SBP imposes over Rs219mn fines on five banks

• Bank Alfalah Limited faced the highest penalty of Rs96.095mn for Procedural Violations in the area of KYC/CFT.
• SBP takes supervisory enforcement actions against those financial institutions that fail to comply with legal or regulatory requirements.

The State Bank of Pakistan (SBP) has imposed monetary fines amounting to Rs219.058 million on five banks in December for violation in the area of Customer Due Diligence (CDD) and Know Your Customer (KYC) and Foreign Exchange (FX) operations.

As per the central bank, Bank Alfalah Limited faced the highest penalty of Rs96.095mn for Procedural Violations in the area of KYC/CFT. In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violation of regulatory requirements. Further, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.

Meanwhile, MCB Bank Ltd faced the monetary penalty of Rs49.499mn for Procedural Violations in the area of FX operations. The monetary penalty was imposed on deficiencies in the area of foreign trade operations.

Habib Metropolitan Bank Ltd faced Rs34.578mn in penalty for Procedural Violations in the area of CDD/KYC. In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future, said SBP.

It may be mentioned that SBP takes supervisory enforcement actions against those financial institutions that fail 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.