Tuesday, February 28, 2012

http://www.dailytimes.com.pk/default.asp?page=2012%5C02%5C28%5Cstory_28-2-2012_pg7_24

ISLAMABAD: The State Bank of Pakistan (SBP) on Monday informed Senate Committee on Finance that Pakistan would amend its Anti-Terrorism Act and is working on a draft legislation to ensure enforcement of Anti-Terrorism Act provisions in financial services sector for conviction of persons found involved in money-laundering.

SBP Governor Yasin Anwar informed the committee, which met in the Parliament House with Senator Ahmed Ali in the chair, that the Financial Action Task Force (FATF), an international body on anti-money laundering, has placed Pakistan among countries whose status has been determined in public statement.

The governor informed the committee that the ministries of finance and interior, Securities and Exchange Commission of Pakistan (SECP), the SBP and other stakeholders were working on new legislation to put Pakistan back on Anti-Money Laundering compliant countries list.

The SBP governor, however, strongly defended its monetary policy stance and termed the International Monitory Fund’s stance of accommodative monetary policy wrong. He said that the SBP’s monetary policy stance was not accommodative, adding that injecting liquidity in the banking sector was necessary to keep this sector afloat. He said not injecting liquidity in banking sector would give wrong signal, and the SBP was taking measures and government papers might dry up in near future.

He said the banks had been advised to plan long term policies for financing to agriculture, SMEs and housing finance to keep them in business. He said that the SBP and SECP were engaged in development of debt market in Pakistan as well as long-term financing arrangement.

The finance secretary informed the meeting that Pakistan had not been blacklisted by FATF, however, the country’s name had been placed among the list of countries, which had been included in the public statement. He was of the view that some key amendments were needed in Pakistan’s anti-money laundering regime legislation.

However, the chairman and members of the committee were concerned about the attitude of the Finance Ministry for not making any effort to avoid such kind of mishap at international forum.

Senator Ahmad Ali was of the view that blacklisting of Pakistan by FATF would have negative implications on Pakistan interest rate, banks would face difficulty and Pakistan would not be able to float its exchangeable bonds in international financial market. The members of the committee were of the view that the Senate committee had passed Anti-Money-Laundering legislation to avoid Pakistan’s blacklisting one year ago and it was decided that further required amendments would be brought in parliament within next six months. However, the Finance Ministry has not taken serious notice of it and resultantly the country had been blacklisted by FATF.