HBL, MCB, UBL again penalized millions

Aftab Ahmed

Islamabad: The State Bank of Pakistan—the country’s banking regulator—has again penalized monetary cumulatively of Rs 97 million to the top three banks for violating the rules, said a circular of the SBP.

The regulator penalized the banks who include Habib Bank Limited, MCB Bank Limited, MCB Islamic Bank Limited, and United Bank Limited for violating regulatory instructions pertaining to Foreign Exchange and General Banking Operations, Anti-Money Laundering (AML), and Combating the Financing Terrorism (CFT) and also violating Customer Due Diligence (CDD) and Know Your Customer (KYC).

The State Bank of Pakistan issued these directives after Offsite Supervision & Enforcement Department observed these deficiencies in these local banks time and again. The SBP is regularly monitoring the local banks to comply with FATF’s strict action point to get out of the grey list.

Under SBP’s quarterly review for banks, it penalized monetarily Rs 39.77 million to Habib Bank Limited for violations of regulatory instructions pertaining to foreign exchange and general banking instructions.

In addition to penal action, the SBP has advised the bank to take action by strengthening its processes with respect to identified areas. The HBL management in order to comply with these deficiencies highlighted by SBP is not plugging the gaps rather making banking services for the visiting customers more complicated.

State Bank of Pakistan imposed a fine of Rs 10 million on MCB Bank Limited for violating regulatory instructions but MCB Islamic Bank—a subsidiary of MCB Bank and owned by business tycoon Mian Mansha faced heavy fine of Rs 37 million for violating regulatory instructions pertaining to AML/CFT especially.

UBL is also fined Rs 10.71 million by the SBP on violations of regulatory instruction pertaining to CDD/KYC and General Banking instructions.

SBP had also earlier fined the banks on the same charges .Despite clear directions of the regulator, banks had not taken measures to comply the orders. They continue floating rules which had upset the State bank of Pakistan (SBP) which stepped in penalizing the banks.