State Bank imposes penalties on four banks

KARACHI: The State Bank of Pakistan (SBP) has imposed monetary penalties worth Rs192.97 million on four banks in November for the violations of Customer Due Diligence (CDD) and Know Your Customer (KYC) requirements, a report said on Wednesday.

The SBP, in a notification published on its website, said it fined Allied Bank Limited Rs60.795 million, MCB Bank Limited Rs91.851 million, Bank of Punjab Rs14.040 million, and Habib Bank Limited Rs25.984 million.

Inadequate checking of the customers’ identities and failure to comply with the regulatory requirements by these banks led to this action, the central bank said.

It added that these banks had been advised to conduct an internal inquiry on breaches of regulatory requirements and take a disciplinary action against the delinquent officials.

Further, the SBP advised banks to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.

In November, the central bank penalised various banks to pay Rs133.3 million for the violating the customer due diligence and know your customers regime.

The central bank’s penalties aim to clamp down terror financing and money laundering. The country’s banks are also under pressure to follow the customer due diligence and know your customers protocols since the penalties are significantly high indicating central bank’s seriousness over the issue.

The central bank’s penalties come at a time when the government is struggling to avoid the international Financial Action Task Force’s black list.

Pakistan will remain on its grey list till next February. The international watchdog’s scheduled meeting, due in February, would review Pakistan’s compliance with the anti-money laundering and counter terror-financing laws.