Five banks, including the Summit Bank, Habib Metropolitan Bank, MCB Bank, National Bank of Pakistan and Bank Alfalah have been penalized for breaching the regulatory environment by State Bank of Pakistan (SBP).
By imposing a monetary penalty on banks for violations of the laws, regulations and other regulations, on the central bank introduced major enforcement actions.
During the month of December 2019, the Customer Due Diligence (CDD) and Know Your Customer (KJC) SBP placed Rs219,138 million as penalties on five banks for violing primarily regulations relating to foreign trade operations.
The SBP from July 2019 started public disclosure of penal action against banks.
“Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions
With the latest penal action the total amount of penalty during first six months (July – December) 2019 increased to Rs1,569 million.
The central bank levied Rs219,138 million as monetary penalties, according to highlights of the SBP’s important implementation steps during December of 2019.
Summit Bank Limited was penalised for proceeding violations in foreign exchange transactions by the central bank on 11 December 2019 by an amount of Rs 17,422 million.
“For defects in the field of foreign trade operations, monetary penalty was imposed,” the SBP declared.
In breach of the CDD / KYC, the bank of Habib Metropolitan Bank Limited levied on December 11, 2019 Rs34,578 million.
The SBP on December 12, 2019 imposed penalty of Rs49.499 million on MCB Bank Limited for procedural violations in the area of foreign exchange operation.
“Monetary penalty was imposed on deficiencies in the area of foreign trade operations.”
The SBP on December 18, 2019 imposed monetary penalty of Rs21.544 million on National Bank of Pakistan for violating CDD/KYC.
“In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”