South Asia and Beyond

National Bank Of Pakistan Fined $55 Mn For Anti-Money Laundering Violations

The National Bank of Pakistan (NBP) has been fined more than $55 million by authorities in the United States for violating anti-money laundering provisions and for compliance failures. The Federal Reserve Board imposed a penalty of $20.4 million, saying the firm’s U.S. banking operations did not maintain an effective risk management programme or controls sufficient to comply with anti-money laundering laws. The action was in conjunction with an action by the New York State Department of Financial Services (NYDFS), which imposed a penalty of $35 million on the bank for ‘repeated compliance failures’. “The National Bank of Pakistan allowed serious compliance deficiencies in its New York branch to persist for years despite repeated regulatory warnings,” said Superintendent Adrienne A. Harris. A release by the department said investigations by the NYDFS and the Federal Reserve Bank of New York in 2014 and 2015 found NBP’s New York’s branch to have “inadequate Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance programmes, serious issues with its transaction monitoring system, and significant shortcomings in managerial oversight”. In 2016, the NBP gave a written agreement in which it “acknowledged the oversight and compliance deficiencies and agreed to remediate them”. But the bank “failed to adequately supervise the branch by allowing problems to worsen year after year. The conditions at the branch demonstrated severe weaknesses, and unsafe, unsound conditions requiring urgent restructuring,” the department said.

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