‘HBL New York branch not fined over money laundering’

ISLAMABAD: Parliamentary Secretary for Finance Rana Muhammad Afzal Tuesday said the Habib Bank Limited (HBL) New York branch was not fined over any money laundering issue, but for not following the reporting and compliance regulations.

He said the State Bank of Pakistan (SBP) was holding an inquiry into the closure of HBL branch in New York and will submit a report within two to three weeks. "A committee headed by deputy governor of SBP has been constituted which will examine all aspects of the issue and submit its report within a period of two to three weeks, fixing responsibility," he said while speaking on a call attention notice. The call attention notice was moved by Sheikh Salahuddin, Dr Fouzia Hameed, Kishwer Zehra, Syed Waseem Hussain and Abdul Waseem, drawing attention of the minister for finance towards closure of foreign branches of United Bank Limited/Habib Bank Limited.

Rana Afzal said the New York authorities had imposed a fine on the HBL branch for not complying with its rules regarding reporting of transactions, adding that the HBL had settled the penalty by agreeing to pay $225 million fine, otherwise it was around $600 million. 

"There will be no negative impact on Pakistan's deposits with closure of the bank branch," he said.  "In dollar transactions, three regulators are involved i.e. the country of sender, United States of America and the country where the amount lands," he said, adding that transactions of around 70 to 80 percent world trade were made in dollar and all these routed through New York. He said around 142 Pakistani bank branches were operating in different countries and complying with rules and regulations of the countries, where they were doing business.  Commenting on a query, the parliamentary secretary said the UBL branch had not been shut down and it had no such an issue.