KARACHI: After recent orders from the American authorities to limit its dollar clearing business, the Habib Bank Limited’s (HBL) New York branch has announced to continue its US license, and continue to provide its services as usual as the branch is now allowed to continue to conduct its current business.
It cannot accept new foreign correspondent accounts or new customer accounts in New York for US dollar clearing without prior approval of the regulator. It cannot increase its US dollar clearing business both in terms of number of transactions or the aggregate amount without prior permission of the US regulators.
“HBL takes its regulatory responsibilities very seriously and has been taking actions in advance of even entering these orders to enhance its compliance program, including engaging outside compliance consultants to review its current programme. We believe that these measures will put us in a position to move quickly on the requirements in the orders,” the statement added.
HBL operates a branch in New York, which is licensed by the New York State Department of Financial Services (NYSDFS) and which is subjected to supervision by the Federal Reserve Bank of New York (FR BILLIONY).
The NY Branch of HBL had been operating under a “Written Agreement” with the NYSDFS and the FR BILLIONY since 2006. During a recent examination, the US regulators found deficiencies in the risk management and BSA/AML compliance programme at HBL New York branch and, subsequently, escalated the enforcement actions from the “Written Agreement” to a “Consent Order” in the case of NYSDFS and a “Cease and Desist Order” in the case of FR BILLIONY. These orders impose certain additional requirements to remediate on the branch and provide mechanisms for enforcement if the remediation is not met.
HBL is the largest bank in Pakistan with a history spanning 75 years. It has presence in 28 countries worldwide through branches, subsidiaries and affiliates, including in all major financial centres.
