KARACHI: Habib Bank Limited on Monday said it will complete the voluntary closure of its New York branch in March this year in compliance with the US banking regulations, but continue to use...
KARACHI: Habib Bank Limited (HBL) on Monday said it will complete the voluntary closure of its New York branch in March this year in compliance with the US banking regulations, but continue to use correspondent banking network for foreign transactions.
“On March 31, 2020, Habib Bank Limited (HBL) will complete the orderly wind-down and voluntary closure of its New York branch,” the bank said in a statement. “The wind-down has been undertaken in coordination with the New York state banking regulators, subject to the New York banking laws and regulations.”
HBL said the bank agreed to regulators in the US to conduct a systematic wind-down of the bank’s affairs in New York. “Following the voluntary closure of its New York Branch, HBL will no longer operate any bank branch in the United States,” it added. “However, the bank will continue to service its clients’ US dollar banking requirements, in Pakistan and other countries where it operates, through its network of correspondent banks.”
HBL, the country’s biggest bank in terms of assets, agreed to pay $225 million fine to a US authority in 2017 for not complying with the rules related to reporting of transactions.
The bank said the State Bank of Pakistan, the New York State Department of Financial Services, and the Federal Reserve Bank of New York consistently supports and provides cooperation throughout the process of winding down and closing of the branch.
Analyst Mustafa Mustansir at Taurus Securities said the branch closure could lead to significant cost savings for the HBL.
“For CY18, impact of ongoing remediation services in New York (for HBL) stood at Rs6.4 billion,” Mustansir said. HBL said it initiated a business transformation program in early 2018, focused on its control and compliance processes and systems to further strengthen its adherence to international standards.
“As part of the program, HBL made substantial and effective investments in management time and resources to further strengthen its AML (anti-money laundering) and CFT (combating the financing of terrorism) protocols and functions and also engaged the services of international experts to ensure that such functions were brought in line with international standards.”
HBL further said it made ‘significant’ progress in terms of the strengthening of its compliance and control functions, processes and culture. “For HBL, adhering to the international compliance standards and protocols is not just a one-off project but a sustained effort that governs the way we do business,” it added. “HBL remains committed to engaging in progressive banking practices while ensuring compliance with international and local laws and regulations across its network.”