WASHINGTON: The Federal Reserve Bank on Thursday ordered United Bank Limited to toughen its anti-money laundering policies as the regulator faulted the Pakistani bank for not doing enough to track suspicious transactions.
The Thursday order is at least the second time that the Fed has sanctioned the Pakistan-based bank in recent years. In 2013, the Fed ordered United Bank to closely monitor remittances from New York City to Karachi and faulted the bank’s anti-money laundering oversight.—Reuters
Our reporter adds: The order emanated from an agreement entered into between the bank and the regulator in which the bank agreed to a specific series of steps it will take “to report suspicious activity” and comply with the Bank Secrecy Act and anti money laundering provisions. with particular emphasis on its international remittances business.
UBL first disclosed the agreement in its annual report in December 2017. “UBL and its New York branch have entered into a written agreement in 2013 with the Federal Reserve Bank New York (FRBNY) to address certain compliance and risk management matters relating primarily to compliance with Anti-Money Laundering Regulations including the Banking Secrecy Act,” it said in a note on p.38 of the report.
“[The bank] management is in the process of addressing the matters highlighted in the written agreement and in the subsequent inspections. While the bank seeks to comply with all possible laws and regulations and at this stage there is no indication of any financial impact, it is not possible to ascertain the eventual outcome of these matters,” it concluded.
UBL shares took a strong battering after the disclosures, fueled by rumours of serious regulatory problems and possible heavy fines.
Its spokesman said “the bank is following prudent policies and is mindful of safeguarding the interests of all the stakeholders.”
Further details about the current order from the Fed are not yet available. UBL spokesman did not take calls requesting comment.
Published in Dawn, July 13th, 2018