EUS UPDATE BANK ACCOUNT OPENING...

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EUS UPDATE (28 Pages/12.03.2012)

BANK ACCOUNT OPENING DOCUMENTS

Read with Annexure-VIII with reference to Prudential Regulation M-1 [Customer Due Diligence (CDD)] enclosed to the Prudential Regulations for Corporate/Commercial Banking:

ANNEXURE-VIII:

Documents to be Obtained from Various Types of Customers/Account Holder(s) under Regulation M-I

I Individuals II Partnership III Joint Stock Companies IV Clubs, Societies and Associations V Agents Accounts VI Trust Account VII Executors and Administrators VIII NGOs/NPOs/Charities

EUS Enclosure PRUDENTIAL REGULATIONS M-1 TO M-5 Extract from BPRD Circular Letter No. 04 dated 12.03.2012

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USEFUL REFERENCES:

1. CNIC Deadlines/Extensions 2. NARA & KYC for Opening of Bank Accounts 3. Online Banking 4. Section 227 of the Companies Ordinance, 1984

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ANNEXURE-VIII

DOCUMENTS TO BE OBTAINED FROM VARIOUS TYPES OF CUSTOMERS/ACCOUNT HOLDER(S)

UNDER REGULATION M-I 1

1. EXPIRED CNICs - Opening of Accounts on the basis of NADRA

Receipt/Token in case of Expired CNICs, instructions vide BPRD Circular Letter No. 20 dated 29.08.2011 signed by the Sr. Joint Director, Mr. Amjad Iqbal, read as follows:

This refers to the instructions conveyed vide letter No. BPRD/BLRD-09/2009-8814 dated 30.12.2009 in terms of which accounts cannot be opened on the basis of expired CNICs.

2. With a view to facilitate the general public, it has been decided to allow the opening of account on the basis of attested copies of NADRA receipt/token and expired CNIC, provided all other requirements of account opening under Prudential Regulation M-1 are complied with.

3. Banks /DFIs shall, however, obtain copies of renewed CNICs of such customers within three months of the opening of accounts.

4. For CNICs which expire during the course of the customer’s banking relationship, banks/DFIs are advised to make use of system alerts and regularize their accounts as advised vide letter referred to above.

Opening of Account in Earthquake Affected Areas in the Absence of CNIC & Other Documents read as BPD Circular Letter No. 45 dated 02.11.2005 under EUS Update “Bank Accounts”.

Validity of Old NICs for Banking Business.– The old National ID Cards have been declared invalid by the National Database Registration Authority (NADRA) with effect from 31.01.2004. In order to facilitate the clients/customers’ of banks it has been decided that in cases where the depositors/borrowers have not yet obtained CNIC for opening of accounts/extension of financing the banks may obtain attested copies of old NIC and receipt of NADRA (evidencing that client has applied for CNIC) alongwith an undertaking in writing that a copy of CNIC will be submitted immediately on receipt vide BPD Circular Letter No. 8 dated 09.03.2004 signed by the Director, Mr. Muhammad Kamran Shehzad and addressed to all Banks/DFIs.

CNIC related clarifications/extensions read under “Useful References” here. Superseded KYC Regulation M-1 was derived from the Prudential Regulations for Corporate/Commercial Banking (First Edition–2003) duly notified vide BPD Circular No. 35 dated 28.10.2003. Earlier, such instructions were notified vide BPD Circular No. 10 dated 29.03.2003 and the subsequent BPD Circular Letter No. 8 dated 09.03.2004 (duly incorporated/modified under Regulation M-1).

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S. No.

Nature of Account

Documents/papers to be obtained

I Individuals 2 1. Attested photocopy of

computerized national identity

card (CNIC) 3 or passport of

the individual by a gazetted officer or an officer of the

bank/DFI. 4

2. In case the CNIC does not

contain a photograph, the bank/DFI should also obtain, in addition to CNIC, any other document such as driving

Accordingly, the requirement of Annexure of BPD Circular No. 10 dated 29.03.2003 has also been incorporated in the above-mentioned Annexure-VIII.

2. PROPRIETORSHIP – Read with Para 5(b) of existing PR M-1 (CDD). Earlier, the following addition was made in para (3) of superseded Regulation M-1 (KYC) vide BPD Circular No. 05 dated 08.07.2006 signed by the Senior Joint Director, Mr. Inayat Hussain:

“While opening bank account of “proprietorships”, the

requirements laid down for individuals at serial No.(1) of the Annexure to this regulation shall apply except the requirement mentioned at No.(3) of the Annexure. Banks/DFIs should exercise extra care in view of the fact that constituent documents are not available in such cases to confirm existence or otherwise of the proprietorships.”

