For breaking the norms and regulations, the State Bank of Pakistan (SBP) fined Allied Bank Limited and three other parties severely.
According to a statement from the Banking Supervision Department of the central bank, all four banks have been hit with fines totaling Rs83.157 million.
It said that Know Your Customer (KYC), foreign exchange, and basic banking operations requirements had been broken by the banks.
It further stated that the fines did not accurately represent the financial soundness of the firms and were based on shortcomings in compliance with regulatory directives.
The SBP fined Allied Bank Limited Rs 16.578 million in August of this year for disobeying regulatory directives relating to general banking operations. It has given the bank advice on how to strengthen internal controls and prevent future infractions.
The central bank of Pakistan reacted when Allied Bank and other commercial banks continued to violate regulatory standards.
The paper, which was made accessible to the Pakistan Observer, said that the State Bank of Pakistan fined Allied Bank Rs. 20 million for breaking the guidelines.
In its most recent action, SBP discovered flaws in ABL’s system as well as other commercial banks’ unwillingness to take significant corrective action against the infractions.
The banking regulator had ordered Allied Bank to strengthen internal processes and controls after SBP identified major infractions, including breaches in Customers Due Diligence (CDD) and Know Your Customer (KYC) procedures as well as non-compliance with asset quality requirements.
The central bank has previously taken similar measures against ABL.
In 2019, the State Bank fined Allied Bank more than Rs 60 million for breaking its rules. The central bank tasked ABL with conducting an internal investigation into violations of regulatory standards and with disciplining offending employees.
In addition, the ABL President was fined by the Supreme Court of Pakistan for skipping the court hearing in a complaint brought by bank retirees. The complaint maintained that ABL never increased the retired officers’ pensions in recent years or placed any payments into the petitions’ accounts.
The nation’s highest court subsequently ordered Allied Bank executives to respect moral principles while interacting with those who had dedicated their entire lives to the bank.
For the uninitiated, Australasia Bank was the bank that preceded Allied Bank, which was founded in 1975 as a result of the merging of a few others during a period of nationalization.
The ABL representatives have chosen not to comment on the situation.
