KARACHI: The State Bank of Pakistan (SBP) has taken strict action against five commercial banks for violating regulatory provisions, including anti-money laundering (AML) laws.
The SBP, in its official data released on Wednesday, disclosed that monetary penalties totaling Rs224 million have been imposed on these banks for their non-compliance during the first quarter, which ended on March 31, 2023.
Askari Bank Limited has incurred the highest penalty of Rs83.415 million for violating regulatory instructions related to Customer Due Diligence (CDD)/Know Your Customer (KYC), Foreign Exchange, and General Banking Operations. In addition to the penalty, the central bank has instructed the bank to strengthen its controls and processes in the identified areas.
Sindh Bank Limited has been penalized with a sum of Rs55.4 million, the second-highest penalty imposed during the period. The bank was found to have violated regulatory instructions pertaining to CDD/KYC and General Banking Operations. Furthermore, the bank has been advised to enhance the oversight of the Board of Directors (BOD) and senior management regarding AML/CFT risk and strengthen control functions.
Zarai Taraqiati Bank Limited has been subjected to a monetary penalty of Rs37.26 million for violating regulatory instructions related to CDD/KYC, Asset Quality, and General Banking Operations. The bank has also been advised to reinforce its controls and processes in the identified areas.
Soneri Bank Limited faced a penalty of Rs27.45 million for breaching regulatory instructions pertaining to CDD/KYC and Asset Quality. Additionally, the SBP has directed the bank to strengthen its controls and processes in the identified areas.
Lastly, Mobilink Microfinance Bank Limited has incurred a monetary penalty of Rs20.47 million for violating regulatory instructions related to AML/CFT, Asset Quality, and General Banking Operations. The central bank has instructed the Microfinance Bank to conduct an internal inquiry into the breaches of regulatory instructions and take disciplinary action against the responsible officials.
The SBP’s stringent action against these banks emphasizes the importance of adherence to regulatory provisions, particularly in areas such as AML/CFT, KYC, and General Banking Operations. The penalties imposed aim to ensure that banks strengthen their controls, processes, and oversight to mitigate financial risks and maintain compliance with regulatory requirements.
The SBP will continue to closely monitor the activities of financial institutions to safeguard the integrity of the banking system and promote transparency in the country’s financial sector.
