KARACHI: The National Bank of Pakistan (NBP) is fully committed to satisfying US regulators, the bank said on Friday, a day after heavy fines were imposed on its New York branch.

The Federal Reserve Board and Federal Reserve Bank of New York, and the New York State Department of Financial Services announced on Thursday that NBP’s New York branch would be fined up to $55.4 million for non-compliance and anti-money laundering violations.

In a notice to the Pakistan Stock Exchange on Friday, the NBP said it had reached an agreement with the US regulators. “The agreement includes fines totalling $55.4 million focused on historical compliance programme weaknesses and delays in making compliance-related enhancements,” it said.

There were no findings of improper transactions or wilful misconduct, the bank added.

When asked about the current status of the NBP’s branch in New York, no reply was received from the NBP, Karachi. The press release issued by the bank did not mention whether the New York branch would be operative or not.

The bank’s shares were down 7.2 per cent on Friday to close at Rs30.99.

The New York branch has been under new management since May 2020 and has substantially enhanced its compliance programme, the NBP said, adding that the US regulators had recognised many positive changes resulting from the new management. “The National Bank of Pakistan and the New York branch are fully committed to satisfying the regulators’ expectations,” it added.

Pakistan’s largest bank, HBL, also faced a similar fine in 2017, where the US regulators initially imposed a penalty of $630m for non-compliance with anti-money laundering laws, which was later revised down to $225m. The HBL had to close its branch in New York.

Published in Dawn, February 26th, 2022