NBP Shuts Down its Branches in Paris and New York

The National Bank of Pakistan (NBP) has shut down its two major branches in New York and Paris as per its plans to reduce its low-yielding branches in different foreign countries, according to its annual report. The government-owned bank has closed down its branches in Paris (France) after nearly 50 years of its operations, as it was incurring unbearable losses to the bank. Accounts of Pakistan’s Embassy and overseas Pakistanis had been moved to a local French bank and all legal and regulatory formalities had been concluded by the bank’s management. Similarly, the management of the NBP concluded the closure of the New York branch, followed by full compliance with regulatory directives, ensuring a structured exit. Located on Wall Street, the NBP used to be the only Pakistani bank with a branch in New York. The bank was under examination by the local authority in 201,5, which pointed out serious deficiencies in its system, including non-compliance of regulations. Different managements made various attempts to address the concerns of the local authorities, including the change of staff, however, the concerns of local authorities had not been addressed, particularly the compliance of anti-money laundering. In 2022, US authorities–the Federal Reserve Bank of the United States and the New York State Department of Financial Services (NYDFS)– slapped a heavy penalty of $55 million (Rs. 9 billion) on NBP’s New York branch. The consent orders focused on historical compliance program weaknesses and delays in making compliance enhancements despite no findings of improper transactions or willful misconduct. The then management claimed that the bank had substantially enhanced its compliance program which the US regulators also recognized and acknowledged. In December 2024, the Federal Reserve Board of the United States terminated its two key enforcement actions imposed earlier. The branch’s assets stood at more than $110 million till 2024 and its liabilities too. in line with the direction of the board of directors, the bank voluntarily surrendered its New York Branch’s license and shut down its operations in New York after six decades. Besides, the public sector bank is working to complete the regulatory requirements to further shut down three additional branches, including Kazakhstan (Almaty), Kyrgyzstan (Bishkek), and Azerbaijan (Baku). The overseas operations of NBP are going to be reduced to 16 locations from 23 different destinations reported earlier.