The Presidents/ Chief Executives Officers,
All Microfinance Banks (MFBs)

Dear Sirs,

Measures to be taken by MFBs regarding AML/CFT Regime

In order to utilize technological innovations to further safeguard MFBs from Money Laundering/Terrorist Financing and other related risks, MFBs are advised to ensure compliance of the following;

1. Make use of biometric technology at the branch level for instant verification of particulars of prospective customers. For this purpose, installation of bio-metric machines at branches should be completed by December 31, 2017.
2. Utilize technology based solution e.g. Transaction Monitoring Systems (TMS) capable of producing meaningful alerts based on pre-defined parameters/thresholds, for analysis and possible reporting of suspicious transactions. In this regard, they are required to implement appropriate TMS by June 30, 2018. The TMS may be customized based on the size, nature and complexity of their business environment and need of the institution.
3. Promote Financial Inclusion products with enhanced financial literacy and awareness on risk based KYC requirement and consumer protection. MFBs also need to enhance their capacity, skills and products required to serve relevant market segment to achieve the Financial Inclusion objective.

2. MFBs shall submit progress in respect of the above instructions (i) & (ii) on a quarterly basis at [email protected] and ensure meticulous compliance with SBP instructions failing which shall attract punitive action under relevant provisions of the Microfinance Institutions Ordinance, 2001.

Please acknowledge receipt.