ISLAMABAD: The banking sector has taken foolproof measures to check monetary losses in result of fraudulent activities committed by the criminals.
Usually the banks face financial crimes involving the unlawful conversion of the ownership of property (belonging to one person) to one’s own personal use and benefit. These crimes also involve fraud (cheque fraud, credit card fraud, mortgage fraud, medical fraud, corporate fraud, securities fraud (including insider trading), bank fraud, payment (point of sale) fraud, health care fraud); theft; scams or confidence tricks; tax evasion; bribery; embezzlement; identity theft; money laundering; and forgery and counterfeiting, including the production of Counterfeit money and consumer goods.
Moreover, banking sector in Pakistan also confronts financial crimes involving additional criminal acts, such as computer crime, elder abuse, burglary, armed robbery, and even violent crime such as robbery or murder. Financial crimes may be carried out by individuals, corporations, or by organized crime groups. Victims may include individuals, corporations, governments, and entire economies.
These measures include issuance of necessary instructions to staff to ensure strict compliance of laid down policies and procedures, strengthening of security measures and internal controls in branches as well as strict disciplinary actions against delinquent staff etc” a well placed source at Finance Ministry told this scribe here on Saturday.
The source said that overall 42 persons have been arrested in the said incidents of frauds in last one year. While banks have steps taken to recover the amount involved in these frauds includes recovery from insurance claims and other sources, legal actions against perpetrators of frauds, registration of FIR against culprits as well as the constant follow-up with individuals involved for recovery etc.
In order to strengthen the Fraud Risk Management and Monitoring functions in banks, SBP has issued detailed instructions on Fraud Risk Management & Reporting in February 2014 which requires banks to formulate and implement Fraud Prevention Policy, Whistle Blowing Program, Quarterly & Annual review of frauds through involvement of the Board and senior management etc.
Furthermore, constant follow up is being done with the banks on the cases of frauds and SBP Inspection team ensures compliance of instructions issued during their normal course of inspection.
It is pertinent to note here that money laundering and terrorist financing raise significant issues with regard to prevention, detection and prosecution. Sophisticated techniques used to launder money and finance terrorism add to the complexity of these issues.
Such sophisticated techniques may involve different types of financial institutions; multiple financial transactions; the use of intermediaries, such as financial advisers, accountants, shell corporations and other service providers; transfers to, through, and from different countries; and the use of different financial instruments and other kinds of value-storing assets.
The Financial Action Task Force on Money Laundering (FATF), which is recognized as the international standard setter for Anti-money Laundering (AML) efforts, defines the term “money laundering” briefly as “the processing of criminal proceeds to disguise their illegal origin” in order to “legitimize” the ill-gotten gains of crime.
