Banks told to implement National Savings Schemes (AML & CFT) Rules

KARACHI: The State Bank of Pakistan (SBP) has asked banks to implement National Savings Schemes (AML & CFT) Rules 2019.

According to the SBP, commercial banks are performing functions of sale, encashment, and profit payment, etc, of various National Savings Schemes (NSS) such as Prize Bonds, Special Saving Certificates (SSC) and Defense Saving Certificates (DSC).

In this connection National Savings Schemes (AML & CFT) Rules, 2019 have been promulgated by the Ministry of Finance, Government of Pakistan vide Notification No. F.No.16(1)GS-I/2019-98 dated January 23, 2020.

As per sub-rule (3) of Rule 1, these rules shall apply to all offices and persons responsible for the issuance, management, marketing, registration, replacement, sale and discharge of the instruments issued by and the accounts opened at and maintained with the National Savings Centers, Pakistan Post and any other office designated as offices of issue.

In light of this rule, the SBP said that being the office of issue, the said Rules are also applicable on the commercial banks. Therefore, SBP has advised banks to ensure implementation of and compliance with the enclosed National Savings Schemes (AML & CFT) Rules 2019 and arrange for necessary dissemination to the concerned officials and branches.

For the last few years, the government of Pakistan and State Bank of Pakistan are making serious efforts to deal with Money Laundering and Terrorist Financing (ML/TF) and as part of these efforts a number of new rules/ laws were implemented to delist Pakistan from the grey list of Financial Action Task Force (FATF). Sources said that as per NSS AML & CFT Rules, 2019 the controlling office, including National Savings, SBP Banking Services Corporation (SBPBSC), Pakistan Post Office Department (PPOD) or head office of any office of issue like banks, will make use of technology and upgrade their systems and procedures in accordance with the nature of risks of money laundering and financing of terrorism for prevention of such activities and offences establish criteria for management of alerts for such risks.

In addition, the controlling office shall take appropriate steps to identify, assess, and understand their ML/TF risks for customers, countries or geographic areas and products, services, transactions or delivery channels.

All controlling office will be required to develop policies, controls and procedures, which are approved by senior management, to enable them to manage and mitigate the ML/TF risks.

According to Rules 2019, the office of issue will also ensure compliance with the Guidelines for Implementation of UNSC Sanctions issued by the Ministry of Foreign Affairs under the

UNSC (Freezing and Seizure) Order, 2019 and the Guidelines on Actions to be taken by Competent Authorities for Implementation of United Nations Security Council Resolution No. 1373 issued by the National Counter Terrorism Authority (NACTA).

Copyright Business Recorder, 2020