Pakistan Bank to Pay $55.4 Million in Settlement with U.S. Regulators

Both regulators previously took action against the bank over persistent compliance deficiencies at the New York branch. The Karachi-based, state-owned financial institution, founded in 1949, is the only Pakistani bank with a presence in New York.

In a settlement from 2016, the bank agreed to address significant shortcomings the regulators identified, but ultimately failed to do so, the regulators said.

Senior management at the bank was “unwilling or unable to promote a culture of compliance,” the New York regulator said.

The bank failed to provide sufficient resources for compliance and to adequately supervise its New York branch, allowing problems to get steadily worse, the New York regulator said. The state enforcer also noted deficiencies in the bank’s program meant to ensure compliance with U.S. sanctions.

The bank will be required to create a plan to improve its anti-money-laundering program as well as its suspicious-activity monitoring and customer due-diligence requirements.

The New York regulator said it gave substantial weight to the bank’s cooperation and efforts to improve its compliance.

The National Bank of Pakistan didn’t immediately respond to a request for comment.

The Financial Action Task Force, a Paris-based organization that sets anti-money-laundering standards, has for several years kept Pakistan on a “grey list” of countries identified as having deficiencies in their anti-money-laundering and counter-terror-financing regimes. The list comprises countries that are deemed deficient but that are working with FATF to improve.

Write to Richard Vanderford at [email protected]