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HBL, MCB Bank stand tall with Rs 320m, Rs 159m penalty each

1-Violation of Anti-Money Laundering, Terrorism Financing Rules prompted SBP Offsite Supervision & Enforcement Department to take action

 2-The other eight banks included Dubai Islamic Bank, Silkbank Limited, Bank Alfalah Limited, Allied Bank Limited, Sindh Bank Limited, Summit Bank Limited, JS Bank Limited and Habib Metropolitan Bank Limited

M Jahangir Hayat

LAHORE: Habib Bank Limited (HBL) and MCB Bank stand tall with monetary penalty of Rs 320.8 and Rs 159 million in the ten banks for the non-compliance of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT).

The other eight banks which were imposed penalty included Dubai Islamic Bank, Silkbank Limited, Bank Alfalah Limited, Allied Bank Limited, Sindh Bank Limited, Summit Bank Limited, JS Bank Limited and Habib Metropolitan Bank Limited.

As per details the State Bank of Pakistan (SBP) Offsite Supervision & Enforcement Department imposed monetary penalty on the above banks for the violations in the areas of AML/CFT, Asset Quality and others.

Habib Bank Limited: The Offsite Supervision and Enforcement Department imposed the heaviest monetary of Rs 320.8 million on Habib Bank Limited for the violations in the areas of AML/CFT, Consumer Protection. The bank was imposed monetary penalty 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 and violations in future.

MCB Bank stood second in terms of mega monetary penalty of Rs 159.152 million for the violations in the areas of AML/CFT, Asset Quality. The monetary penalty was imposed mainly on deficiencies in the areas of AML/CFT. The bank has been advised timelines to improve the Know Your Customers (KYC) and Customers Due Diligence (CDD) processes and integrate eKYC system with core banking system.

 Dubai Islamic Bank was imposed monetary penalty of Rs 77.974 million for violations in the areas of AML/CFT, Asset Quality. The Monetary penalty was imposed mainly on deficiencies in the areas of AML/CFT. Moreover the bank has been advised timelines to rectify the operational lapses and improve the control environment to avoid recurrence of such lapses/violations in future.

JS Bank Limited was imposed monetary penalty of Rs 70.307 million for violations in the areas of AML/KYC, Asset Quality, Corporate Governance. The monetary penalty was imposed mainly 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 was imposed monetary penalty of Rs 53.879 million for violations in the areas of AML/KYC, Asset Quality. The monetary penalty was imposed mainly on violations of non-surrendering of unclaimed deposits, non-classification of loans and adjustment lending. Moreover, the bank has been advised timelines to classify advances & create provision there against and conduct monetary penalty was imposed mainly on violations of non-surrendering of unclaimed deposits, non-classification of loans and adjustment lending. Moreover, the bank has been advised timelines to classify advances & create provision there against and conduct.

Bank Alfalah Limited was imposed Rs 52.795 million for Violations in the areas of FX Operations. The monetary penalty was imposed mainly on violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non-submission of documents against advance payments.

Allied Bank Limited was imposed monetary penalty of Rs 32.755 million. The Monetary penalty was imposed on breach of various limits of Equity Investment/related party and deficiencies in customer due diligence process. The bank has been advised to ensure timelines to bring equity Investment and exposure to related party group within the prescribed limit and revise the KYC/CDD process.

Sindh Bank Limited was imposed Rs 15.088 million for violations in the areas of AML/KYC, Asset Quality, FX Operations. The monetary penalty was imposed mainly on deficiencies in customer due diligence practices, imprudent lending practices, non-classification of loans. Moreover, in view of the strategic deficiencies in transaction monitoring system and name screening process, the bank has been advised an action plan/timelines for replacement of their existing Treasury Management System (TMS) and acquiring of name screening solution.

Summit Bank Limited was imposed a monetary penalty of Rs 13.072 million for Violations in the areas of AML/KYC, Asset Quality. Monetary penalty was imposed mainly on deficiencies in customer due-diligence process, mis-utilization of loans and non classification of loans. The bank has been advised to timely update the customers’ profiles and properly document the reasons of large value transactions.

Habib Metropolitan Bank Limited was imposed a monetary penalty of Rs 10 million for violations in the areas of FX Operations. The monetary penalty was imposed mainly on a violation of foreign exchange regulations relating to splitting of the import advance payments into smaller transactions.

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