3. BANKING FACILITIES TO NICOP/POC HOLDERS – It has been decided that the banks/DFIs may accept attested copy of National Identity Card for Overseas Pakistani (NICOP) and Pakistan Origin Card (POC) issued by National Database Registration Authority from their holders for opening bank accounts in Pakistan both in local and foreign currency in lieu of CNIC as mentioned at Sr. No. 1(1) of the annexure to the PR M-1 vide BPD Circular Letter No. 10 dated 18.03.2005 signed by the Director, Mr. Muhammad Kamran Shehzad.

4. ALIEN REGISTRATION CARD & PAK RUPEE ACCOUNT – With reference to BPD Circular Letter No. 19 dated June 4, 2004, it is clarified that the registered alien citizens residing in Pakistan are permitted to open bank account in Pak Rupee only vide BPD Circular Letter No. 25 dated 06.07.2004 signed by the Sr. Joint Director, Mr. Muhammad Ashraf Khan.

Earlier, at Sr. No. ‘I(1)’ of the Annexure to the PR M-1, Banks/DFIs may accept an attested copy of valid “Alien Registration Card” instead of CNIC in case of registered aliens who wish to open a bank account in Pakistan vide BPD Circular Letter No. 19 dated 04.06.2004, detail read under “Useful References” here.

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license etc. that contains a

photograph. 5

3. In case of a salaried person,

attested copy of his service card, or any other acceptable evidence of service, including, but not limited to a certificate from the employer.

4. In case of illiterate person, a

passport size photograph of the new account holder besides taking his right and left thumb impression on the specimen signature card.

II Partnership (i) Attested photocopies of identity

5. BANK CUSTOMERS HAVING CNIC WITHOUT PHOTOGRAPH

Read with following extract from BPD Circular Letter No. 32 dated 29.08.2005 signed by the Director, Mr. Muhammad Kamran Shehzad:

We are receiving references from banks that some of their clients have obtained Computerized National Identity Cards (CNIC) issued by NADRA which do not bear photographs. For opening the bank accounts of such CNIC holders, in terms of Prudential Regulation M-1, banks are required to obtain any other valid document from the customer which bear their photograph. However, banks may face a situation, where customers do not have any other valid document which bears their photograph.

In order to facilitate opening of bank accounts of such customers, it has been decided that the bank may allow them to open the accounts, subject to provision of following documents:

(i) A copy of the photograph duly attested by gazetted

officer/Nazim

(ii) A copy of CNIC without photograph duly attested by the same person who attested the copy of photograph as per Sr, No. (i) above.

(iii) A confirmation in writing to the effect that they have no

other document bearing their photograph.

The banks/DFIs are advised to ensure that the CNIC and the photograph are of the same person whose account is being opened with them. The particulars/CNIC of such persons must be confirmed from NADRA in writing or through its “VeriSys” system by the bank/DFI.

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cards of all partners. (ii) Attested copy of ‘Partnership

Deed’ duly signed by all partners of the firm.

(iii) Attested copy of Registration

Certificate with Registrar of Firms. In case the partnership is unregistered, this fact should be clearly mentioned on the Account Opening Form.

(iv) Authority letter, in original, in

favor of the person authorized to operate on the account of the firm.

III Joint Stock Certified copies of:

companies (i) Resolution of Board of

Directors for opening of account specifying the person(s) authorized to operate the

company account. 6

6. POWER OF ATTORNEY IN LIEU OF BOD RESOLUTION CASES

Read with following extract of BPRD Circular Letter No. 28 dated 08.12.2006 signed by the Joint Director, Mr. Mohsin Rasheed:

The requirement of documents for opening of a bank account for Joint Stock Companies, interalia, includes Resolution of Board of Directors authorizing a specific person(s) to operate the company’s account and Certificate of Commencement of Business. It has been noted that in few countries, (i) passing of a Board Resolution for the purpose of opening bank account is not in vogue and (ii) Certificate of Commencement of Business is also not issued by any institutions/body. As a result, banks have been approaching SBP quite often for relaxation of said conditions under Prudential Regulation- M1, while opening accounts of such entities. The matter has been considered/reviewed and it has been decided to relax the condition of obtaining Board Resolution and Certificate of Commencement of Business for opening bank account of only such foreign companies/entities belonging to countries where said requirements are not enforced under their laws/regulations. However, such foreign companies will have to furnish the following documents in lieu of resolution passed by BOD for opening of account and Certificate of Commencement of Business to the satisfaction of their banks.

