PHILLIMON MHLANGA
Local banks should put in place frameworks to better detect and prevent money laundering and terrorists financing practices which are threatening domestic and global safety as well as compromising the integrity of the financial system, experts said this week.
They said banks are faced with a wide range of risks with the menace of black money or the underground economy becoming considerable and growing.
Zimbabwe banks, therefore, should demonstrate great ability to identify, monitor and control money laundering activities.
“Money laundering is quite an issue these days. Banks should conduct diligence to combat money laundering and able to pick up suspicious transactions,” Calvin Habasonda, a senior analyst (regulatory policy and research bank supervision) at the Bank of Zambia, told local banking sector players at an anti-money laundering and combating financing of terrorism meeting held in the capital yesterday.
“As a banker, you should get information to make a determination if a customer is still within the parameters known by the bank or they are suspected transactions. You should put in place frameworks that can detect or adequately prevent money laundering or suspicious transactions which negatively impact on economies.”
Government is working on a Money Laundering and Proceeds of Crime (Amendment) Bill meant to curb money laundering and plug mineral leakages in the country.
This, once signed into law, will aid in early detection of suspicious transactions being carried out and will allow the State to take any remedial actions that may be required timeously. It will also equip the Reserve Bank of Zimbabwe with powers to monitor and neutralise any cross border money laundering activities.
This will serve to safeguard the country’s financial system against its use as a vehicle for money laundering and the financing of terrorist activities.
Macroeconomic and Financial Management Institute of Eastern and Southern Africa director for financial sector programme, Patrick Mutimba said: “MEFMI takes very serious the threats posed by money laundering to our financial systems.
“This reputed billion dollar illegal activity has the power not only to undermine the integrity of financial entities, but also to corrupt legitimate industries, threaten the political stability of states and societies and damage the reputation of companies and indeed entire nations.
He said the adverse consequences for financial institutions include reputational, operational, legal and concentration risks.
