Banks slapped for rule violations

Rule violations – The State Bank of Pakistan slapped penalties worth Rs.350.8 million on six commercial banks pointing out the gradually increasing flaws in the commercial banking sector. Interestingly, this penalty amount is up 167 per cent from a year ago with the number of erring banks doubled. The central bank pointed out that it has taken supervisory enforcement actions when banking entities become non-compliant with regulations. It usually imposes penalties but may also resort to administrative and financial sanctions in addition to seeking help from law enforcement and prosecution bodies. The biggest penalty of Rs.144.2 million was imposed on National Bank of Pakistan Ltd for rule violations of regulatory instructions pertaining to customer due diligence/know-your-customer as well as asset quality reflecting credit risk on loan and investment portfolios. Bank Alfalah Ltd received a penalty of Rs.125.2m for the violation of regulatory instructions about anti-money laundering/counter-financing of terrorism, customer due diligence and foreign exchange and general banking operations. The other four banks that received penalties during the last quarter from their regulator were Meezan Bank Ltd of Rs.38 million, Allied Bank Ltd of Rs.20 million, Punjab Provincial Cooperative Bank Ltd of Rs.12.2 million and Bank AL Habib Ltd of Rs.10.4million. The Weekender