The State Bank of Pakistan (SBP) fined United Bank Limited (UBL), The Bank of Punjab (BoP), JS Bank Limited (JSBL) and Allied Bank Limited (ABL) for violating banking laws. These four financial institutions were fined a total of Rs83.157 million in the first quarter (July-September) of the current fiscal year for violating the central bank’s directives regarding foreign exchange, customer due diligence and general banking operations. According to the details of the significant enforcement action that the SBP posted on its website on Tuesday, UBL received the largest fine, amounting to Rs26.500 million, followed by BoP (Rs21.569 million), JS Bank (Rs18.510 million) and ABL (Rs16.578 million). The banks were penalised for breaking rules pertaining to know your customer and customer due diligence, foreign exchange trading and general banking activities. In addition to penal action, these banks have been advised by the SBP to strengthen their systems and controls to prevent future regulatory infractions. The penal actions are based on deficiencies in the compliance of regulatory instructions and do not constitute a comment on the financial soundness of these banks, according to the SBP. Last year, the government launched investigations into banks that it claimed were manipulating currencies to increase their gains and profits. However, neither the findings of the report nor the penalty or fiscal action taken against the banks were made public. Short forex liquidity, short net open forex positions held by the banks and greater currency volatility and uncertainty were cited as the main reasons why the banks’ spreads were higher. Despite the economic troubles that the country faced in 2022, the banking industry remained resilient which witnessed a strong growth of 19.1% in its assets. This expansion was mainly driven by investments while advances decelerated, said the SBP’s annual flagship publication, the Financial Stability Review for 2022. The contained delinquencies and higher profitability supported banks’ solvency as the capital adequacy ratio stood at 17.0% – well above the minimum regulatory requirement of 11.5%. The Islamic banking segment also observed robust growth of 29.6% during 2022.