Economic Reporter :
In the backdrop of reluctance to follow instruction of the regulator, the Microcredit Regulatory Authority (MRA) has asked all microfinance institutions (MFIs) to comply with the Money Laundering Prevention Act properly.
To this issue, the MRA issued a circular recently as the country’s MFIs are allegedly showing apathy to report to the Bangladesh Financial Intelligence Unit (BFIU) about their activities.
“The circular is a warning. We’ve found that many of them (MFIs) are not reporting to the BFIU. The MRA issued the circular in line with the central bank and the BFIU initiative,” an MRA director told The New Nation.
He said it was just a cautionary step against possible anti-money laundering and terror financing activities. Earlier, the MRA disseminated the central bank’s guidelines to the MFIs to this end.
According to the law, MFIs have to preserve complete information on its clients. Information on closed accounts has to be preserved for five years and micro lenders have to provide any information if the authority wants.
The MFIs have to report to the BFIU if they (MFIs) find any dubious transaction as per the Money Laundering Prevention Act.
“If any MFI fails to comply with the law, it will be fined Tk 50,000 to 2.5 million along with cancellation of licences of certain branch or entire organisation,” according to the MRA circular.
From this year, the MFIs have to add an additional clause to their annual reports about whether they follow the directives stated in the ‘Guidelines on Prevention of Money Laundering and Terror Financing for NGO/NPO Sector.’
The Bangladesh Bank (BB) issued the guideline in November last year to check terror financing using non-governmental organisations (NGOs) and non-profit organisations (NPOs).
Under the provisions, the NGOs and the NPOs will have to submit suspicious transaction reports (STRs) or suspicious activity reports (SARs) to the central bank like commercial banks and non-banking financial institutions, if required.
If any NGO/NPO or any person of NGO/NPO is involved in terrorism or in financing terrorism activities, organised crime; or is involved in corruption and bribery, fraud, forgery, or any other offences, and money or property earned from them is laundered or attempted to be laundered, such incidents have to be reported in line with the existing rules and regulations.
According to the MRA, there are 686 MFIs in the country now.
The sector at present has 20 million borrowers and 26 million members with outstanding loans amounting to Tk 350 billion.
In the backdrop of reluctance to follow instruction of the regulator, the Microcredit Regulatory Authority (MRA) has asked all microfinance institutions (MFIs) to comply with the Money Laundering Prevention Act properly.
To this issue, the MRA issued a circular recently as the country’s MFIs are allegedly showing apathy to report to the Bangladesh Financial Intelligence Unit (BFIU) about their activities.
“The circular is a warning. We’ve found that many of them (MFIs) are not reporting to the BFIU. The MRA issued the circular in line with the central bank and the BFIU initiative,” an MRA director told The New Nation.
He said it was just a cautionary step against possible anti-money laundering and terror financing activities. Earlier, the MRA disseminated the central bank’s guidelines to the MFIs to this end.
According to the law, MFIs have to preserve complete information on its clients. Information on closed accounts has to be preserved for five years and micro lenders have to provide any information if the authority wants.
The MFIs have to report to the BFIU if they (MFIs) find any dubious transaction as per the Money Laundering Prevention Act.
“If any MFI fails to comply with the law, it will be fined Tk 50,000 to 2.5 million along with cancellation of licences of certain branch or entire organisation,” according to the MRA circular.
From this year, the MFIs have to add an additional clause to their annual reports about whether they follow the directives stated in the ‘Guidelines on Prevention of Money Laundering and Terror Financing for NGO/NPO Sector.’
The Bangladesh Bank (BB) issued the guideline in November last year to check terror financing using non-governmental organisations (NGOs) and non-profit organisations (NPOs).
Under the provisions, the NGOs and the NPOs will have to submit suspicious transaction reports (STRs) or suspicious activity reports (SARs) to the central bank like commercial banks and non-banking financial institutions, if required.
If any NGO/NPO or any person of NGO/NPO is involved in terrorism or in financing terrorism activities, organised crime; or is involved in corruption and bribery, fraud, forgery, or any other offences, and money or property earned from them is laundered or attempted to be laundered, such incidents have to be reported in line with the existing rules and regulations.
According to the MRA, there are 686 MFIs in the country now.
The sector at present has 20 million borrowers and 26 million members with outstanding loans amounting to Tk 350 billion.
