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Four Pakistani banks fined over Rs83m for violating laws

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  • 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.

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Islamic Sukuk Bonds: Government Is Expected To Begin Bond Auction Next Week

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There is now more positive economic news for the people of Pakistan. The government is anticipated to begin the Sukuk Islamic Bond auction next week, after the central bank’s announcement of a large drop in the policy rate.

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SIFC Encourages Green Tourism: Reforming Visas to Increase Investment

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Enhancing investment in the tourism sector, Green Tourism Pakistan’s initiative has received backing from the Special Investment Facilitation Council.

Visa-On-Arrival for 126 countries, Visa-Free Entry for Gulf Cooperation Council nations, and 24-hour expedited visa processing are some of the main features of the Green Tourism Visa Policy.

It is anticipated that these endeavors will draw in about 80 million dollars in foreign direct investment and 8.3 billion rupees in domestic investment.

Green Tourism Private Limited has introduced hunting resorts in Naltar, Hunza, and Skardu, along with four- and five-star city hotels, to improve the tourism experience.

In the first phase of the project, 17 of the 78 areas have seen the start of development activity.

Approved is a central authority for Green Tourism that will supervise the growth of Air Operations.

To promote Religious Tourism, extra precautions have been taken to guarantee the security of visitors from all religions, including Sikhs and Buddhists.

Furthermore, in order to improve the quality of the tourist experience, the green guide quality program has been introduced to supply top-notch tour guides.

There is now a deluxe bus excursion from Islamabad to Peshawar that promotes local culture.

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July 2024 export data from Pakistan shows a significant rise.

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The Strategic Investment Facilitation Council (SIFC) has been instrumental in improving Pakistani products’ access to international markets, as seen by the significant surge in exports from the country at the start of the 2024–25 fiscal year.

With a 7.26% rise over the same month the previous year, July 2024 exports to the US were $476.017 million. After increasing by 7.74% annually, the United Arab Emirates emerged as the second-largest export destination.

The third and fourth places were occupied by exports to the UK ($183.303 million) and China ($60.100 million). A substantial increase in exports to Afghanistan was recorded in July of this year, rising from $46.262 million to $88.065 million, largely due to successful anti-smuggling efforts.

With a combined export volume of $553.951 million, more important export destinations included Germany, the Netherlands, Italy, Spain, Saudi Arabia, and Turkey.

A bright future for the national economy is suggested by the growing confidence major international markets have in Pakistani exports. Through the efforts of SIFC and the government, this greater access to global markets has been made possible.

Pakistan’s economy is predicted to remain stable as a result of the export growth that SIFC has enabled.

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