Pakistan’s Habib Bank has announced plans to wind up its New York operations after the local banking regulator sought a fine of up to $630m from the bank for deficiencies in adhering to state and federal laws related to anti-money laundering.
The New York Department of Financial Services (DFS) accused the bank of 53 compliance failures and said that the breaches are “serious, persistent and apparently affect the entire Habib banking enterprise”.
The bank said that it will contest DFS’ proposed penalty that it termed “unjustified, capricious, unreasonable”.
“Despite HBL’s sincere and extensive remediation measures, DFS is still not appreciating or recognising the significant progress that HBL has made at its branch in New York and HBL has received a notice from DFS in terms of which DFS seeks to impose an outrageous civil monetary penalty of up to $629625000,” the Pakistani lender said in a filing with the stock exchange.
HBL said that the move to close its New York business will not affect its operations outside of the US.