NEW YORK, Nov 13: Forced by the strict regulations and guidelines recently imposed by the US Federal Reserve Bank, all Pakistani banks operating in the United States have stopped accepting cash from the expatriates sending money home.
However, despite the strict regulations which force the expatriates to secure bank cheques and money orders for such transactions, the remittances to Pakistan have significantly improved as compared to last year.
The Vice-President of Habib Bank in New York, Faiq Sadik, said: “All Pakistanis banks have seen an increase in remittances to Pakistani.”
Each year expatriates from all over the world send some $30 billion home spawning a huge money transfer industry here.
Nevertheless, the new rules have impacted the independent money changers and money transmitters in the United States,
The new regulations subjected money transmitters, currency exchanges and cheque-cashing stores to the same anti-laundering rules that banks have followed for 16 years. That meant they must now report suspicious cash transactions above a threshold value: $5,000 for banks and, now, $3,000 for money services businesses like transmitters.
Setting thresholds was intended to catch drug traffickers or criminal groups that have a lot of money to disguise or move quickly. Terrorist groups, investigators say, are more likely to move small amounts of money intermittently, the New York Times said in a report on Wednesday.
The paper said that the government had now imposed strict new controls on companies that handle nearly all immigrant payments, transforming a business that thrived on its lack of paperwork and catered to people who could not, or would not, do business with banks.
Some of the new federal rules were put in place this summer and others are expected to be issued in the next few months. They have already caused money transmitters to automate their businesses, report even small cash transfers to federal law enforcement authorities and demand proof of their customers’ identities.
Anyone who now sends money overseas must be checked against government lists of suspected money launderers and terrorists, a task that also requires money transmitters “many of them storefront operations” to undergo training to spot suspicious movements of money, the paper said.
