The Presidents/Chief Executives

All Banks/DFIs

Dear Sirs / Madam,

ESTABLISHMENT OF FINANCIAL MONITORING UNIT

In order to ensure compliance with Financial Action Task Force (FATF)’s recommendations on anti-money laundering (AML), safeguard the interest of depositors from risks arising out of money laundering and terrorist financing, and to reinforce the measures being taken by the banks / DFIs to strengthen their Know Your Customer (KYC) / AML procedures, it has been decided to set up a separate Financial Monitoring Unit (FMU) in State Bank of Pakistan with immediate effect. The FMU will be headed by a Director and would interalia, receive, analyze and disseminate the suspicious transactions reported by banks/ DFIs. FMU after analysis would pass on suspicious transactions to the relevant law enforcement agencies as and when required.

2. The objectives and scope of work of FMU is enclosed as Annexure-A. The FMU will coordinate with the relevant agencies and stakeholders to ensure achievement of its objectives. The scope of FMU will be further enhanced once the legislation on Anti-Money Laundering is passed.
3. All banks / DFIs are advised to report suspicious transactions to the Director of FMU as required under Prudential Regulation M-5. Failure to report suspicious transactions or any violation of the instructions will attract punitive action under the relevant provisions of the Banking Companies Ordinance, 1962.

Please acknowledge receipt.

Annex - A