It has been
observed that violations/irregularities are recurring in the
case of several banks despite they being repeatedly reminded
of violations/irregularities in State Banks inspection
reports. Besides, a tendency has developed amongst some banks
to delay action/response on SBP instructions. This situation
is not acceptable from the regulatory point of view. With
a view to ensuring that inefficiencies in the banking institutions
are reduced to the minimum, the banking system maintains integrity
and financial soundness, and the observations/irregularities
pointed out by the SBP are taken seriously by banks and rectified
promptly, it has been decided that, in addition to any other
action that SBP may institute against any functionary of a
bank or financial institution under Section 83 of the BCO,
1962, the following scale of penalties will be applicable
with immediate effect in respect of various categories of
violations of rules and regulations.
a) |
Violation
of:-
- Cash Reserve Requirement.
ii) Statutory
Liquidity Requirement. |
i-a)
Rs 69/- per 100,000/- or part thereof per day on the
amount by which the balance with SBP falls short of
the fixed
i-b)
If the shortfall continues in the subsequent week or
thereafter, the penalty shall be increased to Rs 86/-
per 100,000/- or part thereof per day.
ii) Rs
86/- per 100,000/- or part thereof per day on the amount
by which the liquid assets fall short of the fixed minimum.
|
b) |
Violation
of instructions regarding operations of Deposit Accounts
and payment of Return. |
Rs.
20,000/- per case and /or Rs 1,00/- per day for the
period of the irregularity, and/or disciplinary action
against responsible official(s). |
c) |
Violation
of instructions regarding operating of account |
Rs
20,000/- per case and/or Rs 1,000/- per day for the
period of the irregularity, and/or disciplinary action
against responsible officials ( s). |
d) |
Violation
of security requirement for grant of loans and advances. |
Rs
20,000/- per case and/or Rs 1,000/- per day for the
period of the irregularity, and/or disciplinary action
against responsible official (s). |
e) |
Violation
of instructions / regulations regarding grant of financing
facilities. |
Rs
20,000/- per case and/or Rs 1,000/-per day for the period
of the irregularity, and/or disciplinary action against
responsible officials (s). |
f) |
Violation
of rules & regulations including those relating
to issuance off Letter of Credit and Guarantees. |
Rs
20,000/- per case and/or Rs 1,000/-per day for the period
of the irregularity, and/or disciplinary action against
responsible officials (s). |
g) |
Violation
of other Prudential Regulations, provisions of Banking
Companies Ordinance, 1962, Banks Nationalisation Act,
1974 and State Bank of Pakistan Act, 1956 |
Rs
20,000/- per case and/or Rs 1,000/-per day for the period
of the irregularity, and/or disciplinary action against
responsible officials (s). |
h) |
Delayed
submission of Returns, concealment or misreporting of
data/information to the State Bank of Pakistan. |
Rs
20,000/- per case and/or Rs 1,000/-per day for the period
of the irregularity, and/or disciplinary action against
responsible officials (s). |
i) |
Violation
of instructions regarding location, opening and shifting
of branches. |
Rs
20,000/- per case and/or Rs 1,000/-per day for the period
of the irregularity, and/or disciplinary action against
responsible officials (s). |
j) |
Violation
of regulations regarding grant off financing facilities
in respect of Export Finance Scheme/Locally Manufactured
Machinery. |
As
already notified by State Bank of Pakistan from time
to time. |
k) |
Excess
lending to autonomous bodies from their prescribed limit |
As
notified vide BCD circular letter No. 27/127 Priv-88
dated 12-11-1988. |
3. It has also been
decided that, henceforth, banks found to be repeating or committing
the same violations/irregularities in the following year(s)/period(s)
except those relating to Cash Reserve Requirement/Statutory
Liquidity Requirement would be subjected to levy of a surcharge
@ 25% compounded on succeeding year as compared to the year,
it was first pointed out.
4. Banks are advised
to note the new scale of fines/penalties as also their progressive
nature and to circulate among managers of all their branches.
It may also be noted that fine/penalty once levied due to
mistake in reporting or any other lapse on the part of banks
system as a whole to ensure compliance with Prudential Regulations
other directives of the State Bank of Pakistan in letter and
spirit.
Please acknowledge receipt.
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