State Bank penalises three banks

Updated 05 Oct 2019

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State Bank of Pakistan slaps penalties worth Rs133.3 million on three small banks due to procedural violations in KYC/CDD.
State Bank of Pakistan slaps penalties worth Rs133.3 million on three small banks due to procedural violations in KYC/CDD.

KARACHI: The State Bank of Pakistan (SBP) on Friday penalised three banks for violating customer due diligence and know your customers (CDD/KYC) protocols.

The central bank slapped penalties worth Rs133.3 million on the three small banks due to procedural violations in areas of KYC/CDD.

In addition to penal action, the central advised these banks to strengthen their KYC/CDD processes in order to avoid similar violations in future.

Last month, the central bank penalised various banks to pay Rs805m for the violating the KYC/CDD regime. The central bank’s penalties aim to clamp down terror financing and money laundering.

The country’s banks are also under pressure to follow the KYC/CDD protocols since the penalties are significantly high indicating central bank’s seriousness over the issue.

The central bank’s penalties come at a time when the government is struggling to avoid the international Financial Action Task Force’s black list. The international watchdog’s scheduled meeting, due later this month, would review Pakistan’s compliance with the anti-money laundering and counter terror-financing laws.

Published in Dawn, October 5th, 2019