US banking regulators shut down Pakistan's Habib Bank amid money laundering concerns

Pakistans Habib Bank

US banking regulators ordered Pakistan's Habib Bank to shutter its New York office after nearly 40 years, for repeatedly failing to heed concerns over possible terrorist financing and money laundering. 

New York banking officials have said that Habib, Pakistan's largest private bank, facilitated billions of dollars of transactions with Saudi private bank, Al Rajhi Bank, which reportedly has links to al Qaeda, and failed to do enough to ensure that the funds were not laundered or used for terrorism.

The state's Department of Financial Services, which regulates foreign banks, also slapped a 225 million Dollars fine on the bank, although that is much smaller than the 629.6 million Dollars penalty initially proposed. 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.

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