ISLAMABAD: A Senate sub-committee has instructed the State Bank of Pakistan to provide detailed Standard Operating Procedures (SOPs) concerning Politically Exposed Persons (PEPs) and the Financial Action Task Force (FATF) regulations, following a recent meeting at Parliament House. The session, overseen by Senator Farooq Hamid Naek, included discussions on the definitions and regulations affecting PEPs and their family members.
According to Senate of Pakistan, the sub-committee focused on the interpretation of family members and associates under PEP regulations, highlighting cultural differences in definition standards. The State Bank of Pakistan clarified that its regulations consider spouses, lineal relatives, and siblings of the PEP as family members. Senator Mohammad Abdul Qadir called for easing the banking process for PEPs to prevent unnecessary obstacles in their financial dealings.
The Deputy Governor of the State Bank provided insights into the FATF standards, stating that banks must take prudent measures to trace the origins of wealth and funds, and ensure ongoing scrutiny of business relationships. The discussion also touched on privacy concerns in banking practices and the requirement for independent children of PEPs to submit financial details. The Senate panel urged banks to focus their monitoring efforts on transactions that raise suspicion rather than broadly requiring wealth statements.
Senator Anusha Rahman suggested rephrasing the term “suspicious transaction” to a less stigmatizing term. Additionally, the Deputy Governor mentioned the ongoing development of regulations for cryptocurrency, with a new authority, the Pakistan Virtual Assets Regulatory Authority (PVARA), in the process of being established to regulate and license crypto assets.
The meeting concluded with directives for the State Bank to furnish the Senate sub-committee with the FATF-related regulations, bank instructions, and SOPs concerning PEPs. The Deputy Governor assured the committee that all necessary documents and guidelines would be provided as requested.