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U.S. watchdog may fine Pakistan's Habib Bank up to $630 million

Staff Writer |
The New York State Department of Financial Services (DFS) said it is seeking to fine Habib Bank, Pakistan's biggest lender, up to $630 million for "grave" compliance failures relating to anti-money laundering rules and sanctions at its only U.S. branch.

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If imposed, the penalty on Habib Bank (HBL) would be the largest-ever faced by a Pakistani financial institution.

Karachi-listed HBL plans to surrender the foreign bank license for its New York branch, according to the DFS, which intends to expand its review of the bank's transactions.

The DFS said in a filing that HBL's compliance was "dangerously weak" and that "serious and persistent" failings found at its New York branch appeared to affect the entire Habib banking enterprise, posing "grave risks" to the banking system.

Nausheen Ahmad, the bank's company secretary, said in a statement on Monday that DFS did not recognize "the significant progress that HBL has made at its branch in New York" and that the bank would vigorously contest the proposed fine in U.S. courts.

HBL said the closure of its New York operation would have no material impact on HBL's business outside the United States. Pakistan's central bank said the potential fine posed no imminent risks to HBL or the country's banking system.

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