Cash transactions at BB locations: Biometric verification of accountholders a must: SBP

KARACHI: The State Bank of Pakistan (SBP) has made Biometric Verification (BV) of accountholders mandatory for all cash transactions at Branchless Banking (BB) agents’ locations to mitigate the Money Laundering (ML) and Terrorist Financing (TF) risks.

The SBP has already issued a detailed “Branchless Banking (BB) Regulations” in December 30, 2019 and now fresh directives have been issued to banks and MFBs offering BB services aimed to further strengthen the controls against ML and TF risks

The SBP has directed the banks and MFBs to perform Biometric Verification of account or wallet holders for all types of “cash-in” and “cash-out” transactions at BB agents’ locations effective from January 31, 2024. This is in addition to the BV of transactions and customer types already specified in the previous directives.

Banks and MFBs have been asked to prioritize deployment of new BV devices, needed for the implementation of above instructions, at agents’ locations in high TF risk areas followed by deployment in other areas across the country. Offering BB services institutions will take all necessary measures and controls including upgradation of the related hardware and software to comply with these instructions.

The SBP has also banks and MFBs to strengthen the Automated Transaction Monitoring Systems (ATMS) to ensure that all BB transactions, including those conducted at agents’ locations, are captured and the system has capability to flag suspicious, unusual or out-of-pattern transactions and accounts with unusually high number of transactions, for further assessment and reporting of Suspicious Transaction Reports (STRs) under AML Act 2010; and reconstruct individual BB transactions so as to facilitate gathering of necessary evidence needed in any criminal investigation under the relevant laws.

As per fresh guidelines, banks and MFBs will also ensure adequate and meaningful coverage of BB operations in the Internal Risk Assessment Reports (IRARs) as required under the SBP’s Anti-Money Laundering, Combating the Financing of Terrorism & Countering Proliferation Financing (AML/CFT/CPF) Regulations.

Copyright Business Recorder, 2023