KARACHI: All banks are open to collect money in their donation accounts and there is no restriction on collecting charity, said bankers while the State Bank did not change its stance over donation accounts.

The controversy was widely discussed on social media after a bank owned by UAE-based investors asked its branches not to collect donations for the people of Gaza.

The bank later made it clear that the instructions were “an internal memo”.

“Bank Alfalah would like to address the misunderstanding created by the internal memo that has been circulated in the social media. This misleading impression created that banks have been instructed to stop accepting donation is absolutely incorrect. In Pakistan, operational accounts of embassies are restricted from receiving donations; instead contributions should be directed to legally permissible donation accounts,” said an official response issued by the bank.

“Bank Alfalah remains committed [to] enabling donations from people in Pakistan in accordance with the law to appropriate and authorised accounts that are designated for the purpose of donations,” said the bank.

Most banks said they did not get any fresh instructions over donations from the central bank and people across the country are putting money into the accounts opened for donations.

When contacted, the State Bank referred to article 6 of the Money Laundering laws issued in November 2022.

“SBP REs (Regulated Entities) shall conduct EDD (Enhanced Due Diligence-including obtaining senior management approval) while establishing relationship/ execution of financial transaction with NGOs/ NPOs, Charities and Trusts, when the risks are higher, to ensure that these accounts are used for legitimate purposes and the transactions are commensurate with the stated objectives and purposes,” said the relevant clause of the SBP.

It further said that “all existing relationships of NGOs/ NPOs (non-profit organisations)/ charities/ Trust shall be reviewed and monitored by the SBP to ensure these organisations, their authorised signatories, members of their governing body/ beneficial owners/ trustees are not linked with any DP (Designated Person) or PP (Proliferation Financing), whether under the same name or a different name.

A Meezan Bank official said there is no restriction on collecting donations. He said donations are deposited in the accounts already opened for the purpose. For example, collecting donations for the victims in Gaza are deposited in donation accounts like Al-Khidmat Foundation.

“There is no change in putting money in the donation accounts,” said the official.

Published in Dawn, November 11th, 2023