The State Bank of Pakistan (SBP) has imposed fines on United Bank Limited (UBL), The Bank of Punjab (BoP), JS Bank Limited (JSBL), and Allied Bank Limited (ABL) for violating banking laws in the first quarter (July-September) of the current fiscal year. The fines amount to a total of Rs83.157 million and are related to breaches of the central bank’s directives on foreign exchange, customer due diligence, and general banking operations.
According to details published by the SBP on its website, UBL received the largest fine of Rs26.500 million, followed by BoP (Rs21.569 million), JS Bank (Rs18.510 million), and ABL (Rs16.578 million).
The violations pertain to rules on know your customer (KYC) and customer due diligence, foreign exchange trading, and general banking activities. In addition to the monetary penalties, the SBP has advised these banks to enhance their systems and controls to prevent future regulatory infractions.
The SBP clarified that these penal actions are based on deficiencies in regulatory compliance and do not imply a commentary on the financial soundness of the penalized banks.
Last year, the government initiated investigations into banks suspected of manipulating currencies for increased gains and profits. However, the findings and actions taken against the banks were not publicly disclosed.
Despite economic challenges in 2022, the banking industry demonstrated resilience with a robust 19.1% growth in assets. The growth was primarily driven by investments, while advances decelerated. The Financial Stability Review for 2022, the SBP’s annual flagship publication, highlighted the industry’s contained delinquencies and higher profitability, maintaining a capital adequacy ratio of 17.0%, well above the minimum regulatory requirement of 11.5%.
The Islamic banking segment also experienced substantial growth, recording a 29.6% expansion during 2022.