(a) Power of Attorney from the competent authority for opening bank

accounts.

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(ii) Memorandum and Articles of

Association. (iii) Certificate of Incorporation. (iv) Certificate of Commencement

of Business. 7

(v) Attested photocopies of identity

cards of all the directors. (vi) List of directors on Form 29

issued by the Registrar Joint

Stock Companies. 8

(b) A certificate from the company Secretary, duly authorized by the Board,

that the entity started its business from certain date and that certificate of Commencement of Business is not issued in that country.

7. COMPANY SECRETARY CERTIFICATE IN LIEU OF COMMENCEMENT OF BUSINESS CERTIFICATE CASES Read with following extract of BPRD Circular Letter No. 28 dated 08.12.2006 signed by the Joint Director, Mr. Mohsin Rasheed:

The requirement of documents for opening of a bank account for Joint Stock Companies, interalia, includes Resolution of Board of Directors authorizing a specific person(s) to operate the company’s account and Certificate of Commencement of Business. It has been noted that in few countries, (i) passing of a Board Resolution for the purpose of opening bank account is not in vogue and (ii) Certificate of Commencement of Business is also not issued by any institutions/body. As a result, banks have been approaching SBP quite often for relaxation of said conditions under Prudential Regulation- M1, while opening accounts of such entities. The matter has been considered/reviewed and it has been decided to relax the condition of obtaining Board Resolution and Certificate of Commencement of Business for opening bank account of only such foreign companies/entities belonging to countries where said requirements are not enforced under their laws/regulations. However, such foreign companies will have to furnish the following documents in lieu of resolution passed by BOD for opening of account and Certificate of Commencement of Business to the satisfaction of their banks.

(a) Power of Attorney from the competent authority for opening bank

accounts.

(b) A certificate from the company Secretary, duly authorized by the Board, that the entity started its business from certain date and that certificate of Commencement of Business is not issued in that country.

8. REGULARIZATION OF PDOHA/DHA OR SIMILAR OTHER

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IV Clubs, (i) Certified copies of

Societies and Associations (a) Certificate of Registration. (b) By-laws/Rules &

Regulations. (ii) Resolution of the Governing

Body/Executive Committee for opening of account authorizing the person(s) to operate the account and attested copy of the identity card of the authorized person(s).

(iii) An undertaking signed by all the

authorized persons on behalf of the institution mentioning that when any change takes place in the persons authorized to operate on the account, the

AUTHORITIES ACCOUNTS – Read with following extract of BPRD Circular Letter No. 01 dated 16.01.2007 signed by the Joint Director, Syed Mansoor Ali:

Please refer to Prudential Regulations M-1 which requires minimum set of documents to be obtained by banks/DFIs for opening bank accounts of various categories of customers. The requirement of documents for opening of a bank account for Joint Stock Companies, interalia, includes attested photocopies of identity cards of all the directors.

The matter has been reviewed in the light of representation of banks and it has been decided that banks should obtain copies of CNICs of all the members of Governing and Executive Bodies of DHA or ask for delegation of power to Administrator under section (7) & (8) of the Pakistan Defence Housing Authority Order, 1980 and accept copy of CNIC of Administrator as well as authorized signatories for the purpose of opening accounts of DHA or similar other authorities subject to the condition that all other requirements laid down under PR-M1 shall be complied with in letter and spirit.

The existing accounts of DHA or similar other authorities, shall be regularized on the above lines within a period of three months from the issuance of this circular letter.

EUS Note.––Pakistan Defence Officers Housing Authority Order, 1980 (PDOHAO), Article 7 discussed “delegation of powers” and Article 8 “annual report and accounts”. Enactment with reference to similar authorities may be provided on demand to understand such relevant provisions.

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banker will be informed immediately.

V Agents (i) Certified copy of ‘Power of

Attorney ’. Accounts (ii) Attested photocopy of identity

card of the agent.

VI Trust Account (i) Attested copy of Certificate of Registration.

