Measures to prevent abuse of internal bank transfers for illegal foreign currency transactions
Further to our circular to banks dated 26th of May 2020, titled “Enhanced Scrutiny of Transactions”, we have noted the increasing abuse of the internal bank transfers facility for purposes of parallel market dealings.
We have noted a trend where entities are using their bank accounts to buy foreign currency, using a network of “runners”, some of whom have been advertising their services on social media. These illicit transactions manifest in the form of daily multiple payments from one account to beneficiaries who hold accounts in the same bank.
In order to curb this practice, banks are directed to implement the following measures, with immediate effect.
1. Each bank customer shall make not more than two transactions per day by way of internal transfer, regardless of the values involved.
There is no restriction on RTGS transfers, but banks should exercise necessary due diligence.
2. Where a customer has genuine and proven need to conduct more than two transactions in a day by way of internal transfers, the customer shall obtain approval from bank management (whether at head office or branch level). Banks shall submit daily returns to the FIU giving details of such transactions and the underlying business purpose.