The State Bank of Pakistan (SBP) sent a strong message to financial institutions with hefty fines totaling Rs. 747.57 million levied on eight banks and one exchange company for regulatory breaches during the first quarter of 2024 (ending March 31st).
These fines highlight the importance of strict adherence to regulations in the financial sector. The violations identified by SBP ranged from Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) and Know Your Customer (KYC) lapses to Foreign Exchange (FX) and general banking operation breaches.
Bank Alfalah Limited received the highest penalty of Rs. 187.65 million for non-compliance with FX and general banking regulations. Habib Bank Limited followed closely with a Rs. 143.37 million fine for violations across AML/CFT, CDD/KYC, FX, and general banking operations.
Other institutions facing SBP’s wrath include Bank Al Habib Limited, Meezan Bank Limited, Habib Metropolitan Bank Limited, MCB Bank Limited, MCB Islamic Bank Limited, and Bank of Khyber. Their fines ranged from Rs. 30.74 million to Rs. 117.23 million for various regulatory breaches.
Royal Exchange Company wasn’t spared either, receiving a Rs. 27.97 million penalty for CDD/KYC and general banking operation violations.
The SBP’s actions emphasize the importance of robust internal controls and meticulous compliance within the financial sector. All the institutions have been advised to strengthen their systems to prevent similar transgressions in the future.
These enforcements underscore the SBP’s unwavering commitment to maintaining a strong regulatory framework and ensuring the integrity and stability of Pakistan’s financial system.