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US regulator seeks to fine Pakistan’s HBL up to $630 million

ISLAMABAD: The New York State Department of Financial Services (DFS) is seeking to fine Pakistan’s Habib Bank nearly $630 million over what it calls “deficiencies relating to compliance with state and federal laws” at the bank’s only US branch, ARY News reported on Monday.

The move is being termed as an attack on Pakistan’s financial institutions after US President Donald Trump’s August 22 speech, in which he overlooked Pakistan’s sacrifices in war on terror and instead accused Pakistan of “sheltering terrorists”.

The penalty, if imposed, would be the largest ever faced by a Pakistani financial institution.

The compliance issues date to 2015 when the DFS told Karachi-listed Habib Bank Limited (HBL) to institute a series of reforms pertaining to the bank’s policies for preventing “illicit money transfers”.

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Nausheen Ahmad, the bank’s company secretary, said in a statement on Monday 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”.

She said HBL has received a notice from DFS , which “seeks to impose an outrageous civil monetary penalty of up to $629.625 million.”

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”.

The statement added that HBL has submitted an application to DFS to shut its New York operations.





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