State Bank of Pakistan (SBP) has asked microfinance banks to equip their branches with biometric machines and transactions monitoring systems to avoid them being used for Money Laundering/Terrorist Financing and other related threats.
In this regard, the central bank advised microfinance banks to ensure installation of bio-metric machines at branches by December 31, 2017. The use of biometric technology at the branch level should be ensured for instant verification of particulars of prospective customers.
Microfinance banks have been asked to utilize technology based solution e.g. Transaction Monitoring Systems (TMS) capable of producing meaningful alerts based on pre-defined parameters/thresholds, for analysis and possible reporting of suspicious transactions. In this regard, they are required to implement appropriate TMS by June 30, 2018.
 The central bank advised microfinance banks to ensure installation of bio-metric machines at branches by December 31, 2017.
The TMS may be customized based on the size, nature and complexity of their business environment and need of the institution.
Banks have been asked to promote Financial Inclusion products with enhanced financial literacy and awareness on risk based KYC requirement and consumer protection. MFBs also need to enhance their capacity, skills and products required to serve relevant market segment to achieve the Financial Inclusion objective.
MFBs shall submit progress reports in respect of the above instructions on a quarterly basis at [email protected] and ensure meticulous compliance with SBP’s instructions failing which shall attract punitive action under relevant provisions of the Microfinance Institutions Ordinance, 2001.
