Banks directed to provideanti-terrorist affidavit for staff

KARACHI: The State Bank of Pakistan (SBP) on Monday directed all banks and development financial institutions (DFIs) to provide an affidavit stating that anyone of their employees is not affiliated to a terrorist organisation.

The SBP said considering the potential risk arising from money laundering, terrorism financing and proliferation financing, it is imperative that an individual linked to any criminal activities or affiliated to any terrorist organisations should not become part of banks/DFIs.

“Accordingly, any sponsor shareholders/beneficial owners, directors, presidents and key executives (persons subject to fit and proper test) shall become disqualified if they are designated/proscribed or associated directly or indirectly with designated/proscribed entities/persons under United Nations Security Council Resolution or Anti-Terrorism Act 1997,” the SBP said in a statement addressing banks/DFIs.

Pakistan is in a watch list of the Financial Action Task Force for its non-compliance with the international standards of anti-money laundering and counter-terrorist financing. The country has a certain time to remove the loopholes in its laws to avert being blacklisted by the global financial system watchdog from the existing grey list.

All financial institutions were directed to submit revised fit and proper test questionnaire and undertaking as per Annexure-V to SBP confirming that the person subject to FPT has been verified through the National Database and Registration Authority (Nadra) and screened against the list(s) of designated/proscribed entities and persons as per the applicable laws, rules and regulations.

The central bank further said FPT is continuous in nature. “Any subsequent change in this regard shall be immediately disclosed to the board of directors and/or the concerned authority including SBP.”

Under the new FPT, the private commercial banks have to declare that the financial institutions are satisfied that the citizenship of the proposed appointment of an executive has been verified from Nadra and the relevant documents submitted to the State Bank.

In case the proposed appointee is a foreign national, a bank has to declare that the citizenship of the proposed appointee has been verified from the concerned embassy and FPT documents submitted to the central bank.

The banks/DFIs would also confirm that proposed appointee is not directly or indirectly associated with designated/proscribed entities and/or persons under United Nations Security Council Resolution or Anti-Terrorism Act 1997 and other applicable laws, rules and regulations, according to the SBP.

In case of a public sector entity, a bank will confirm that the proposed appointee is eligible to be appointed under the relevant laws pertaining to the bank/DFI: Banks Nationalization Act 1974, Bank of Khyber Act 1991, Bank of Punjab Act 1989, etc..

The central bank also issued a questionnaire for an individual, who is proposed to be hired at executive post. The questionnaire covers the dual nationally of an individual and his/her past record of any affiliation with tax fraud, criminal activities or any terror organisation.