The President/ Chief Executive,
All Banks/DFIs

Dear Sirs / Madam,

Recovering Penalty Amount Imposed By State Bank of Pakistan from Customers

It has been observed that some banks/DFIs are engaged in the practice of recovering the amount of penalty imposed by State Bank of Pakistan for violating SBP regulations/guidelines/directives etc. from their customers by including a standard clause to this effect in their agreements/documents. The penalty imposed by State Bank of Pakistan on banks/DFIs because of their negligence/oversight should not be passed on to their customers who do not have any responsibility in this respect. It is the duty of the banks/DFIs to make sure that all SBP regulations/guidelines/directives are meticulously complied with at all times. Accordingly, banks/DFIs are advised to immediately stop the practice of recovering the amount of penalty imposed for violating SBP regulations/guidelines/directives etc. from their customers.

2. In exceptional cases where a specific requirement is not being complied with, banks/DFIs should approach SBP for exemption/relaxation which will be considered on the merit of the case.

3. Please acknowledge receipt.