RIZWAN BHATTI

KARACHI: The State Bank of Pakistan (SBP) has asked Exchange Companies (ECs) to strictly compliance with Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) regulations to avoid any action by the Financial Action Task Force (FATF).

Sources told Business Recorder on Thursday that the SBP officials have convened a meeting of all exchange companies of “A” and “B” category earlier this week to discuss issues relating to AML and CFT in the line with FATF guidelines. FATF-an anti-money laundering monitoring group has already put Pakistan name on the Grey list for non-compliant with terrorist financing regulations.

The meeting was held at the SBP head office Karachi and chaired by Syed Irfan Ali Director Banking Policy and Regulations and attended by CEOs and heads of compliance departments of companies.

During the meeting, exchange companies were asked to upgrade their internal systems in the line with SBP guidelines to curb the money laundering and terrorist financing. “The internal system of companies should be secured, credible and strengthen to identify the suspicious transactions being made by any person, who is enrolled in fourth schedule”, SBP officials said and advised exchange companies to report suspicious transactions to SBP immediately.

ECs were also directed to strictly compliance with AML/CFT regulations issued by SBP time to time. They were asked to enhance the Know Your Customer (KYC) and Customer Due Diligence (CDD) and ensure that transaction by banned group or organization or person should not be taken place at any cost.

ECs were also advised to arrange seminars and training workshops for staff to capable them to deal with money laundering challenges.

During the meeting, representatives of exchange companies supported the SBP’s initiatives and said that companies are already committed to compliance of SBP’s rules and regulation for the larger interest of the country.

They informed that ECs are not involved in Hundi/Hawala business and most of companies already have state of the art system to curb the terrorist financing, besides compiling record of all customers/transactions to ensure transparent reporting.

Sources said that during the meeting the SBP also warned of surprise visits of exchange to check either companies are following the SBP’s directives or not.

It may be mentioned here that Pakistan’s foreign exchange reserves are gradually declining and reached $17.8 billion mark end of last week. Pakistan may face difficulties to borrow money from international debt markets if FATF put its name in black list.