HBL says it will move quickly to meet US requirements

Statement comes after US regulators examine bank’s New York branch

KARACHI: Habib Bank Limited (HBL) said on Friday it operates a branch in New York, which is licensed by the New York State Department of Financial Services (NYSDFS) and which is subject to oversight and supervision by the Federal Reserve Bank of New York (FRBNY).

The New York branch of HBL had been operating under a “written agreement” with the NYSDFS and the FRBNY since 2006.

During a recent examination, according to a statement issued by the bank, the US regulators found deficiencies in risk management and BSA/AML compliance programme at the New York branch and, subsequently, escalated the enforcement actions from the “written agreement” to a “consent order” in the case of NYSDFS and a “cease and desist order” in the case of FRBNY.

These orders impose certain additional requirements to remediate on the branch and provide mechanisms for enforcement if the remediation is not met.

The bank says its New York branch will continue to maintain its US licence and will continue to provide branch services as usual. The orders limit the branch’s growth of its US dollar clearing business, but the branch is allowed to continue to conduct its current dollar clearing business.

It cannot accept new foreign correspondent accounts or new customer accounts in New York for US dollar clearing without prior approval of the regulator. It cannot increase its US dollar clearing business both in terms of number of transactions or the aggregate amount without prior permission of the US regulators.

HBL says it takes its regulatory responsibilities very seriously and has been taking actions in advance of even entering these orders to enhance its compliance programme, including engaging outside compliance consultants to review its current programme.

“We believe that these measures will put us in a position to move quickly on the requirements in the orders,” it says.

Published in The Express Tribune, December 19^th, 2015.

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