SBP advises banks, MFBs to strengthen terrorist financing controls

October 26, 2023 (MLN): To further strengthen the controls against Money Laundering (ML)/ Terrorist Financing (TF) risks, the State Bank of Pakistan (SBP) has advised banks and MFBs offering BB services to adopt specific measures, according to a circular released today by the Banking Policy & Regulations Department.

The central bank has asked these entities 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 above referred Circular.

Banks and MFBs are further advised to prioritize the deployment of new BV devices, needed for the implementation of the above instructions, at agents’ locations in high TF-risk areas followed by deployment in other areas across the country.

“Take all necessary measures and controls including upgradation of the related hardware and software to comply with the above instructions,” the circular reads.

The SBP has further urged to strengthen the Automated Transaction Monitoring Systems (ATMS) to ensure that all BB transactions are captured and the system has the capability to flag suspicious or unusual transactions and accounts with unusually high numbers of transactions.

To enhance the assessment and reporting of Suspicious Transaction Reports (STRs) under the AML Act 2010, reconstruct individual BB transactions.

This facilitates the gathering of necessary evidence required in any criminal investigation under the relevant laws.

The entities also need 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.

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