NY regulator reduces fine on Habib Bank to $225m

WASHINGTON: The New York Department of Financial Services (DFS) on has reduced fine on Habib Bank and its New York branch and ask it to pay $225 million within 14 days for failures to comply with laws and regulations designed to combat illicit money transactions.

According to Geo News, the regulator said it had also imposed a surrender order imposing conditions for the orderly wind down of Habib Bank’s New York branch. The country's largest bank has agreed to an investigation of historical transactions processed by the New York branch as a condition of the order, the DFS added. The enforcement action was brought
following a 2016 review during which the DFS said it found “weaknesses in the bank’s risk management and compliance”.

Earlier, Habib Bank Ltd, facing a possible $630 million fine over compliance failures by its New York branch, admitted mistakes but denied any wrongdoing and said the penalty sought by US regulators was disproportionate.

“There is no specific wrongdoing,” HBL Chief Executive Noman Karamat Dar had told a press briefing in Islamabad. “Yes there are mistakes, but we are saying that the fine for these mistakes is disproportionate.”

HBL, which has announced it plans to surrender its US banking licence, has been embroiled in accusations over money-laundering compliance failures by its New York operation for more than a decade.

The DFS, which has pursued several aggressive enforcement actions against foreign banks, had said HBL’s compliance systems were “dangerously weak” and “serious and persistent failings” at its New York unit appeared to affect the entire enterprise. It singled out HBL’s connections with Saudi Arabia’s largest private bank Al Rahji, which has been linked by the US Senate and in the media to al-Qaeda and the financing of extremism.