In Karachi, the State Bank of Pakistan (SBP) has imposed fines on four major banks: United Bank Limited (UBL), The Bank of Punjab (BoP), JS Bank Limited (JSBL), and Allied Bank Limited (ABL). These fines, totaling Rs83.157 million, were levied during the first quarter of the current fiscal year (July-September) for various violations of banking regulations set by the central bank. The penalties were related to issues such as foreign exchange operations, customer due diligence, and general banking activities.
To break down the fines, UBL received the highest penalty at Rs26.500 million, followed by BoP with Rs21.569 million, JS Bank with Rs18.510 million, and ABL with Rs16.578 million.
In response, the State Bank of Pakistan has not only fined these banks but also advised them to enhance their systems and controls to prevent future breaches of regulatory guidelines.
It’s important to note that these penalties are rooted in compliance issues and don’t reflect on the financial stability of these banks, as clarified by the State Bank.
Despite economic challenges in 2022, the banking industry in Pakistan displayed resilience, with a robust 19.1% growth in its assets. This growth was driven by investments, while lending activities slowed down.
According to the State Bank’s Financial Stability Review for 2022, well-maintained loan portfolios and increased profitability contributed to the banks’ financial stability, as evidenced by a capital adequacy ratio of 17.0%, comfortably surpassing the minimum regulatory requirement of 11.5%.
Furthermore, the Islamic banking sector experienced substantial growth, expanding by 29.6% during 2022.