KATHMANDU, Feb 26: Nepal Rastra Bank (NRB), in a bid to crack down on possible money laundering at the higher level, has asked three government-owned financial entities to keep a close eye on the transactions made by high-ranking government officials.
Issuing a circular on Tuesday, the NRB has instructed the Employees’ Provident Fund (EPF), Citizen Investment Trust (CIT) and Social Security Fund (SSF) to strictly enforce the anti money laundering measures implemented by the central bank. The three entities working in the social security area have been asked to maintain vigilance on the financial transactions carried out by the incumbent and retired high ranking officials in the civil service.
It also includes the individuals bearing high portfolios in foreign services or international organizations. “These three institutions will have to develop mechanisms to identify whether their clients belong to the same family members of the high-ranking government officials,” reads the circular issued by NRB.
The central bank’s call to track suspicious transactions at the government bodies working on social security has come in the aftermath of the Financial Action Task Force (FATF) adding Nepal to its grey list once again. The intergovernmental body has pointed out the country’s major weaknesses in being apathetic to risks of illegally-earned money as the reason for adding Nepal to the grey list. Increasing government surveillance based on risk intensity regarding the transactions being made in cooperatives, casinos, mines and mineral resources are among the concerns raised by the FATF.
Through the circular, the NRB has also directed the EPF, CIT and SSF to strictly update know your customer (KYC) of all their clients. It has also urged these entities to track the financial transactions to be done by the individuals maintained in sensitive lists by the Ministry of Home Affairs. In case of accounts maintained by the suspicious individuals, these organizations will have to freeze their account and report to the Money Laundering Prevention Supervision Division of the NRB within three days.
Meanwhile, the NRB has also asked the hire purchase companies to strictly follow the Suspicious Transaction/Activity Report and goAML Operational Guidelines. The companies have been asked to maintain due details of their clients while issuing loans.