Wednesday, June 26, 2013

Central bank asks banks to be vigilant against the flow of dirty money

The central bank has stressed that banks need to comply with anti money laundering regulation by using only formal channels for transactions and fulfilling their responsibility regarding taxation as well.
"Anti money laundering rules not only include drug money, terrorism transfers and illegal weapons deal but compliance with cross-border transactions and paying taxes are also included," said Nepal Rastra Bank (NRB) governor Dr Yubaraj Khatiwada, during an interaction programme on 'Anti-Money Laundering/Combating Financing of Terrorism: Banks' Role and Challenges', here, in Kathmandu.
"Since Nepal has committed to fight Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT), the banking sector needs to follow the rules and be more vigilant," he added.
Nepal has recently brought remaining ordinances according to its international commitment to Financial Action Task Force (FATF), a global standard setting body for anti-money laundering and combating the financing of terrorism.
He also expressed that the central bank is flexible towards adapting these regulations and introducing legal provisions without affecting financial stability. He also cited NRB amendment of the 'Know-Your-Customer' forms to make the financial institutions easier to attracting depositors.
During the programme, central bank deputy governor Maha Prasad Adhikary reminded that Nepal has escaped from being blacklisted by FATF but will be scrutinised for implementation of the laws and their execution continuously.
"However, we are not asking banks to work like intelligence agencies but bank employees need to be more vigilant in detecting flow of of dirty money," he added.
Likewise, another deputy governor Gopal Prasad Kafle also pointed out that enforcing anti money laundering regulation will usher in transparency and accountability in the banking sector.
President of Nepal Bankers' Association (NBA) Rajan Singh Bhandari said that enforcing AML/CFT should not affect lending to productive sector and mobilising savings. “If the laws are too strict, people might store even the legal money at their homes instead of saving it in banks," he reminded.
The interaction programme was attended by chief executives of Mega Bank Nepal, Global IME Bank, Lumbini Bank and Civil Bank too.

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