SBP penalises four banks Rs 83 million for regulatory violations

KARACHI: The State Bank of Pakistan (SBP) has imposed penalties totalling more than Rs 83.157 million on four prominent commercial banks for their alleged violation of regulatory instructions. These sanctions, which took place during the July-September 2023 period, encompassed a range of infractions relating to foreign exchange, general banking operations, and customer due diligence.

United Bank Limited, one of the banks in question, found itself subject to a penalty of Rs 26.5 million for its failure to adhere to regulatory instructions concerning foreign exchange and general banking operations. In addition to the financial penalty, the bank has been strongly advised to enhance its internal controls and ensure rigorous compliance with regulatory directives.

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The Bank of Punjab, another of the penalised institutions, was slapped with a fine of Rs 21.569 million. This penalty was attributed to the bank’s breach of regulatory guidelines pertaining to general banking operations. To avert the repetition of such regulatory violations, the SBP has recommended that the bank reinforce its systems and controls.

JS Bank Limited incurred a penalty of Rs 18.51 million for transgressions related to customers’ due diligence (CDD/KYC), foreign exchange, and general banking operations. The bank, like its counterparts, has received directives to fortify its internal mechanisms and ensure conformity with regulatory requirements to prevent any future lapses.

Allied Bank Limited, the fourth institution facing sanctions, was fined Rs 16.578 million for its non-compliance with regulatory instructions regarding general banking operations. To rectify these regulatory infringements, the SBP has advised the bank to enhance its internal processes.

The SBP, in clarifying its actions, emphasised that these penalties were levied due to shortcomings in complying with regulatory instructions and should not be construed as a reflection on the financial stability of the penalised banks. The central bank’s objective remains to uphold the integrity of the banking sector and ensure adherence to regulatory directives.