NBP fined $55m by US authorities for anti-money laundering violations, compliance failures – Business

The National Bank of Pakistan (NBP) has been fined more than $55 million by US authorities for anti-money laundering violations and repeated failure to comply, it was revealed on Thursday.

The Federal Reserve has announced that it will impose a $20.4 million fine on banks for violating anti-money laundering laws. According to press release The anti-money laundering program issued by the Fed will also require banks to improve.

The Fed went on to say that the NBP’s US banking “did not maintain effective risk management programs or controls sufficient to comply with anti-money laundering laws.”

The action is related to the action of the New York State Department of Financial Services (NYDFS), which imposed a $35 million fine for “repeated compliance failures,” he added.

NYDFS Superintendent Adrienne A. Harris announced that the NBP and the NY chapter have reached an agreement to pay the fine.

“The NBP has allowed the NY branch’s serious compliance flaws to persist for years, despite repeated regulatory warnings.” press release I was quoting Harris.

After an investigation by NYDFS and the Federal Reserve Bank of NY in 2014 and 2015, the NY branch found “improper Bank Security Act/Anti-Money Laundering (BSA/AML) Compliance Program, Serious Problems with Transactions” .Significant shortcomings of monitoring systems and management oversight”.

Enforcement action was taken against the bank in 2016 in the form of a written agreement in which the NBP acknowledged the supervisory and compliance deficiencies and agreed to correct them, the statement said.

However, the condition of the branch and its risk management and compliance programs continued to deteriorate.

‚ÄúThese continuing failures are that the branch’s senior management fails to encourage or promote a compliance culture, adequate resources for compliance programs have not been provided, and the bank has failed to adequately supervise the branch by allowing the problem to worsen over the years. The governor showed serious weaknesses and an unsafe and unhealthy situation that required urgent restructuring,” the press release said.

If an agreement is reached, the NBP should develop a written plan detailing improvements to the bank’s BSA/AML compliance program, its suspicious activity monitoring and reporting program, and its policies and procedures for customer due diligence requirements, it added.

The statement said, “In addition, at the Department’s discretion, banks may be required to employ independent consultants to conduct a comprehensive assessment of the improvement efforts of banks and branches.

At the same time, NYDFS also acknowledged the bank’s cooperation in investigation and continuous improvement efforts.