MUSLIM COMMERCIAL BANK

Money & BankingSection “A”

Final Presentation

Presented By:M. Shaharyar Saeed

IntroductionMCB Bank Limited, with more than 60 years

of experience as one of the leading banks in Pakistan, was incorporated on July 9 in 1947.

 MCB was nationalized along with other private banks in 1974 as part of Government of Pakistan's economic reform movement

 Today, MCB in one of the largest foreign banks in Sri Lanka, the first bank in Pakistan to launch Global Depository Receipts (GDR) in 2006, 

Continue…The bank has also been acknowledged

though prestigious recognition and awards by Euro money, MMT, Asia Money, SAFA (SAARC), The Asset and The Asian Banker.

VISION & MISSIONVision Statement:To be the leading financial services provider,

partnering with our customers for a more prosperous and secure future

Mission StatementWe are a team of committed professionals,

providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

Core ValuesINTEGRITYWe are the trustees of public funds and serve our community with

integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues.

 INNOVATIONWe encourage and reward people who challenge the status quo and

think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives.

 EXCELLENCEWe take personal responsibility for our role as leaders in the pursuit of

excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward.

 

Continue…CUSTOMER CENTRICITYOur customers are at the heart of everything we do. We

thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions.

RESPECTWe respect our customers’ values, beliefs, culture and

history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed.

Money LaunderingOrdinance and ACT

Anti-Money Laundering Ordinance 2009 has been promulgated thus equipping a financial system with legal backing for controlling the menace of money laundering.

The act of money laundering would be a serious offence punishable under the provisions of the Ordinance. The Ordinance has specified the role of different government departments, banks, regulatory bodies and investigating agencies for keeping a strict track on movement of illegal funds through the financial systems.

Continue….The Ordinance has also elaborated the

procedures to identify and highlight the suspicious account transactions through the banking system. As Defined in the AML Act 2010, the Federal Government by notification through official gazette established a Financial, Monitoring Unit (FMU) which is housed in the State Bank of Pakistan's Building as an independent monitoring body.

MCB Anti-Money LaunderingCompliance Group also embraced various

internal changes to further strengthen role of Compliance Function for Prevention of Money Laundering Activities and Combating Terrorist Financing, In line with MCB‟s slogan of Being the Most compliant Bank, Group implemented a Centralized Transaction Monitoring System called MANTAS to monitor account activities and identify various patterns of transactions as demonstrated by Customers and Field Offices to Highlight Suspicious Ones.

Continue…In Continuation to the above, Group also

deployed a Separate Name Filtering Solution, called HOTSCAN Online to monitor all the remittances, which are routed through SWIFT; Solution's main purpose is to capture any transaction, in which either remitter or beneficiary‟s name matches with the Names sanctioned by international regulatory bodies operating under the instructions of United Nations.

*Society for World Wide Interbank Financial Telecommunication (SWIFT)*

Sections for Money LaunderingBe aware of their personal legal obligations and

the legal obligations of the Bank. (See Section 2).

Be aware of the Bank's Policy and follow the Bank's procedures defined by external as well as internal requirements. (See Sections 3 - 6).

Be alert for anything suspicious related to customers and transactions. (See Section 7).

Report suspicions as per internal procedures developed in line with State Bank of Pakistan (SBP) and Financial Monitoring Unit (FMU) regulations. (See Section 8).

STAGES OF MONEY LAUNDERINGPlacement - (Injection or Pre-washing)

Placement, being the first stage is the means by which funds derived from a criminal activity are introduced into the financial system, either directly or through using other retail businesses. This can be in the form of large sums of cash or a series of smaller sums. Initial proceeds of drug trafficking or street sales of drugs are always in cash.

Continue…Layering - (Stacking or Washing)

The aim of the second stage is to disguise the transaction through a succession of complex financial transactions with the purpose of erasing as quickly as possible all links with its unlawful origin. The funds may be converted into shares, bonds or any other easily negotiable asset or may be transferred to other accounts in other jurisdictions.

Continue…Integration - (Recycling)

Complex integration schemes then place the laundered funds back into the economy through real estate, business assets, securities and equities, in such a way that they re-enter the financial system appearing as normal business funds that have been legitimately earned.

The largest amount of criminal money that needs to be laundered comes from the sale of illegal drugs, primarily heroin, cocaine and cannabis.

PUNISHMENT FOR MONEY LAUNDERING

Whoever commits the offence of money laundering shall be punishable with rigorous imprisonment for a term which shall not be less than one year but may extend to ten years and shall also be liable to fine which may extend to one million PKR and shall also be liable to forfeiture of property involved in the money laundering. [Anti-Money Laundering Act, 2010].

FOUR KEY ELEMENTS OF CDD / KYC

- Customer Identification

Customer Acceptance

Accounts & Transactions Monitoring

Risk Management

Knowing your customer means:Seeking evidence of identity and address and

independently confirming that evidence at the start of a business relationship with the Bank. (See sub-sections 4.3-4.10);

Seeking information regarding the nature of the business that the customer expects to conduct with the Bank, establishing sources of income and expected patterns of transactions, and keeping that information up to date, to show what might be regarded as normal activity for that customer.

Continue…All resident prospective customers for

accounts with MCB must be seen face to face except those customers who are living abroad and wants to open a non-face-to-face / on-line account; adequate measures in this regard should be taken, for example, independent verification by a reliable 3rd party, client report from the previous bank / DFI of the customer, etc.

Risk Management

MCB Bank has good risk framework a Risk Management & Portfolio Review Committee is in place which has five members including chairman of the committee. This committee is responsible for developing risk frame work according to the guidelines of SBP.

Currently a centralized framework is apply by the MCB which is comply with the guidelines of SBP I will discuss in detail where it applied for risk mitigation of all types of risk faced by the bank in this dynamic environment. Here under all types of risk which faced by the bank.  

Risks faced by MCB BankSystematic Risk:Unsystematic Risk:Credit Risk:Market Risk:Liquidity Risk:Operational Risk:Compliance Risk: Reputational Risk:Security risk:Security Guard: MCB Computerized Card:

CONCLUSION

THANK YOU!

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