6 Pakistani Banks Named In New Global Scandal For Carrying Out Suspicious Transactions

Pakistani Banks global suspicious transactions

Six Pakistani banks have been named in a new global scandal for carrying out suspicious transactions. Buzzfeed News and the International Consortium of Investigative Journalists (ICIJ) issued a report on the role of global banks in money laundering. It revealed 29 suspicious transactions close to $2.5 million.

The Pakistani banks named include Allied Bank, United Bank (UBL), Habib Metropolitan Bank, Bank Alfalah, Standard Chartered Bank Pakistan, and Habib Bank (HBL) involved in global suspicious transactions. Moreover, as per Profit Pakistan. all the suspicious transactions took place in 2011 and 2012.

Global banks seek to contain damage over $2 trillion of questionable transfers

Global banks faced a fresh scandal about dirty money on Monday. They sought to limit the fallout from a cache of leaked documents, said Reuters. The documents showed they transferred more than $2 trillion in suspect funds over nearly two decades.

Britain-based HSBC Holdings, Standard Chartered, and Barclays; Germany’s Deutsche Bank AG and Commerzbank AG; and US-headquartered JPMorgan Chase & Co and Bank of New York Mellon Corp also named in the report.

global suspicious transactions
Image: Twitter

The report was based on 2,100 leaked suspicious activity reports (SARs), covering transactions between 1999 and 2017. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Banks should file a SAR whenever handling funds that cause grounds for suspicion of criminal activity.

Money laundering & other criminal activity

Meanwhile, some banks said the transactions happened a long time ago, and they had since put robust checks in place. Moreover, the reports revealed broader problems with the monitoring system related to money laundering and other criminal activity.

The reports drew calls from some industry groups and activists for reforms. Investors worried about the potential fallout for global banks. Many banks faced hefty fines in the past for lapses in controls and spent billions of dollars to bolster compliance.

“It confirms what we already knew: that there are huge amounts of SARs being filed with relatively low numbers of cases brought through to prosecution,” said Etelka Bogardi, a Hong Kong-based financial services partner at Norton Rose Fulbright.

“It also brings out the point that managing financial crime risk goes beyond making SARs,” Bogardi said.

Pakistani Banks suspicious transactions
Image: Twitter

The Institute of International Finance, an industry group, called for reforms. “There is a balance to be struck between managing financial crime risk and ensuring access to the financial system for legitimate customers,” the IIF said.

Policymakers, regulators, and banks have long acknowledged fundamental flaws in the anti-money laundering system. The rules around what is deemed “suspicious” can be vague.

Meanwhile, the enforcement group is understaffed to handle the millions of SARs that need to be analyzed to determine whether a crime has been committed. Several analysts, however, played down the scale of problems.

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