LAHORE – Allied Bank continues to commit regulatory violations among other commercial banks, prompting a response from Pakistan’s central bank.
The document, available with Pakistan Observer, reveals 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.
ABL is not the only bank that comes on SBP’s radar, as the central bank imposed penalties of over Rs350 million on five other major commercial banks over violations of rules and regulations.
Allied Bank has 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 leading commercial banks were found responsible for flouting regulations related to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures as such regulations are related to foreign exchange.
ABL and other commercial banks are warned that the central bank is keeping a close eye on banking operations to safeguard the interests of customers and the financial sector. ABL has been fined for violation of regulatory instructions pertaining to Customer Due Diligence (CDD) / Know Your Customer (KYC), foreign exchange (FX) and general banking operations.
This is not the first time that Allied Bank has been fined as the central bank has also taken such actions 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.
