Regulators, in their continuous efforts to follow best banking practices to combat money laundering and terrorist financing to prevent the possible use of the banking sector for money laundering, terrorist financing, transfer of illegal/ill-gotten monies and other white collar crime, has come up with specific guidelines, for the financial institutions.
In line with the international best practices, to maintain consistent and focused approached within banking sector, central bank/ regulators have issued comprehensive documents. Governments identifying the increasing trend of financial crimes in the industry have finally promulgated Anti-Money Laundering Ordinances, which accorded legislative support to take stern action against the culprits involved into such activities.
Compliance with all country’s laws and regulations is a primary responsibility of the bank and its employees, and is vital for smooth functioning; improved customers and shareholders confidence and protecting our franchise image globally.
Businesses, in their constant drive to compete in the market and to provide complete range of banking products, as available with other competitors, would like venturing into new products/ services, which may possess higher degree of Risk from compliance perspective; however such products/ services are not unlawful. To assist businesses in improving their market presence and brand image, Compliance and regulators will evaluate the need of entering into such business initiatives, identifying the inherent risks and enforcing mitigating controls in narrowing down the residual risk at an acceptable level.
The key elements that are critical for an effective implementation of Regulator’s plan are:
1. Management Commitment
2. Compliance Mandate
3. Organizational Structure
4. Policies and Procedures
6. MIS Reporting
Regulators, has already circulated policies to standardize compliance procedures for AML-KYC (High Risk & Public Figure accounts), Whistle Blowing and Group Personal Trading Policy (GPTP) Compliance policies and procedures will continue to be strengthened during coming years to leverage on the past experience. This will be achieved through trainings, branches and operations feedback, and quality of KYC profiling, AML exception report reviews.
During this year, with the help of group compliance, local compliance function will be further strengthened to ensure that all initiatives are being met and targets sets are achieved. .
This requirement will be fulfilled through:
I. Standard compliance policies that provides a consistent approach to comply with the institutional and regulatory requirements.
II. Quality assurance in customer due diligence (KYC) process, by sample review of new customer profiling.
III. Implementation of the AML Program monitoring procedures to provide consistency in our approach for complying with the international and local AML requirements.
IV. Specific and targeted reviews of high-risk areas such as AML /KYC, Public Figure accounts, high balance/ activity accounts.
To ensure meticulous compliance with all the institutional policies, regulatory requirement and relevant laws as applicable to our business and consequently ensures that central bank reviews receive satisfactory ratings. All open issues raised from regulatory inspection will be monitored and tracked to ensure timely resolution and also to communicate within relevant businesses to adopt “lessons learned” approach to avoid re-occurrence and bringing in consistency across the board.
Regulatory Major Changes
All outsourcing arrangements should be in compliance with the Outsourcing Policy. Necessary Terms and Condition as agreed in contracts / agreements should also be in line with the policy requirements. Business should ensure that the overall process being assigned under any outsourcing arrangement should be strictly in compliance with the control process defined in the outsourcing policy.
Proper adherence & compliance is ensured while carrying out various marketing related activities through alternate banking channels with respect to customer’s privacy. Compliance with all applicable laws, regulations and institutional policies on the subject is monitored and complied with.
Products and Credit Program
All new products and/or process changes require Compliance approvals. Product Programs are being reviewed by compliance to ensure adherence to related compliance policies.
Information Security (IS)
Close coordination with the Information Security officer to ensure compliance with the related policies and to maintain overall discipline.
Copy Rights, Software Licensing and Piracy
Compliance with the laws and regulations outlined in the Copy Rights Ordinance is mandatory. Bank has to ensure that only licensed soft wares are acquired for various system supports. Also all type of publications and subscriptions is arranged through authorized agents only.
Frauds and Forgeries
Banks are required to monitor and report all type of Frauds, Forgeries and Dacoities to the central bank. Compliance, where required, will assist Fraud Risk Management Unit (FRMU) and Legal in their efforts to curb fraudulent activities.
Collections efforts are in line with Recovery of Finances Ordinance, further “Foreclosure” practices are in line with the governing laws / regulations. Internal & External Legal counsels are engaged in the litigation / foreclosure process.
Names of all applicants for new account relationship are screened against SDN & Local negative/ watch lists at the time of account opening. Cross border funds transfer transactions are processed following screening of beneficiary name through a world check online support system.
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