Banks to monitor unusual fund movements

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has ordered banks to closely monitor the unusual movement of funds through digital channels as part of the enhanced efforts to combat money laundering and financing of terrorism.

BSP Deputy Governor Mamerto Tangonan said banks should proactively monitor the transactions of operators of payment systems (OPS) and non-bank electronic money issuers (EMIs) based on parameters or alert scenarios that capture their financial profile and behavioral account activities.

He said transactions of the personal accounts of the beneficial owners of the OPS and non-bank EMIs should likewise be monitored.

“Implementing robust systems to identify unusual movements of funds or transactions of the OPS or non-bank EMI for further investigation and determination if filing of suspicious transaction report is warranted,” Tangonan said.

The BSP has issued Memorandum   2021 – 021 on Monday containing the guidelines on sound risk management practices in dealing with OPS and non-bank EMIs.

Tangonan said BSP-supervised financial institutions (BSFIs) should make sure the risk profile of OPS and non-bank EMIs are current and relevant by periodically updating the counterparty risk assessment based on risk and materiality.

The regulator also told banks to establish policies and guidelines concerning non-compliance with anti-money laundering, combating the financing of terrorism obligations, covered and suspicious transaction reporting and termination of business relationship as a result of the ongoing monitoring.

Furthermore, BSFIs should conduct appropriate risk assessment of the OPS or the non-bank EMIs to identify, understand and assess risks arising and apply appropriate due diligence depending on risk profile considering relevant factors such as business, operations, customer profile, activities and services rendered, distribution channels, jurisdiction they are exposed to, and anticipated account activity.

BSFIs   should ensure the soundness and adequacy of their risk management policies and practices in dealing with OPS and non-bank EMIs.

The BSP is mandated under Republic Act 11127 or the National Payment Systems Act to maintain financial and monetary stability by promoting safe, secure, efficient and reliable operation of payment system.

Tangonan said banks should only deal with OPS and non-bank EMIs duly registered and licensed with the BSP. There are now close to 150 OPS registered with the BSP and more than 30 non-bank EMIs licensed by the regulator.

Likewise, he also said appropriate customer due diligence should also be performed when dealing with entities that are registered with the BSP, including evaluating and understanding the business and operations, as well as  obtaining additional information on the OPS and non-bank EMIs.

The Anti-Money Laundering Council (AMLC) and other government agencies have been stepping up its campaign against money laundering and financing of terrorism so that the Philippines would not be included in the gray list of Paris-based watchdog Financial Action Task Force (FATF).