State Bank of Pakistan (SBP) imposes heavy fines on four banks
Four Pakistani banks, namely United Bank Limited, The Bank
of Punjab, JS Bank Limited, and Allied Bank Limited, have incurred fines
totaling Rs83.157 million during the first quarter of the current fiscal year
(July-September). These penalties were imposed by the State Bank of Pakistan
(SBP) due to violations of its guidelines related to foreign exchange, customer
due diligence, and general banking operations.
United Bank Limited (UBL) received the highest fine,
amounting to Rs26.500 million, followed by The Bank of Punjab with Rs21.569
million, JS Bank with Rs18.510 million, and Allied Bank with Rs16.578 million.
State
Bank imposes Rs. 350 Million fine on six banks
The infractions leading to these fines primarily revolve
around non-compliance with know your customer and customer due diligence
regulations, foreign exchange trading rules, and general banking practices.
The SBP has also advised these banks to enhance their
systems and controls to prevent future regulatory breaches. It's important to
note that these penalties are based on shortcomings in complying with
regulatory instructions and do not reflect on the financial stability of these
banks, as clarified by the SBP.
In the previous year, the government initiated
investigations into allegations of currency manipulation by certain banks to
boost their profits. However, the findings of the report and any subsequent
actions taken against these banks were not publicly disclosed. Factors such as
short forex liquidity, short net open forex positions held by the banks, and
increased currency volatility and uncertainty were cited as the main reasons
for higher bank spreads.
President
imposes fine on UBL on irresponsible representation
Despite the economic challenges faced by the country in
2022, the banking industry remained robust. The sector saw a substantial 19.1
percent growth in its assets, primarily driven by investments, while advances
slowed down. This information comes from the SBP's annual flagship publication,
the Financial Stability Review for 2022.
Moreover, the banks' strong capitalization and reduced
delinquencies ensured their solvency, with a capital adequacy ratio of 17.0
percent, well above the minimum regulatory requirement of 11.5 percent. The
Islamic banking segment also experienced impressive growth, expanding by 29.6
percent in 2022.
Source: The News