ISLAMABAD – Drastic rise in the Suspicious Transactions Reports surface inPakistan raising the alarm bells for the policy makers.
A record increase in the Suspicious Transaction Reports (STRs) by September2019 has been reported by Banks; increasing to 14,545.
The Suspicious Transaction Reports received from banks and financialinstitutions by Financial Monitoring Unit (FMU) have been registering agrowth in each passing year due to the implementation of checks andbalances on the directives of the central bank.
According to the report issued by FMU, STRs went up from 5,548 to 8,708 in2018 and then to 14,545 till September 2019. The increase in STRs does notmean a rise in suspicious activities but it actually implies the strictmonitoring of the banking system to curb the misuse at differentorganizations or its related functions.
Financial Monitoring Unit (FMU) is an autonomous body. The basic functionsof FMU are to receive and analyze the Suspicious Transactions Reports(STRs) as well as Currency Transactions Reports (CTRs) from its designatedreporting entities. The FMU may disseminate the Financial Intelligence tothe concerned Law Enforcement Agencies (if required) for their furthernecessary action in this respect.
Another function of this specialized financial intelligence agency is toensure compliance with Pakistan’s Financial Action Task Force (FATF)’srecommendations on Anti-Money laundering (AML) and terrorist financing.
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Overall, the unit received a total of 41,255 STRs since 2004. Out of totalSTRs, 22% of them were marked as the high-risk STRs and referred to LawEnforcement Agencies for action. Besides, 42 percent of the STRs weredisseminated to regulators such as State Bank of Pakistan (SBP) andSecurity and Exchange Commission of Pakistan (SECP) while 36% wereidentified to be low-risk STRs.
In the last couple of years, LEAs unearthed several cases of Benamiaccounts in which millions of Rupees were secured in the name of unknownpeople. Subsequently, the banking regulator has tightened the regulationsand has started imposing heavy penalties on these institutions as a resultof violations.
”I have been using banking facility for transferring money to our hometownevery month but now few steps have been added in the process including theaddition of new columns in deposit slips and the submission of CNIC copy oneach transaction,” a customer told ProPakistani. Earlier, these things wereignored or accommodated by the bankers for loyal customers of the bank.
The major reporting sectors are commercial banks followed by ExchangeCompanies and Microfinance Banks. Top three STR reporting districts from2015 to September 2019 are Karachi, Lahore and Islamabad with 9,214; 7,687and 2,496 reported STRs respectively, the report added.
