As Pakistan is already on grey list of FATF, SBP is more vigilant on compliance of Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) regulations and the statistics showed that most of banks were also penalized for violation in areas of AML and CFT.
Among 10 banks, Habib Bank Limited faced the highest penalty of Rs 320.08 million on August 2-3, in violations in areas of AML/CFT and Consumer protection. "Monetary penalty was imposed on HBL mainly on deficiencies in the areas of AML/CFT and erroneous deduction of service charges from customers. The bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such lapses/violations in future," SBP said.
MCB Bank faced a monetary penalty of Rs 159.152 million on August 3, mainly on deficiencies in the areas of AML/CFT. The bank has been advised timelines to improve the Know Your Customer (KYC) processes and integrate e-KYC system with core banking system.
A monetary fine of Rs 77.941 was imposed on Dubai Islamic Bank on deficiencies in the areas of AML/CFT and SBP has advised the bank for timelines to rectify the operational lapses and improve the control environment to avoid recurrence of such violations in future.
JS Bank was penalized with Rs 70.307 million in August on deficiencies in customer due-diligence process, mis-utilization and non classification of loans etc. The bank has been advised timelines to enhance its systems/process for customer risk profiling (CRP), transaction monitoring and identification of Politically Exposed Persons (PEPs).
Silkbank Limited faced Rs 53.879 million monetary penalty on violations in the areas of AML/KYC, Asset Quality, non-surrendering of unclaimed deposits, non-classification of loans and adjustment lending. Moreover, the bank has also been advised timelines to classify advances & create provision there against and conduct internal inquiry on some of high value cash transactions and take action accordingly.
Some Rs 52.795 million penalty was imposed on Bank Alfalah Limited on violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non-submission of documents against advance payments.
SBP imposed monetary penalty of Rs 32.755 million on Allied Bank Limited on breach of various limits of Equity Investment/related party and deficiencies in customer due diligence process. The bank has been advised timelines to bring equity Investment and exposure to related party group within the prescribed limit and revised KYC/CDD process.
Sindh Bank, too, found to have committed violations in the areas of AML/KYC, Asset Quality and FX Operations and accordingly Rs 15.088 million penalty was imposed on the bank. SBP said that monetary penalty on Sindh Bank was imposed mainly for deficiencies in customer due-diligence practices, imprudent lending practices, non-classification of loans. Moreover, in view of the strategic deficiencies in Transaction monitoring system & name screening process, the bank has been advised an action plan/timelines for replacement of their existing TMS and acquiring of name screening solution.
Summit Bank violated the AML/KYC and Asset Quality rules and a monetary penalty of Rs 13.072 million was imposed on it mainly on deficiencies in customer due-diligence process, mis-utilization of loans and non classification of loans. SBP has advised the bank for timely update customer profiles & properly document the reasons of large value transactions.
SBP imposed a fine of Rs 10 million on Habib Metropolitan Bank Limited mainly for violating foreign exchange regulations relating to splitting of the import advance payments into smaller transactions.