Following Prime Minister Imran Khan’s impactful visit to Russia, US regulators have penalized the National Bank of Pakistan (NBP) $55.4 million for alleged anti-money laundering offences.
The US Federal Reserve Board levied a $20.4 million fine on the National Bank of Pakistan for alleged anti-money laundering offences, according to reports. The corporation will also have to upgrade its anti-money laundering policy, according to the Board.
The fines by the Federal Reserve Board and the New York’s Department of Financial Services (NYDFS) led to a 7% drop in NBP’s shares Friday.
In a notice to the Pakistan Stock Exchange (PSX) on Friday, NBP said it has reached an agreement with US regulators.
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“The agreement includes fines totalling $55.4 million focused on historical compliance programme weaknesses and delays in making compliance-related enhancements,” the notice said.
The National Bank of Pakistan’s United States banking operations did not have an adequate risk management programme or controls sufficient to meet with anti-money laundering legislation, according to the consent cease and desist order.
Meanwhile, New York State Department of Financial Services Superintendent Adrienne A. Harris stated on Thursday that the National Bank of Pakistan and its New York branch have agreed to pay $30 million in fines as part of a Consent Order with the department (DFS).
“Despite repeated regulatory warnings, the National Bank of Pakistan permitted major compliance issues in its New York office to persist for years,” Superintendent Harris stated.
Pakistan’s largest bank, HBL, also faced a similar fine in 2017, when US regulators initially imposed a penalty of $630 million for non-compliance of anti-money laundering laws, which was later revised down to $225 million.
