New York: Pakistan’s largest private bank – Habib Bank Limited (HBL) – was ordered to shut down its New York office over possible terror funding and money laundering allegations.
The New York Department of Financial Services (DFS) passed the order on Thursday, as per sources.
The banking regulator further announced a fine of USD 225 million on the bank and its New York branch for failure to comply with New York laws and regulations designed illicit financial transactions. Initially, the DFS proposed a penalty of $629.6 million.
DFS investigation found that the bank facilitated billions of dollars in transactions with a Saudi private bank, the Al Rajhi Bank, with reported links to al Qaeda, without adequate anti-money laundering and counter-terrorist financing controls.
Habib has operated in the United States since 1978, and in 2006 was ordered to tighten its oversight of potentially illegal transactions but failed to comply.