New York February 24, 2022: The Federal Reserve Board on Thursday announced a $20.4 million penalty against the National Bank of Pakistan, a foreign bank operating in the United States and headquartered in Pakistan, for anti-money laundering violations. The Board will also require the firm to improve its anti-money laundering program.
As detailed in the consent cease and desist order against the National Bank of Pakistan, the firm's U.S. banking operations did not maintain an effective risk management program or controls sufficient to comply with anti-money laundering laws.
The Board's action is in conjunction with an action by the New York State Department of Financial Services. The most recent examination of the Branch conducted by the Federal Reserve Bank of New York (the “Reserve Bank”) and the New York State Department of Financial Services (“NYSDFS”) as of March 4, 2021 disclosed significant deficiencies in the Branch’s risk management and compliance with federal laws, rules, and regulations relating to anti-money laundering (“AML”) compliance, including the Bank Secrecy Act (“BSA”) (31 U.S.C. § 5311 et seq.); the rules and regulations issued thereunder by the U.S. Department of the Treasury (31 C.F.R. Chapter X); and the requirements of Regulation K of the Board of In the Matter of NATIONAL BANK OF PAKISTAN Karachi, Pakistan and NATIONAL BANK OF PAKISTAN NEW YORK BRANCH New York, New York 2 Governors to report suspicious activity and to maintain an adequate BSA/AML compliance program (12 C.F.R. §§ 211.24(f) and 211.24(j)) (collectively, the “BSA/AML Requirements”);.
Within 60 days of this Order, the Bank’s board of directors and the Branch’s management shall jointly submit to the Reserve Bank a written plan to enhance oversight, by the management of the Bank and Branch, of the Branch’s compliance with the BSA/AML Requirements acceptable to the Reserve Bank.
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