KARACHI: The State Bank of Pakistan has asked banks and development financial institutions (DFIs) to put in place a compliance programme to ensure that all relevant laws are complied with in letter and spirit and thus minimise legal and regulatory risks.
An SBP circular said on Saturday in order to keep activities of banks in compliance with relevant laws and regulations, especially with regard to Know Your Customer (KYC), and anti-money laundering law, rules and regulations, it has become necessary to appoint a compliance officer (CO) in financial institutions.
While some of the banks, especially branches of foreign banks operating in Pakistan have already appointed a CO, majority of the banks have not apponited one.
The circular said, board of directors or country manager in case of foreign banks shall appoint/designate a suitably qualified and experienced person as CO on a countrywide basis, who in turn will appoint COs down the line.
The COs will primarily be responsible for banks or DFI's effective compliance relating to State Bank Prudential Regulations, relevant provisions of existing laws and regulations, guidelines on KYC, anti-money laundering laws and regulations, timely submission of accurate data returns to regulator and other agencies, monitoring and reporting suspicious transactions to president or CEO of the bank or DFI and other related agencies.
The CO will serve as contact point between president or CEO and senior management, with regard to functioning of compliance programme.
The circular said banks and DFIs have been advised to put in place programme of compliance down the line under supervision of a CO.