State Bank of Pakistan fines HBL over non-compliance of regulatory requirements
14 Nov 2019

The State Bank of Pakistan (SBP) had fined Habib Bank Limited (HBL) an amount of Rs35.62 million on October 4 for violating regulations.

According to a notice issued by the SBP, the penalty was imposed mainly on the “deficiencies” in HBL’s foreign exchange operations and Customer Due Diligence (CDD).

“The bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such lapses/violations in future,” the notice read.

When reached for comment, HBL said in an email that the fine was regarding a specific set of transactions between 2015 and 2017.

“Transactional irregularities were detected in a few of our branches in Lahore. Some bank staff, acting illegally, in their individual capacity, undertook transactions that negatively impacted the bank,” the email said.

In response, HBL filed a complaint with the police, and an FIR was registered. The case is still being investigated by agencies.

“The bank endeavours to be compliant with all regulatory requirements. We take such matters very seriously,” the email added.

This is not the first time the central bank has fined HBL. On August 2-3 2019, the SBP imposed a penalty of Rs320.08 million on HBL for violating regulations on Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) regulations.

As per the SBP, HBL had also violated consumer protection regulations, specifically for “erroneous deduction of service charges from customers”.

According to HBL, the bank has been transforming its compliance systems to adhere to international standards since early 2018 and is strengthening its AML and CFT protocols by partnering with global experts.

By Meiryum Ali, Profit by Pakistan Today, 13 November 2019

Read more at Profit by Pakistan Today

Photo (cropped): Shayhaque [CC BY-SA 4.0], via Wikimedia Commons

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