KARACHI: The State Bank of Pakistan (SBP) has reiterated its doubt over the possible use of the banking sector for money laundering, terrorist financing and illegal transfer of funds.

“It is reiterated that authorised dealers must ensure strict observance of all applicable instructions, including regulations or guidelines issued by the SBP while opening and maintaining foreign currency accounts,” the State Bank said in a circular issued on Tuesday.

In pursuance of the Anti-Money Laundering Act, 2010, reporting entities including authorised dealers are under obligation to conduct Custo­mer Due Diligence (CDD) and maintain record of transactions, account files and documents in accordance with the regulations issued by the SBP.

The ongoing CDD is an essential part of an effective anti-money laundering (AML) and combating the financing of terrorism (CFT) regime and applies to all customers to whom the authorised dealers are offering any type of service.

This includes monitoring and scrutiny of transactions undertaken throughout the course of business relationship between the bank and the customer to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer, purpose of account, business and risk profile, and the source of funds.

Authorised dealers were advised to ensure that consolidated data or record of transactions routed through foreign currency accounts of individuals or entities is maintained by them at their head offices on a monthly basis.

In addition to the data or record already being maintained, data of those personal foreign currency accounts maintained by individuals where aggregate amount exceeding $10,000 in other foreign currencies is deposited in, withdrawn from or remitted out from the account during the month should be maintained as per the prescribed format.

Also, the data of foreign currency accounts maintained by entities where exceeding $25,000 in other foreign currencies is deposited in, withdrawn from or remitted out from the account during the month is also required to maintain.

“The above data/record shall be maintained by the authorised dealers and produced for on-site inspection/off-site monitoring by the SBP as and when required,” the central bank said.

Published in Dawn, February 24th, 2016

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Rushed legislation
Updated 06 Nov, 2024

Rushed legislation

For all its stress on "supremacy of parliament", the ruling coalition has wasted no opportunity to reiterate where its allegiances truly lie.
Jail reform policy
06 Nov, 2024

Jail reform policy

THE state is making a fresh attempt to improve conditions in Pakistan’s penitentiaries by developing a national...
BISP overhaul
06 Nov, 2024

BISP overhaul

IT has emerged that the spouses of over 28,500 Sindh government employees have been illicitly benefiting from BISP....
Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....