Four Pakistani Banks Fined Over Rs83 Million for Violating Banking Laws

Four Pakistani Banks Fined Over Rs83 Million for Violating Banking Laws Four Pakistani banks recently faced fines totaling over Rs 83 million for violating banking laws, imposed by the State Bank of Pakistan (SBP). The banks in question are United Bank Limited (UBL), The Bank of Punjab (BoP), JS Bank Limited (JSBL), and Allied Bank Limited (ABL). These penalties were incurred during the first quarter of the current fiscal year, spanning from July to September.

UBL bore the highest fine, amounting to Rs 26.5 million, followed by BoP with Rs21.569 million, JS Bank with Rs18.510 million, and ABL with Rs16.578 million.

The fines were imposed on these banks because they didn’t follow the rules which were  set by the central bank.

These banks didn’t do a good job following the rules about identifying their customers, trading foreign money, and doing regular banking tasks. Apart from the fines, the central bank has told these banks to improve their systems and controls to avoid breaking the rules again in the future.

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It’s important to understand that these actions don’t mean the banks are financially unstable. Instead, they had problems following the rules. Last year, the government started looking into whether some banks were manipulating money to make more profit, but they didn’t tell the public what they found or did about it.

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The banking industry in Pakistan exhibited resilience in 2022, with assets growing by 19.1%. This growth was primarily driven by investments, although advances slowed down. The banks’ solvency remained strong, with a capital adequacy ratio of 17.0%, well above the regulatory requirement of 11.5%.