To further strengthen the controls against money laundering (ML)/ terrorist financing (TF) risks, The State Bank of Pakistan (SBP) has advised banks and microfinance banks (MFBs) offering branchless banking (BB) services (Authorized Financial Institutions) to implement a number of new measures.
Through a circular issued by the central bank’s Banking Policy and Regulations Department (BPRD) on Wednesday, SBP has asked Authorized Financial Institutions to perform biometric verification (BV) of account/ wallet holders for all types of ‘cash-in’ and ‘cash-out’ transactions at BB agents’ locations effective from January 31, 2024. This is in addition to the BV of transactions and customer types already specified in the BPRD Circular No. 10 of December 30, 2019.
The central bank has also asked to prioritize deployment of new BV devices, needed for the implementation of above instructions, at agents’ locations in high TF risk areas followed by deployment in other areas across the country.
Moreover, the central bank has asked to take all necessary measures and controls including upgradation of the related hardware and software to comply with the above instructions.
Authorized Financial Institutions have also been directed to strengthen their automated transaction monitoring systems (ATMS) to ensure that all BB transactions, including those conducted at agents’ locations, are captured. Moreover, it has directed that the system should have the capability to flag suspicious/ unusual/ out-of-pattern transactions and accounts with unusually high number of transactions, for further assessment and reporting of Suspicious Transaction Reports (STRs) under AML Act 2010; and reconstruct individual BB transactions so as to facilitate gathering of necessary evidence needed in any criminal investigation under the relevant laws.
The central bank has also directed to ensure adequate and meaningful coverage of BB operations in the Internal Risk Assessment Reports (IRARs) as required under the SBP’s AML/ CFT/ CPF Regulations.
Source: Pro Pakistani