Business Pakistan

State Bank penalizes 10 banks for violating Anti-money laundering laws

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KARACHI: The State Bank of Pakistan (SBP) has imposed penalties on ten banks amounting to Rs. 805 million for violation of Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) laws.

In a circular, SBP laid out details of the amount of fine on each bank and the reasons for it. 

While Habib Bank Limited received the biggest fine of Rs Rs. 320.08 million amongst all banks, Other penalized banks include MCB Bank, Dubai Islamic Bank, JS Bank, Silk Bank, Bank Alfalah, Allied Bank, Sindh Bank, Summit Bank, and Habib Metropolitan Bank.

The strict actions and penalties, as well as their public disclosure, suggests that the issue of AML/CFT compliance is being pursued by SBP under strict guidance from the Financial Action Task Force (FATF) to help pull the country out of the grey list.

It is important to note that the fines weren’t just for non-compliance of AML/CFT laws, but also included areas of “erroneous deduction of service charges from customers” to poor implementation of Know-Your-Customer policies as well as inadequate monitoring of asset quality.

SBP had previously imposed Rs. 186 million fine on four banks owing to non-implementation of AML laws in August this year.

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