The United Arab Emirates' central bank is investigating Pakistan's largest bank to ascertain if it violated anti-money- laundering and terrorism-financing laws, the regulator said on Wednesday.

The inquiry comes as Pakistan is under examination by a Paris unit of the Financial Action Task Force, a global financial watchdog, for not adequately complying with global regulations on money laundering and terrorism financing.

The FATF will decide this week whether to put Pakistan on a list of countries on non-compliant with global financial regulations, which would carry significant sanctions.

The Central Bank of UAE (CBAUE) said in a statement on Wednesday that it was in "close contact" with Pakistan's banking regulator to verify reported irregularities of a Pakistani bank in UAE.

A spokeswoman of the CBAUE confirmed to Reuters that the statement referred to Habib Bank Ltd (HBL), Pakistan's largest bank.

The bank, which is largely owned by the Aga Khan Fund for Economic Development and Pakistan government, had total assets of 3.1 trillion Pakistani rupees ($20.1 billion) at the end of September 2019.

The statement by the UAE banking regulator added it "will take appropriate regulatory action once we have verified the findings reported in the media to confirm if there was any violation to UAE’s Anti-Money Laundering and Combat of Financing of Terrorism (AML/CFT) laws and procedures."

In a report last week, Bloomberg said that Pakistan's banking regulator in 2018 had found irregularities in HBL's UAE operations and dealings with politically exposed clients.

HBL responded to that report by admitting that a "few weaknesses" were identified in 2017 in its UAE operations that contravened its processes and standards.

"We have transformed our control and compliance process to ensure that they are in line with international standards," an HBL statement said.

The State Bank of Pakistan, the country's banking regulator, did not immediately respond to queries by Reuters on its communication with UAE's regulator.

HBL also faced action in the United States in 2017 when the New York State Department of Financial Services said it was seeking to fine HBL up to $630 million for "grave" compliance failures on anti-money laundering and sanctions rules. The bank agreed to pay $225 million to settle enforcement action.

In a filing to Pakistan Stock Exchange on Monday the bank said it would complete a "voluntary closure" of its U.S. operations in coordination with the New York State banking regulator on or before March 31.