related to KYC and CDD. In addition, a monetary fine of Rs 12.906 million was imposed on MCB Islamic Bank Limited on September 20, 2019 on deficiencies in the areas of KYC and CDD.

It may be mentioned here that SBP, in August this year, announced to disclose significant enforcement actions against all banks, DFIs, Micro Finance Banks (MFBs) and Exchange Companies (ECs) through SBP Website aimed to bring more transparency and strengthen the market discipline.

Copyright Business Recorder, 2019