Bankers stress FATF demands should be met

KARACHI: Bankers in Pakistan see negative impact of FATF fresh warning for Pakistan and said the government must understand the full impact of further downgrading from current grey list.

The Paris-based Financial Action Task Force (FATF) has been unusually critical of Pakistan’s efforts to safeguard its financial system from the risk posed by terror financing and money laundering. Former head of compliance who was dealing with the money laundering in a commercial bank, R.M. Alam said that Pakistan must understand that any kind of further degradation in eyes of watchdogs could put the economy under serious threat.

“All efforts for foreign investment would be zero if the country is blacklisted,” said Mr. Alam while advising the government to develop better understanding with the real problem. He said there may be some politics in this game but factually the country needs to address the issue as per the demand of the FATF.

However, he said there was no immediate impact on banking in the country; the country has time to reach the target.

“I believe that due to weak financial position Pakistan will have to follow the guidelines given by the FATF,” said a senior banker. He said everybody knows that banks in Dubai have been handling billions of dollars of Iran despite sanctions on the country. He said banks in developed economies are also involved in all kind of illegal activities including dealing with wealth created out of drug trafficking.

“The banks are caught sometimes and are penalised like latest penalty of $5.1 billion by a French Court helping tax evasion but no country is threatened for terror financing despite the fact nobody knows where these money were transferred,” he said.