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SBP extends relaxation of biometric verification of dormant accounts

SBP extends relaxation of biometric verification of dormant accounts

KARACHI: The State Bank of Pakistan (SBP) has further extended the relaxations regarding biometric verification and activation of dormant accounts to December 31, 2021.

The decision has been taken to ease the challenges faced by banks, Development Financial Institutions and Microfinance Banks, and their account holders due to the COVID-19 pandemic said a circular letter issued by the central bank’s Banking Policy and Regulations Department on Monday.

Under the anti-money laundering and counter-terrorism financing measures physical presence and biometric verification of persons intending to open an account or start a business with the financial entity was made mandatory but perceiving the risk of spread of COVID-19 from physical contact banks were allowed to utilize NADRA Verisys in place of Biometric Verification (BMV) for verification purposes.

It has been decided to extend the validity of measures stipulated in the relevant Circular Letter from June 30, 2021, to December 31, 2021. The central bank has updated the requirement stipulated in BPRD Circular Letter No. 09 of 2020 and AC MFD Circular Letter No. 03 of 2020.

The revised Para A(i)(a) now reads, “– for acknowledgment of the physical presence of the customer for opening accounts without biometric verification may be relaxed by banks, in case of bank accounts of legal persons/ arrangements where the signatories (persons authorized to open or operate the accounts) are unable to travel to Pakistan amid COVID-19 restrictions.

However, banks shall ensure customers’ consent and take necessary measures to mitigate the risk of identity theft. This provision is only applicable for accounts of legal persons/ arrangements resident in Pakistan, whose signatures are temporarily outside Pakistan.”

The RE’s were further instructed with reference to the Definition -25 of AML/CFT/CPF Regulations that REs may not mark any accounts as dormant or in-operative (in terms of the definition of 25 of AML/CFT/CPF Regulations) till December 31, 2021. However, the accounts already marked dormant shall remain dormant unless activated as per Regulations.

In case of expiry of CNIC or another identity document (other than high-risk customers) during the course of the business relationship, REs may allow continuity of business relationship or operations in the account up to December 31, 2021. However, REs shall ensure reasonable measures to obtain a copy of renewed CNIC/ identity documents from the customers within this timeline.

The central bank also sternly advised REs to comply with the relief measures provided by SBP with regard to the impact of COVID-19, particularly regarding biometric verification and activation of dormant accounts.