FE Report

The central bank Sunday asked all stakeholders concerned to frame a complete guideline on 'Know Your Client' (KYC), record keeping, transaction monitoring and reporting, internal control, policies and procedures to comply with the Anti-Money Laundering Act-2012.

The Bangladesh Bank also asked the stock dealers and brokers, portfolio managers and merchant bankers, securities custodians and assent management companies to form their respective units under the leadership of a high-official each for prevention of money laundering and terror financing.

"Stock market-related institutions should carry out an independent audit to evaluate the effectiveness of the steps taken for checking money laundering and terror financing," a circular issued by the central bank said.

The directive came in pursuance of complying with the requirements of the global anti-money laundering watchdogs-Financial Action Task Force (FATF) and Asia Pacific Group (APG), officials said. In the directive the BB asked the stakeholders to keep detailed information of their new and old clients. "No beneficiary accounts can be opened with disguised or fake names."

It also asked the stakeholders to be more cautious and take due diligence in the case of politically exposed persons (PEPs) because of the risk of money laundering.

The circular defined the PEPs as "individuals who are or have been 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."

"Business relationships with family members or close associates of PEPs involve reputational risks similar to those with PEPs themselves," the circular reads.

The circular also gave details on how to report and monitor suspicious accounts and transactions.

It asked the stakeholders to be more cautious and follow appropriate screening mechanism while recruiting manpower. The stakeholders have been asked to keep information on clients up to five years after the cancellation of any client-institution relationship.

The directive also asked the stakeholders to report on the steps taken in line with the circular within three months of its issuance.