Banking provisions for politicians

Tasneem Khalil

Tasneem Khalil

[Dhaka Correspondent] The central bank in Bangladesh has instructed banks to maintain “enhanced due diligence” about the accounts of “politically exposed persons” (PEP). The Bangladesh Bank in a circular, issued Tuesday, asked the banks to be more cautious when the PEP or their family members want to open bank accounts. The central bank issued the circular to comply with the UN Anti-Corruption Convention and the Financial Action Task force rules.

According to the circular, politically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, for example heads of state or government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials.

Business relationships with family members or close associates of the PEPs involve reputational risks similar to those with PEPs themselves, the circulation said. The central bank asked the banks to introduce risk management system when opening or maintaining bank accounts of PEPs. Consent from the higher authority of a bank will be needed if the bank wants to do business with PEPs.

The PEPs must disclose the source of their income to the bank while opening of maintaining accounts in the bank, the BB instructed the banks.