BB hands out guideline to assess terror financing risks
The central bank has issued a set of instructions for banks to help them hedge risks related to money laundering and terrorist financing.
The Bangladesh Financial Intelligence Unit (BFIU), the anti-money laundering wing of the central bank, issued the “Money Laundering and Terrorist Financing Risk Assessment Guidelines for Banking Sector” yesterday.
"This guideline will provide the basic ideas of identifying, assessing and mitigating money laundering and terrorist financing risks that banks may encounter," Bangladesh Bank said.
The guideline is issued to comply with the Money Laundering Prevention Rules 2013 which states that every reporting organisation-financial institution shall conduct periodic risk assessment and forward the same to the BFIU for vetting.
It is also in line with the UN's Financial Action Task Force's recommendations, which require financial institutions and designated non-financial businesses and professions to identify, assess and take effective action to mitigate their money laundering and terrorist financing risks.
The guideline said in order to treat the identified risks, banks shall assess the level of risks by blending likelihood and impact of the risks. Banks shall put anti-money laundering and counter-terrorist financing programmes in place to conduct periodic risk assessment.
However, the guideline shall be treated as the minimum instructions and indications to identify and assess the risk of money laundering and terrorist financing in their businesses and take effective measures to mitigate the identified risk.
"Banks are allowed to use more stringent tools to identify and assess the risk of money laundering and terrorist financing in their entities," the BB said.
Banks have to apply enhanced due diligence in high risk cases and simplified due diligence in low risk ones.
Banks will get up to March 31 this year to complete the risk assessment process.
The central bank is beefing up its efforts to curb money laundering and terrorist financing, as money launderers are coming up with new and inventive ways to go about their financial crimes.
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