Eight banks receive Rs. 500 million penalties from SBP

Reports state that these banks have been slapped penalties of Rs. 525.244 million (separately) by the SBP from April to July 2021.

State Bank of Pakistan (SBP) has strict regulatory measures against banks that fail to comply with rules and regulations of the banking sector. In the second quarter of 2021, eight banks have come under its penal actions of over Rs. 500 fine.

Reports state that these banks have been slapped penalties of Rs. 525.244 million (separately) by the SBP from April to July 2021.

Details of the Penalized Banks

MCB Bank

Fine Received: Rs. 289 million

On account of: Violation of regulatory instructions pertaining to AML/CFT, including general banking operations.

SBP Advice: In addition to penal action, the bank has been advised by SBP to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.

Zarai Taraqiati Bank

Fine Received: Rs. 75 million

On account of: Violation of regulatory instructions pertaining to AML/CFT, including general banking operations.

SBP Advice: The bank has been ordered to follow similar instructions of taking strict action against responsible officials.

Sindh Bank

Fine Received: Rs. 62 million

On account of: Violation to comply with foreign exchange operations, general banking, and regulatory instructions pertaining to AML/CFT.

SBP Advice: The bank has been asked to strengthen its processes concerning identified areas.

Punjab Provincial Cooperative Bank

Fine Received: Rs. 32 million

On account of: Its failure to enforce regulatory instructions pertaining to AML/CFT.

SBP Advice: The bank has been asked to strengthen its processes concerning identified areas.

First Women Bank Limited

Fine Received: Rs. 31.5 million

On account of: Violation of regulatory instructions pertaining to Asset Quality, CDD/KYC & General Banking Operations.

SBP Advice: The bank has been advised to strengthen its processes concerning identified areas.

Soneri Bank and Bank Alfalah

Fine Received: Rs. 12.5 million and Rs. 11.1 million respectively

On account of: Failure of following regulatory instructions pertaining to Asset Quality, FX, General Banking Operation.

SBP Advice: The banks have been asked to strengthen their processes concerning identified areas.

Pak Brunei Investment Bank

Fine Received: Rs. 10.4 million

On account of: Violation of regulatory instructions pertaining to CDD/KYC, Asset Quality & General Banking Operations.

SBP Advice: The bank has been asked to strengthen its processes concerning identified areas.

Experts believe that SBP should continue with its code of strict rules and regulations to penalize commercial banks. They say that banks committing violations of rules (repeatedly) should be scrutinized strictly, including additional penalties. According to experts, the banking regulator – SBP – should also penalize banks failing to provide quality services to their customers through enforcement orders.

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