Five Pakistani Banks face huge penalties over terror financing

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Five Pakistani Banks face huge penalties over terror financing

ISLAMABAD - State Bank of Pakistan (SBP) has slapped heavy penalties of over Rs. 219 million on five major banks failing in compliance with various rules and regulations in December 2019.

According to the enforcement orders, these banks are Bank Alfalah, National Bank of Pakistan, MCB Bank, Habib Metropolitan Bank and Summit Bank. ------------------------------ Bank Alfalah Limited

Bank Alfalah Limited has been on the radar of the central bank, which found gross procedural violations on the account of Know Your Customer/Combating the Financing of Terrorism. Hence, the bank has faced a huge penalty of Rs. 96.095 million.

In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violations of regulatory requirements. The bank has also been advised to strengthen its process related to KYC/CDD in order to avoid the recurrence of such violations in the future. MCB Bank

MCB Bank Limited was once again found in procedural violations in areas of foreign exchange operations. The regulator has imposed a penalty of Rs. 49.499 million. The bank was examined and found with deficiencies in the area of foreign trade operations. National Bank of Pakistan

National Bank of Pakistan was penalized to the tune of Rs. 21.544 million against procedural violations in the area of customer due diligence and Know Your Customer requirement, which means that the bank failed to maintain a proper record of the customers while providing them banking services.

In addition to the penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid the same in the future. Habib Metropolitan Bank

Habib Metropolitan Bank was also slapped with a penalty of Rs. 34.578 million due to procedural violations found in the areas of customer due diligence and Know Your Customer by the banking regulator. Summit Bank

Summit Bank reportedly had procedural violations in foreign exchange operations. It was imposed a penalty of Rs. 17.422 million. The bank was examined and found with deficiencies in foreign trade operations.

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