U.S. fines hit shares of Pakistani banks in New York

 The seal of the US Federal Reserve system can be seen in the Federal Reserve Board building in Washington. February 5, 2026, Photo-AP

U.S. financial regulators have fined the New York branch of the National Bank of Pakistan (NBP) more than 55 million for violating anti-money laundering laws and failing to comply.

Shares of NBP fell 6 percent on Friday due to fines imposed by the Federal Reserve Board and the New York Department of Financial Services (NYDFS).

The U.S. Federal Reserve Board said in a statement Thursday that the NBP's "banking operations have failed to maintain adequate control to comply with an effective risk management program or anti-money laundering laws."

Pakistani authorities said the United States had agreed to the fines through an agreement with regulators and that there was no "intentional misconduct" at the NBP's New York branch.

A statement from NYDFS said the settlement would require the NBP to propose a plan. "Expansion of the policy and procedures of the bank's BSA / AML compliance program, its suspicious activity monitoring and reporting program, and the need for due diligence on the part of its customers."

More than 75% of the NBP is owned by the government of Pakistan.

Concerns about terrorism

Pakistan's military and intelligence agencies have long been accused of maintaining and using links with terrorist groups to advance strategic goals in neighboring India and Afghanistan.

Javid Ahmed, a senior fellow at the Atlantic Council, told Voice of America:

Pakistani authorities deny any involvement in terrorism and claim that the country has been hit hard by terrorist attacks over the past two decades.