KARACHI – The State Bank of Pakistan (SBP) has imposed heavy fine on Allied Bank Limited and three others for violating the rules and regulations.
A statement issued by the central bank’s Banking Supervision Department said fines worth Rs83.157 million has been imposed on all the four banks.
It said the banks were found guilty of breaching the standards of Know Your Customer (KYC), foreign exchange, and general banking operations.
It added that the penalties were based on deficiencies in the compliance of regulatory instructions and did not reflect the financial soundness of the entities.
In August this year, the SBP has imposed a fine of Rs16.578 million on Allied Bank Limited for violating the regulatory instructions pertaining to General Banking Operations. It has advised the bank to improve its internal processes in order to avoid violations in the future.
Allied Bank continued to commit regulatory violations among other commercial banks, prompting a response from Pakistan’s central bank.
The document, available with Pakistan Observer, revealed that the State Bank of Pakistan has slapped a penalty of Rs20 million on Allied Bank for failure to comply with rules.
SBP, in its recent move, found weaknesses in ABL’s system and the failure of other commercial banks to undertake extensive remedial actions against the violations.
Allied Bank had been advised to improve internal processes and controls by the banking regulator as SBP pointed out serious violations including failures in Customers Due Diligence (CDD) and Know Your Customer (KYC) procedures, as well as non-compliance with regulations pertaining to asset quality.
The central bank has also been taken such actions against ABL in the past.
In 2019, State Bank imposed over Rs60 million on Allied Bank for violating its regulations. ABL was directed by the central bank to conduct an internal inquiry on breaches of regulatory requirements and to take disciplinary action against delinquent officials.
Furthermore, the Supreme Court of Pakistan imposed a fine on ABL President for evading the court hearing in a case filed by bank pensioners. The plaintiff maintained that ABL never raised the pensions of the retired officers in the last decades nor made any contributions to the petitions’ accounts.
The country’s top court then directed senior officials of Allied Bank to uphold the moral standards while dealing with the people who worked, their whole lives for the bank.
For the unversed, Allied Bank came into being in 1975 after the merger of a few banks amid nationalization; its predecessor was Australasia Bank.
The ABL officials have declined to comment on the development.
