As
you are aware, increasing
efforts are being made across the globe to ensure that the
banks are not used as a mean to facilitate
money laundering and other unlawful activities. In
this regard, the central banks the world over are stressing
more on the preventive techniques like “Know Your Customer”
(KYC) and enhanced due diligence by the banks so that the
banks are aware of the source and capacity of their customers
with reference to the activity and turn over in the accounts.
2.
The State Bank of Pakistan has also been actively engaged
in supporting the global efforts and necessary guidelines
have already been put in place through Prudential Regulations
No. XI and XII to safeguard banking sector from the menace
of money laundering and other unlawful activities. The success
of these measures require that the banks have put in place
appropriate procedures to ensure all branches of the banks
strictly follow the requirements of “Know Your Customer”(KYC),
as proper implementation of KYC system is the first line of
defense in the fight against money laundering and other unlawful
activities. SBP, during the course of its inspections, would
particularly check the efficacy of the KYC system put in place
by the banks and its compliance by all the branches and the
staff. Stern
action will be taken against the banks and the relevant staff
member for non-compliance and/or negligence in this area.
3.
Please have the contents of this circular cascaded
down the line for compliance.
It must be ensured that suitable training in this area
is provided by the banks for its employees.
Please
acknowledge receipt.
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