SBP penalises five banks

KARACHI: State Bank of Pakistan (SBP) imposed Rs57.834 million penalties on five banks in the last quarter of 2021 (Oct-Dec) for not complying with its instructions on general banking operations, the SBP said on Tuesday.

The banks include Bank Al Habib Limited, the Bank of Punjab, Standard Chartered Bank Pakistan Limited, Askari Bank Limited, and National Bank of Pakistan.

The penalty of Rs13.684 million was imposed on Bank Al Habib, followed by the Bank of Punjab (Rs12.545 million), Standard Chartered Bank Pakistan (Rs11.045 million), Askari Bank (Rs10.300 million), and the NBP (Rs10.260 million). The banks were fined for violating regulations related to general banking operations. The SBP asked the banks to strengthen their processes with respect to identified areas.

Pakistan’ banking sector’s total assets were Rs28.790 trillion at the end of September, up 2.17 percent from the quarter before, according to SBP’s Quarterly Compendium. Banks’ deposits increased 0.36 percent to Rs20.516 trillion during the quarter, compared with 0.80 percent growth in the same period of previous year.

Banking sector’s credit risk indicators improved further as the gross non-performing loans to total loans ratio decreased to 8.8 percent at end September, 2021 from 9.9 percent a year ago, SBP said.

The earning indicators of the banking sector witnessed some moderation as the return on assets stood at 0.95 percent in the third quarter of 2021, compared with 1.13 percent in the same period of 2020. The solvency of the sector remained strong as the capital adequacy ratio at 17.9 percent stayed well above the minimum domestic regulatory benchmark of 11.5 percent and the global standard of 10.5 percent.