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Pakistan’s biggest bank banned from operating in New York gives $225mn as fine

New York

The US Department of Financial Services ordered Pakistan’s biggest private bank to stop its operations in New York and vacate its building, following information regarding the bank’s involvement in money laundering, and its association with Dubai based Al Rajhi bank that transacts with terror groups and illegal goods dealers. The US operator also fined Habib bank $225mn, against a proposed sum of $629mn dollars.

All transactions of the bank pertaining to Al Rajhi were sealed. The Dubai-based firm Al Rajhi reportedly has links with Al Qaeda, one of the world’s most dangerous terror groups.

The US finance operator DFS (Department of financial services), that usually targets non-US banks, in an investigation found out that the bank has over 13000 transactions with Al Rajhi, that facilitates money not only to terror groups like Al Qaeda but drug dealers across Pakistan and Dubai.

Habib Bank Ltd. was licensed by the US government to operate in New York in the year 1978.

There have been problems with the bank’s functioning since long back, and in 2006, it was ordered by the US operator to check its policies and correct deficiencies that opened up advances for terror groups. However, the bank ignored compliance problems on large transactions that promoted terrorism and illicit illegal trade.

HBL facilitated transactions worth billions of dollars to Dubai-based Al Rajhi bank that reportedly has links with Al Qaeda.

This became a matter of grave concern for the state’s security. Despite reported notices from the DFS regarding issues with its transaction policies, the bank failed to correct them and continued with the malfunctions.

“DFS will not tolerate inadequate risk and financing functions that open the door to terrorist activities and pose grave threat to the people of the state and the financial system as a whole,” DFS Superintendent Maria Vullo reportedly said in a press statement.

The US functionary has given the bank, which has its headquarters in Karachi, Pakistan, limited time to wound up its business in the States and duly pay the imposed fine.

Meanwhile, US president Donald Trump in a recent speech expressed concerns regarding Pakistan’s expanding military base, and said that its soil served as a safe haven for terrorism. Referring to the Habib crisis, President Trump reportedly accused Pakistan of catering to militant’s needs despite regular warnings from experts and warned the government of consequences if action was not taken soon.