report in The News, Jan 6, 2021
KARACHI: A respite for Pakistan from the global financial system’s watchdog that acknowledges the country’s anti-money laundering and counter terrorist financing efforts should be taken as an opportunity to improve compliance and come out of its radar, a banker said on Tuesday.
Ghazanfar Agha, a group head chief compliance officer at Samba Bank Limited said the economic implications of the Financial Action Task Force (FATF) are huge because there’s an overhang there’s a sort of sword over Pakistan’s head. There will be unlimited upside for the economy if Pakistan comes out the grey list of FATF in its next review due in February this year.
“If we continue to remain in FATF obviously people are scared and that element of risk remains,” Agha said in a recent video interview to Tresmark, a financial terminal that tracks markets worldwide. “I don’t see any downside risk at all we’re not going to get any worse from where we are.”
Regulatory technology is the cornerstone of how compliance is going to be managed in the coming years. “I’ve traded one of the largest derivatives trading book in Pakistan so a lot of risks get evaluated when you take positions and the risk of FATF overhang on Pakistan continues to be built in in all the business that we get, so the upside is unlimited if FATF is cleared we will obviously do very well.”
Globally compliance has adopted a very central stance in most banks. This push is coming from the penalties. The kind of penalties that have been imposed and the kind of financial battering that some of these institutions have taken they have understood that not to comply is not an option and it’s too expensive to mess around with being fully compliant, he said.
“People have realised that there’s the amount of money that you make of a business. It may not be good enough if you’re not compliant the penalties can far outweigh the benefits that can come through non-compliance,” Agha said.
“On-site inspections and on-site enforcements are going to recede in favor of technology, so at Samba Bank, I am looking at a lot of technological solutions to this, the idea is to grow technology and leverage human capacity in the staffing that we have with higher efficiencies,” he noted.
There’s a great movement going on right now where small and medium enterprises and medium enterprise both are being brought into the mainstream. In China and India, their entire growth engines were spurred by medium enterprises and small enterprises. In Pakistan we had large corporates and then there was a huge gulf between them and the lower ones, he said.
“As far as corporatisation of Pakistan is concerned if you look at the stock exchange 75-80 percent of our companies have registered an increase in income and registered an increase in the price of their shares in the last six months which is remarkable which means across the board, all industries have done well,” he added.
https://www.thenews.com.pk/print/769910-fatf-compliance-pressure-builds-on-as-february-around-the-corner
