SBP Slaps Reduced Penalties on Four Banks in Q3, Totaling Rs83 Million, as Banking Violations Decline

Enforcement actions taken by the State Bank of Pakistan (SBP) against four banks in the July-September quarter resulted in penalties totaling Rs83 million. This represents a significant decrease of 76.3% compared to the fines amounting to Rs350.8 million imposed in the previous three-month period.

The SBP initiates “supervisory enforcement actions” when banking institutions fail to comply with regulatory requirements. While penalties are the common form of enforcement, the SBP may also resort to “administrative and financial sanctions” and involve law enforcement and prosecution authorities.

Data released by the SBP revealed that the number of banks in violation decreased from six in the April-June quarter to four in the latest three-month period.

The largest penalty was levied on United Bank Ltd (UBL), amounting to Rs26.5 million, for breaching regulations related to foreign exchange and general banking. In addition to the penalty, the SBP instructed UBL to enhance its controls and ensure strict compliance.

The Bank of Punjab Ltd faced a penalty of Rs21.5 million for violations related to general banking operations. JS Bank Ltd was penalized Rs18.5 million, and Allied Bank Ltd received a penalty of Rs15.6 million from the regulator during the reviewed quarter.

On another note, the Banking Mohtasib Pakistan (BMP), an independent statutory body established to resolve disputes between banks and their customers, provided monetary relief amounting to Rs432.6 million to banking customers. This relief resulted from the resolution of 6,421 complaints against commercial banks in July-September.

During this period, the BMP received a total of 6,994 new complaints, including 1,753 filed through the Prime Minister’s Portal, reflecting the ongoing efforts to address customer grievances in the banking sector.