Market is waiting for the next direction. FATF announcement due around the 3rd week of this month will provide further clues. PSX will remain choppy due to political uncertainty and outflow of foreign funds. Banks have a new task in hand to provide 5% funding for government housing schemes that could further drain out liquidity already faced with severe crunch. For banks it’s a mandatory target. The deadline date to finance the Naya Housing Programme and construction activities that will become effective for the new year is December 31, 2021, which is against incentive of reduction in its Cash Reserves Requirements (CRR) that will be adjusted on quarterly basis or banks will be penalized.

Whereas the outcome of the FATF meeting is crucial, which is looming over our heads. Business Recorder has reported that Pakistan has hired a US lobbying firm Linden Strategies to get US governments support so that Pakistan is removed from FATF’s ‘Grey List’. The meeting is scheduled for October 21-23 in Paris. Though chances of being upgraded are low due to unfair treatment, if elevated that would mean a lot as it will help the country in engaging itself at a higher level.

FATF and the global financial administrators will have to recognise Pakistan's effort that despite difficulties it has made tireless efforts to meet their recommendations by taking action on all 27 points, though some more hard work is required to meet few of their pending recommendations. FATF members are also required to do away with their hypocritical and double standard approach, as leaked Suspicious Activity Report (SARs) documents have clearly exposed them by revealing that despite claims of strong control over its system, practices in Advanced/Emerging economies are more in violation of rules by not complying with the requirements/regulation.

Recent leaked SARs reports suggesting that banks internationally helped to launder nearly $ 2 Trillion that was carried out by some of the world’s largest banks involving money launderers is a good proof that Pakistan’s involvement in Anti Money Laundering (AML) and Foreign Exchange Regulation laws was unintentional and is tiny in size/volume and the cause of its suffering is purely because of weak system of internal controls. If the FED, ECB and others do not take similar action against banks identified involved in wrongdoing, it will not be wrong to say that it was unfair to take action against Pakistan's Habib Bank in September 2017.

However, in recent times despite all odds, FATF should accept the fact and recognize the efforts that Pakistan's central bank and the banking industry has made by training its personnel/staff. For the sake of customer diligence, it has adopted an appropriate risk based plan of action to monitor and identify all suspicious transactions focusing on customer identification. Let us hope that this time, politics would not dominate and the world body realizes that Pakistan, which is in the midst of an ongoing tribulation for long has done more than enough and rightly deserved to be elevated.

(The writer is former Country Treasurer of Chase Manhattan Bank)

Copyright Business Recorder, 2020

Asad Rizvi

(The writer is former Country Treasurer of Chase Manhattan Bank. The views expressed in this article are not necessarily those of the newspaper)

He tweets @asadcmka

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