The State Bank of Pakistan (SBP) has amended Prudential Regulation No 17 for Microfinance Banks (MFBs) with immediate effect to introduce minimum requirements to maintain records of transactions and identification data in a systematic manner.
According to a Circular (MFD Circular No 1) issued on Saturday, MFBs shall keep record on the identification data obtained through the Customer Due Diligence (CDD) process, account files and business correspondence for at least five years following the termination of the business relationship.
Moreover, MFBs shall also maintain all necessary records on transactions, both domestic and International, for at least five years following the completion of the transaction. Such record must be sufficient for reconstruction of individual transactions so as to provide, if necessary, evidence for investigation or prosecution of criminal activity, the Circular said and added that examples of the necessary components of transaction record may include: customer's name (beneficiary's name), address, nature and date of transaction, type and amount of transaction, currency involved, type and identification of any account involved in the transaction.
It may be mentioned that the Prudential Regulations for MFBs were previously silent on the record retention requirements. Therefore, the PR 17 of MFBs has been strengthened to include clear instructions on the minimum period for retention of 'identification record' and 'transaction record' in line with national and international practices, as a step towards strengthening Anti-Money Laundering/Combating Financing Terrorism regulations for MFBs. The Circular said MFBs shall, however, retain records for longer period, if required by any other law or where transactions and/or relationship relate to any investigation, litigation or required by the Court of law or by any other competent authority.-PR