Banks asked to keep greater vigil over maintaining accounts

The central bank yesterday asked all banks and financial institutions to keep greater vigil over politically exposed persons (PEP), including taking steps to establish their sources of wealth while opening and maintaining bank accounts.
The Bangladesh Bank directive came in accordance with the United Nations Convention against Corruption (UNCAC).
The convention defines PEPs as those "Entrusted with prominent public functions in a foreign country, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials." The convention also adds, "Business relationships with family members or close associates of PEPs involve reputation risks similar to those with PEPs themselves."
The PEPs and those related or associated with them will have to reveal their sources of income when opening bank accounts in countries, which have signed the convention.
In addition to verifying the sources of income and funds of the PEPs, the Bangladesh Bank (BB) directive obliges the banks and financial institutions to maintain a risk management system to identify PEPs, obtain high-up approval for establishing business relationships with such customers and continuous monitoring of these relationships.
Similarly, Bangladeshi PEPs are subject to similar restrictions in other countries that are signatories to the UNCAC.
Bangladesh ratified the UNCAC in February 2007. This enables the country to seek international assistance in recovering the country's assets moved abroad.
The convention requires nations to cooperate in the investigation, forfeiture and repatriation of stolen property.
The central bank also instructed the banks and financial institutions to "Observe all formalities as detailed in Guidelines for Foreign Exchange Transactions while opening accounts of non-residents."
The British Department for International Development (DFID) and the World Bank (WB) are helping Bangladesh retrieve money earned illegally and stored overseas under the same convention.
The WB has already sent a letter to the finance ministry regarding assistance in recovering the money laundered overseas, according to Economic Relations Division sources.