US shuts down Pak's Habib Bank for terror financing and other charges

September 08, 2017 20:33

In another jolt to Pakistan, the US has shut down the country's largest lender

Habib Bank's operations here and slapped a fine of $225 million (Rs 1,439 crore) for its failure to comply with laws aimed to combat money laundering, terrorist financing and other illicit financial transactions.

The action against the Karachi-based Habib Bank comes days after US President Donald Trump said Pakistan provided safe havens to terrorists attacking US and Afghan troops.

US Secretary of State Rex Tillerson had also warned Pakistan that it could lose its status as a 'major US ally' and military aid suspended if it continued to back terror groups.

The US Department of Financial Services, a regulator of foreign banks in the country, said the decision follows a 2016 examination that found weaknesses in the bank's risk management and compliance and the bank's failure to undertake extensive remedial actions required by a 2015

consent order.

According to a statement issued by the DFS, the New York branch of Habib Bank has continued to fail to comply with a 2006 agreement that arose out of "significant deficiencies" identified within the bank's compliance with economic sanctions laws and with its anti-money laundering compliance, including the Bank Secrecy Act.

Habib Bank is Pakistan's largest bank, with $1 billion in total revenues in 2016, and $24 billion in total assets. The New York branch of Habib Bank has been licensed by DFS since 1978, the DFS release said.

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