In order to utilise technological innovations to further safeguard MFBs from money laundering, terrorist financing and other related risks, the central bank has advised them to ensure compliance with these measures.
On June 9, the SBP issued fresh guidelines to curb money laundering and financial terrorism in line with United Nations Security Council Resolutions.
On June 14, the SBP amended a number of regulations, asking banks and development financial institutions not to provide any banking services to proscribed or designated entities and persons as required under Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Regulations.
Frequent measures announced by the SBP indicate that pressure is mounting on the country to check the menace of money laundering and terror financing. Despite being a major victim of terrorism, Pakistan has been facing international pressure to curb terrorist activities and eliminate terror financing.
No Pakistani bank was ever found involved in terror financing, but the involvement of a large currency dealer in a money laundering scandal weakened the country’s fight against terrorism.
In the middle of November 2015, US authorities arrested Altaf Khanani, a Pakistani currency dealer. They accused Mr Khanani’s firm of money laundering and providing illicit funds for organised crime groups, drug trafficking organisations and designated terrorist groups.
The SBP has now asked MFBs to use biometric technology at the branch level for the instant verification of particulars of prospective customers.
“For this purpose, installation of biometric machines at branches should be completed by December 31, 2017,” said the SBP.
They should utilise technology-based solutions – for example, transaction monitoring systems (TMS) capable of producing meaningful alerts based on pre-defined parameters or thresholds – for analysis and possible reporting of suspicious transactions, the SBP said.
MFBs are required to implement the appropriate TMS by June 30, 2018. The TMS may be customised based on the size, nature and complexity of their business environment and the need of the institution, said the SBP.