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Terror outfit-turned 'charity' JuD set to come under Pak Central Bank scanner

Islamabad, Tue, 13 Mar 2012 ANI

Islamabad, Mar 13 (ANI): The Pakistan central bank's fresh instructions to financial institutions to maintain strict vigilance over non-governmental organisations (NGOs) and charities could put a spanner in the works for organizations like the Jamaat-ud-Dawa (JuD) that call themselves charitable institutions.


The central bank has ordered that a complete review of all such organisations' accounts be undertaken and completed before the end of this financial year, The Express Tribune reports.


Financial institutions have been warned that failure to follow the new guidelines over the financial activities of these organisations would result in legal action by banking authorities.


On Monday, the State Bank of Pakistan (SBP) had issued a policy and regulations circular regarding financial institutions' required compliance to new guidelines in order to "protect" them from the risks of money laundering and terrorist financing activities.


The regulations are binding on all financial institutions under the Banking Companies Ordinance 1962.


The institutions have reportedly been warned of "appropriate legal action" in case of non-compliance.


In accordance with the SBP's Banking Policy and Regulations Department Circular No4 (2012), banks and development financial institutions (DFIs) have been instructed to conduct "enhanced due diligence" and obtain senior management approval prior to establishing a relationship with any NGO or not-for-profit organisation (NPO) or charities.


Institutions will also be required to ensure that all transactions related to such accounts comply with the stated objectives of their operating entities.


All financial institutions are further required to open accounts only in the name of the relevant NGO or NPO, as per the title given in the documents submitted by the entity.


In case an organisation advertises its account number for soliciting donations or similar purposes, financial institutions are required to immediately flag the account and file a Suspicious Transaction Report if necessary in the condition that the advertising party's account title is not found to be in correspondence to the account number publicised. (ANI)


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