HBL New York Branch Case

Habib bank Limited(HBL) is one of the largest banks in Pakistan, in terms of their seniority and vast range of products it offers. Recently, in August 2017, the bank was fined $630 million for its alleged wrong practices by Financial Regulatory Authority; DFS (Department of Financial Services), which regulates or supervises different types of financial institutions. 

DFS Found 53 different violations in HBL’s business practices. Specifically, Department of Financial Services, alleged that HBL shoulders a clearing account in Bank Al-Rajhi, Saudi Arabia Largest Private bank, which is alleged continuously of having the links with extremism and terrorism. 

Another allegation of crime held by DFS on HBL is that, HBL has done “Wire-Stripping”, because it has removed the payment information of a Chinese weapons manufacturer, sanctioned by U.S Government.

The Regulator also posed that, the payment worth more than $ 27,000 was sent to the account of those people, who were wanted by FBI. 

Moreover, DFS also allege that, HBL did not screened 4,000 transactions and labeled them as “Good-Guys”, because the bank considered them as low risk. However, 150 of those Good-Guys were already sanctioned by U.S Government and those 150 Good-Guys include; The leader of banned Pakistan terrorist outfit and International Arm dealer. 

Department of Financial Services(DFS) Finned $630 Million to HBL and told them to close their New York Branch. 

Habib Bank limited(HBL) was initially fined $630 million for their different violations. HBL Chief executive, Noman Karamat Dar, said in the press briefing in Islamabad, that HBL accept its mistakes, but the fined charged is much larger as compared to their mistakes. Initially HBL sought to contest the fine in U.S court but they settled somehow. 

 Rumors suggest that the Price agha khan was involved in bring the amount to the bearable digits. According to Department of Financial Services(DFS), the HBL reached the statement with DFS under New York Banking law, which proposed that HBL will wrap up their business practices within 14 days and as compared with initial fine, HBL will be liable to pay up to $225 million now.