UAE’s Central Bank starts investigation against HBL’s money laundering violation
Pakistani authorities have found ‘significant irregularities’ in the bank’s dealings in UAE
The Central Bank of United Arab Emirate (CBUAE) said Thursday it is investigating Pakistan’s Habib Bank Limited (HBL) to determine the violation of Money laundering and terrorism-financing, Arabian Business website said.
In a statement to Reuters, the CBUAE said it was “in close contact” with Pakistani bank regulators over reports of irregularities of a Pakistani bank in UAE. The move comes as Pakistan faces investigations from a Paris unit of the Financial Action Task Force for failure to comply with global regulations on terrorist financing and money laundering.
The statement said that the UAE “will take appropriate regulatory action once we have verified the findings reported in the media to confirm if there was any violation to UAE’s anti-money laundering and combat of financing of terrorism laws and procedures.”
According to Reuters, the CBUAE has confirmed that the statement refers to Habib Bank.
Arabian Business has reached out to the CBUAE for comment.
Habib Bank – which is majority owned by the Pakistani government and the Aga Khan Fund for Economic Development – reported assets of $20.1 billion at the end of September 2019.
Earlier this week, it was reported that a report from the State Bank of Pakistan found that HBL has displayed “significant irregularities” in dealing with politically exposed clients and screening some transactions.
The report, for example, found that some of the bank’s employees had helped customers mask transactions by issuing pay orders in their own names.
Additionally, inadequate risk profiling and monitoring steps were found to be reflective of “an ineffective compliance function and compliance culture.”
In 2017, the New York State Department of Financial Services said it would fine HBL as much as $630 million for “grave” failures to comply with anti-money laundering and sanctions rules.
In the end, the bank agreed to pay $225 million to settle enforcement action.
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