KARACHI: Enforcement actions in the July-Sep­tember quarter against four banks by the State Bank of Pakistan (SBP) resulted in penalties worth Rs83 million, down 76.3 per cent from the fines of Rs350.8m imposed in the preceding three-month period.

The central bank takes “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.

Data released by the SBP on Wednesday showed the number of erring banks decreased from six in the April-June quarter to four in the latest three-month period.

The biggest penalty was imposed on United Bank Ltd (UBL), which was in violation of regulatory instructions pertaining to foreign exchange and general banking. The amount of penalty on UBL was Rs26.5m. In addition to the penalty, the SBP asked the commercial lender to stren­gthen its controls and ensure meticulous compliance.

The Bank of Punjab Ltd received a penalty of Rs21.5m for the violation of regulatory instructions about general banking operations.

The other two banks that received penalties from the regulator during the quarter under review were JS Bank Ltd (Rs18.5m) and Allied Bank Ltd (Rs15.6m).

Relief for consumers

While the SBP imposes “monetary penalties” on banks for violating regulations, the office of the Banking Mohtasib Pakistan (BMP) provides “monetary relief” to banking customers mainly for the wrongs they suffer at the hands of fraudsters.

An independent statutory body set up to resolve disputes between banks and their consumers, the BMP provided relief amounting to Rs432.6m to banking customers by disposing of 6,421 complaints against commercial banks in July-September.

The BMP received 6,994 new complaints, including 1,753 from the Prime Minister’s Portal, from July 1 to September 30.

Published in Dawn, October 26th, 2023