National Savings tightens checks on investors

National Savings tightens checks on investors

ISLAMABAD: The government has tightened monitoring of investors of national savings to comply with conditions of Financial Action Task Force (FATF) and prevent transactions related to money laundering and terror financing.

The Central Directorate of National Savings (CDNS) has prepared a comprehensive plan to examine the customers and issued instructions to all its regional offices in the country.

The plan has been prepared by the National Savings (AML&CFT) Supervisory Board in consultation with the Financial Monitoring Unit (FMU).

Under the plan the offices of the national savings have been advised to follow the guidelines in examining and monitoring the customs of the saving certificates and prize bonds.

All those customers will be examined where overall investment quantum, account balance or transactional activity is not in line with their businesses, known means or stated purpose of products.

The authorities issued red flags for transactional patterns related to all products, including certificates, accounts and prize bonds.

Following are the red flags to identify suspicious transactions:

·         Nominee is not a close relative or change in nominee (for instance, to include non-family members).

·         Third party check is provided for investment.

·         Purchase of a long-term investment product followed shortly thereafter by a request to liquidate the position to get back the invested amount.

·         Overall investment quantum, account balance or transactional activity is not in line with the customer’s business, known means or stated purpose of the product.

·         Client is frequently purchasing savings certificates / prize bonds through unusual payments in cash which do not commensurate with his/her profile.

·         Unusually high levels of investments or unusually large transactions in relation to what might reasonably be expected of clients with a similar profile.

·         When transactions are conducted without any apparent legitimate or economic reason.

·         Where multiple deposits are made by unrelated individuals.

·         Large cash is deposited followed by early withdrawal.

·         Where large deposits and withdrawals are made routinely, and the end of day balance is very low or nil.

·         When a customer insists to buy multiple savings certificates/prize bonds through structured/broken cash transactions to avoid CTR reporting threshold (PKR 2.0 Million and above).

·         Two or more customers (Linked/associated with each other) working together to break one cash transaction into two or more transactions to evade the CTR reporting requirement.

·         Purchase of higher denomination Prize Bonds against cash without providing any plausible justification.

·         Encashment of higher denomination Prize Bonds without any plausible justification.

·         When a customer is frequently converting one product into another (especially in the name of an unrelated third party) without any plausible justification.

·         Numerous prizes are repeatedly/very frequently being claimed by the customer against winning prize bonds during a short span of time.