PHOTO: FATF

ISLAMABAD: In line with the FATF recommendations, the federal government has prepared an AML/CFT Rules 2019 draft for the prevention of money laundering and terrorism financing through National Savings Schemes (NSS).



It has sought recommendations from all NSS stakeholders within seven days. In case they fail to submit proposals within the stipulated time, the gazette notification would be issued without entertaining their suggestions.

According to the draft, the rules would apply to the NSS centres, Pakistan Post and other financial institutions, which open and manage accounts of savings schemes and prize bonds.



The rules would also apply to the market and registration of NSS as well as companies and executives involved in this business.



A formal tender has been issued for commercial banks to make compulsory third-party certification and profiling of NSS investors/account holders.



The State Bank of Pakistan (SBP) has sought expressions of interest (EoIs) from commercial banks for preparing risk profiles of over four million NSS accountholders and investors.



The bank, which wins the bid, would undergo screening in line with the Financial Action Task Force list within six months while the risk-profiling process would be completed within a year.



The bank would be entitled to sign a contract for an initial period of three years with the possibility of renewal upon mutual consent.

As per the documents available with The Express Tribune, interested banks might submit their EoIs by December 30. The bids would be opened at the committee room of the Central Directorate of National Savings.



The bank with the lowest bid would be given the risk-profiling contract of four million NSS accountholders/investors.



The bank, which wins the bid, would devise a mechanism for notifying consumers with dubious and incomplete documents while suspicious profiles would be verified from NADRA.



Under the third party arrangement, the NSS accountholders would also have to go through all the steps that the banks have adopted for the verification of their customers. The same mechanism would be applied to new NSS accountholders.



According to the National Savings officials, the precautionary steps are being taken to ensure the prevention of money laundering and terrorism financing. “The measures would allow the department to be fully aware of the profiles of their customers and screen negative elements using this scheme for terror financing and money laundering.



“After the profiles are screened, the National Savings would be able to obtain details of any suspicious account on their fingertips.”

As per the SBP’s eligibility criteria, commercial banks interested in procuring third party services for preparation of risk profiles of NSS accountholders/investors must provide documentary proof of having ‘AA plus’ rating with a countrywide network of at least 500 branches.



It states that banks must also have an effective and comprehensive core banking system and fraud monitoring system, adding that they must also have adequate delivery channels, ATMs, internet banking, branchless banking agents and a stable financial position.



In addition, they must meet the minimum capital requirement as laid under the SBP regulations and must also have complete capabilities to comply with the rules against money laundering and terror financing.