The State Bank Of Pakistan (SBP) Imposes Monetary Penalty On 5 Banks For Violating Regulatory Instructions

The State Bank of Pakistan (SBP) imposed a monetary penalty of Rs223.987 million on different banks for violation of regulatory instructions pertaining to customer identification, anti-money laundering, and terrorism financing

KARACHI, (UrduPoint / Pakistan Point News - 24th May, 2023 ):The State Bank of Pakistan (SBP) imposed a monetary penalty of Rs223.987 million on different banks for violation of regulatory instructions pertaining to customer identification, anti-money laundering, and terrorism financing.

According to details of significant enforcement actions taken by the banking supervision department of the central bank during the quarter ended March 31, 2023, the contravening banks were also advised to strengthen their controls and processes in the identified areas.

The central bank imposed a penalty of Rs83.415 million on Askari Bank Limited for violation of regulatory instructions pertaining to customer due diligence (CDD), know your customer (KYC), and foreign exchange and general banking operations.

Sindh Bank Limited received a monetary penalty of Rs.55.393 million for violation of regulatory instructions pertaining to CDD/KYC and General Banking Operations. In addition to penal action, the bank has been advised to enhance the oversight of the board of directors (BOD) and senior management in matters pertaining to anti-money laundering (AML) and countering the financing of terrorism (CFT) risk, and strengthen the control functions.

The SBP imposed a monetary penalty of Rs37.263 million on Zarai Taraqiati Bank Limited for violation of regulatory instructions pertaining to CDD/KYC, Asset Quality, and General Banking Operations.

Soneri Bank Limited on charges of violation of regulatory instructions pertaining to CDD/KYC and Asset Quality received a monetary penalty of Rs.27.449 million.

The central bank imposed a monetary penalty of Rs.20.467 million on Mobilink Microfinance Bank Limited for violation of regulatory instructions pertaining to AML/CFT, Asset Quality, and General Banking Operations.

The MFB has further been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.

The SBP has also clarified that the actions were based on deficiencies in compliance of regulatory instructions and did not constitute a comment on the financial Soundness of the entities.

Customer due diligence (CDD) in broader terms includes identifying the customer and verifying the customer's identity on the basis of documents, data, or information obtained from the customer or through reliable and independent sources while knowing your customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering, and terrorist financing.