Significant irregularities have been noticed in the Middle Eastern operations of a Pakistani bank, namely Habib Bank Ltd. The Financial Action Task Force drew up a report after adding Pakistan to the monitoring list. FATF was to review Pakistan’s economic position and the matters that it has taken to counter money laundering and other forms of money related frauds. Pakistan is right on the edge of the list and could flip to the blacklist with the latest findings in Habib Bank’s operations.
It has come to light that one of the branches issued pay orders in their own names to help some distinguished customers.
The previous September, New York’s banking regulator fined the Karachi-based bank for weak anti-money-laundering controls and sanctions compliance and ordered it to surrender its license, effectively removing the lender from the U.S. financial system.
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According to Bloomberg,
State Bank of Pakistan said its draft and final inspection reports are confidential and as a result it’s unable to comment “on the veracity of observations purportedly related to inspection reports or inspection process.”
The draft report on the U.A.E. operations of Habib Bank was prepared soon after an on-site inspection by the central bank. It includes lists of customer accounts that were flagged for allegedly involving various violations by Habib Bank staff. The final report has the same broad conclusions but incorporates input from the bank, and omits the lists of specific accounts.
According to the State Bank report,
the U.A.E. operation’s results for the period ended Sept. 30, 2018, the local business failed to comply with instructions from the head office in Karachi to close the accounts of all Iranian nationals. Some accounts were still active despite the lapse of a “significant time period,” the report said. The bank was in the process of closing the remaining accounts “where possible,” it added.
