AFTER four long years, Pakistan has earned freedom from the shackles of the Financial Action Task Force (FATF). The real challenge now is to keep the current status unchanged. The major responsibility rests with banks in Pakistan when it comes to following the anti-money-laundering and counter-financing of terrorism (AML/CFT) guidelines.
To fend off money-laundering, at the time of opening a bank account, the Know-Your-Customer (KYC) form is mandatory regarding the evidence of the source of income. Despite using modern software systems, banks fail to prevent money-laundering.
The flaws that had landed Pakistan in hot soup deserve serious consideration by the banking industry. As fintech platforms flourish, banks need to be more vigilant to avoid dirty money in their institutions.
Often, banks demand the production of the original identity card and there are times when they keep a copy of it before completing a transaction.
The funny thing is that no authentication is done in such cases with the National Database and Registration Authority (Nadra) portal.
If someone is, say, an absconder, the CNIC is blocked by courts or law enforcement agencies, but the bank will still complete the transaction simply on the basis of the original card.
Therefore, the banks should complete such transactions only on the basis of biometrics. There is a need to be cautious rather than frivolous in these tricky times.
Taha Soomro
Karachi
Published in Dawn, November 7th, 2022
