Business

Four Pakistani banks fined over Rs83m for violating laws

Published

1 year ago

Farwa

Banks told to enhance their systems, controls.
UBL received the largest fine of Rs26.500m.
Probe was conducted into currency manipulations.

KARACHI: The State Bank of Pakistan (SBP) fined United Bank Limited (UBL), The Bank of Punjab (BoP), JS Bank Limited (JSBL) and Allied Bank Limited (ABL) for violating banking laws.

These four financial institutions were fined a total of Rs83.157 million in the first quarter (July-September) of the current fiscal year for violating the central bank’s directives regarding foreign exchange, customer due diligence and general banking operations.

According to the details of the significant enforcement action that the SBP posted on its website on Tuesday, UBL received the largest fine, amounting to Rs26.500 million, followed by BoP (Rs21.569 million), JS Bank (Rs18.510 million) and ABL (Rs16.578 million).

The banks were penalised for breaking rules pertaining to know your customer and customer due diligence, foreign exchange trading and general banking activities.

In addition to penal action, these banks have been advised by the SBP to strengthen their systems and controls to prevent future regulatory infractions.

The penal actions are based on deficiencies in the compliance of regulatory instructions and do not constitute a comment on the financial soundness of these banks, according to the SBP.

Last year, the government launched investigations into banks that it claimed were manipulating currencies to increase their gains and profits.

However, neither the findings of the report nor the penalty or fiscal action taken against the banks were made public.

Short forex liquidity, short net open forex positions held by the banks and greater currency volatility and uncertainty were cited as the main reasons why the banks’ spreads were higher.

Despite the economic troubles that the country faced in 2022, the banking industry remained resilient which witnessed a strong growth of 19.1% in its assets.

This expansion was mainly driven by investments while advances decelerated, said the SBP’s annual flagship publication, the Financial Stability Review for 2022.

The contained delinquencies and higher profitability supported banks’ solvency as the capital adequacy ratio stood at 17.0% – well above the minimum regulatory requirement of 11.5%.

The Islamic banking segment also observed robust growth of 29.6% during 2022.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

2 days ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

2 days ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

2 days ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.