HBL got fined for “serious deficiencies” in its anti-money laundering programme spanning
Pakistan’s largest private bank Habib Bank Limited announced to wind up its operations in New York after getting $630m penalty notice form United States regulatory department.
According to the press release of State Bank Pakistan, HBL New York branch has received a notice of New York State Department of Financial Services (NYDFS) for the civil penalty.
New York’s banking regulator has issued $630m penalty notice to HBL for non-compliance with financial standards and practices at its New York branch.
According to details, the case stems from 2015, when US authorities moved against the bank after finding deficiencies in the risk management and Bank Secrecy Act/Anti-Money Laundering compliance programme at HBL’s New York branch.
Meanwhile, HBL has indicated its plans to withdraw from New York following intimation from the state’s financial regulator but the banking regulator is insisting on a hearing next month.
The US Federal Reserve had barred HBL from conducting any dollar-clearing transactions or accepting any new accounts for US dollar clearing in December 2015. However, HBL had clarified at the time that it maintains its US license and would continue to provide services as usual.
Nausheen Ahmad, the bank’s company secretary, said in a statement on Monday that HBL has received a notice from DFS, which “seeks to impose an outrageous civil monetary penalty of up to $629.625 million.”
She said that despite HBL’s “sincere and extensive remediation measures, DFS is still not appreciating or recognizing the significant progress that HBL has made at its branch in New York”.
HBL said that it will “vigorously contest” the fine in US courts, adding that there will be no “material impact on HBL’s business outside of the United States”.
“These orders impose certain additional requirements to remediate on the branch and provide mechanisms for enforcement if the remediation is not met,” the HBL said.
However, the State Bank press release confirmed that the HBL operations within Pakistan will not be affected.