Law allows for checks: Bakani


COMMERCIAL banks are required under the Anti-Money Laundering (AML) Act 2015 to know the source of cash being deposited by customers, according to the Bank of PNG (BPNG).
But Governor Loi Bakani said if the commercial banks already know the profile of clients, they should not ask questions.
East Sepik Governor Allan Bird had raised the issue in parliament this week about a bank seeking to know the source of funding as farmers tried to deposit cash.
“This is an issue we are faced with now where commercial banks are now required to know the source of funds coming in, where the deposits are coming from,” Bakani said.
“I agree with Bird (that) if the commercial banks know the profile of the company, that’s it’s an exporter, and if it’s exporting and producing documents to verify or justify the deposits, they shouldn’t be asking more questions.
“This is a result of the banks having to comply with the anti-money laundering act that came into being in 2015. It is under our unit called Fasu (Financial Stability Unit).
“Commercial banks are required to make sure that for any client that comes in and deposit or withdraw, they have to do due diligence on the client, know the source of funds, knowing why they are making the payments and to who and all those questions that were never there before.
“The impact is that when you question a small depositor who comes deposit earning from a sale or other income, they say I might as well keep my cash. I might as well go, forget a bank account. This is the kind of repelling effect we are seeing from people.”