Suspicious transactions

Banks/DFIs directed to provide information to LEAs

KARACHI: The State Bank of Pakistan (SBP) on Tuesday directed banks and Development Finance Institutions (DFIs) to provide timely information related to suspicious transactions to the law enforcement agencies (LEAs).

“The central bank advice to banks/DFIs to provide timely information to LEAs would reduce money-laundering cases in the country,” said Syed Irfan Ali, director, Banking Policy and Regulation Department of the SBP.

The central bank has incorporated a directive in Regulation M-3 of Prudential Regulations for Corporate/Commercial Banking.

The SBP said: “The banks/ DFIs should provide timely information related to suspicious transactions to domestic law enforcement agencies (LEAs), sought in terms of legal powers available to them under their respective laws in order to support investigations/ prosecutions.”

Irfan Ali said that the initiative would safeguard the country against money-laundering activities.

The re-enforcement for such directive would help the country to comply with international standards in preventing illegal transactions, he said.

International Monetary Fund (IMF) in a report issued last year expressed concerns over rising risks of money laundering and terror financing in Pakistan.

The Fund said that several steps have been taken by the government to strengthen its anti-money laundering and combating of financing of terrorism, but the scope of preventive measures needs to be expanded and enforcement should be more stringent.

Syed Irfan Ali said that there was no pressure from the international donor agencies to take further measures against money laundering. “The directives for banks and DFIs were already in place and the latest advice was to re-enforce it,” he said.

Earlier, in the Regulation M-3 of the prudential Regulations for Corporate / Commercial Banking envisaged that banks and DFIs were advised that they should share suspicious information, if necessary, with SBP and LEAs.

The SBP also directed that the banks/DFIs should retain the records for a minimum period of five years of both domestic and international transactions. The Regulations said: “The records so maintained must be sufficient to permit reconstruction of individual transactions (including the amounts and types of currency involved, if any) so as to provide, if necessary, to SBP or law enforcement agencies for investigation or as an evidence in legal proceedings.”

Banks / DFIs shall, however, retain those records for longer period where transactions relate to litigation or are required by the Court of law or by any other competent authority, the regulations further said.

The latest induction of the paragraph to the regulations made it mandatory for the banks and DFIs to supply information related to suspicious transactions to LEAs, said a banker.

Source The News