(ii) Attested photocopy of identity

cards of all the trustees. (iii) Certified copy of ‘Instrument of

Trust’. 9

VII Executors and Administrators

(i) Attested photocopy of identity cards of the Executor/Administrator.

9. INSTRUMENT OF TRUST OR TRUST DEED – Read with following

extract of BPRD Circular Letter No. 10 dated 30.03.2007 signed by the Joint Director, Syed Mansoor Ali:

Please refer to Prudential Regulations M-1 which requires minimum set of documents to be obtained by banks/DFIs for opening bank accounts of various categories of customers. The requirement of documents for opening of a bank account of a trust is as follows:

i) Attested copy of Certificate of Registration. ii) Attested copy of identity cards of all the trustees. iii) Certified copy of ‘Instrument of Trust’.

The matter has been reviewed in the light of representation of banks and it has been decided that submission of attested copy of registered Instrument of Trust or Trust Deed shall ipso facto meet the requirement laid down under (i) & (iii) above and it would not be necessary to obtain separate certificate from the registration authority. Moreover, banks can open bank accounts of trusts covered under section 227 of Companies Ordinance, 1984 including Provident Funds, Gratuity Funds and Pension Funds after obtaining evidence of registration with any Government authority. However, it shall be the responsibility of banks/DFIs to ensure that opening of Trust Accounts and subsequent operations in the accounts are in accordance with the spirit of Know Your Customer/Customer Due Diligence (KYC/CDD) and other Anti Money Laundering/Combating Financing of Terrorism (AML/CFT) safeguards.

EUS Note.––Section 227 (employees’ provident funds and securities) of the Companies Ordinance, 1984 read under “Useful References” here.

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(ii) Certified copy of Letter of

Administration or Probate.

10[VIII NGOs/NPOs/Charities (i) Certified copies of: (a) Registration documents/

certificate. (b) By-laws/Rules &

Regulations. (ii) Resolution of the Governing

Body/ Executive Committee, if it is the ultimate governing body, for opening of account and authorizing the person(s) to operate the account.

(iii) Attested photocopies of valid

CNICs of the authorized person(s) and members of Governing Body/ Executive Committee, if it is the ultimate governing body.

(iv) Any other documents as deemed

necessary including its annual accounts/ financial statements or disclosures in any form which may help to ascertain the detail of its activities, sources and usage of funds in order to assess the risk profile of the prospective customer.

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10. NGO/NPO/CHARITIES ACCOUNTS - The above mentioned documents

prescribed for opening the accounts of NGOs/NPOs under the existing Annexure-VIII to Prudential Regulation M-1. Addition of new S. No. VIII read with relevant BPRD Circular Letter No. 04 of 2012 dated 12.03.2012 signed by the Director, Mr. Mansoor H. Siddiqui and addressed to the Presidents/CEs of all Banks/DFIs and reproduced here under EUS Enclosure.

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EUS Enclosure

11 PRUDENTIAL REGULATIONS M-1 TO M-5 (Extract from BPRD Circular Letter No. 04 of 2012 dated 12.03.2012

signed by the Director, Mr. Mansoor H. Siddiqui and addressed to the Presidents/CEs of all Banks/DFIs)

This refers to Prudential Regulations M-1 to M-5 for Corporate/ Commercial Banking and other related regulations on governance along with instructions issued on the subject from time to time. 2. In order to protect Banks/DFIs from risks arising out of money laundering and terrorist financing activities, implementation and strict compliance of the following needs to be ensured.

a) Banks/DFIs should conduct enhanced due diligence (including obtaining senior management approval) while establishing relationship with Non-Governmental Organizations (NGOs)/Not-for-Profit Organizations (NPOs) and Charities to ensure that these accounts are used for legitimate purposes and the transactions are commensurate with the stated objectives and purposes.

b) The accounts should be opened in the name of relevant

NGO/NPO as per title given in its constituent documents mentioned in sub-para (f) below. The individuals who are authorized to operate these accounts and members of their governing body should also be subject to comprehensive Customer Due Diligence (CDD). Banks/DFIs should ensure that these persons are not affiliated with any proscribed entity, whether under the same name or a different name.

c) In case of advertisements through newspapers or any other

medium, especially when bank account number is mentioned for donations, Banks/DFIs will ensure that the title of the account is the same as that of the entity soliciting donations. In case of any difference, immediate caution should be marked on such accounts and the matter should be considered for filing Suspicious Transaction Report (STR).

11. PRUDENTIAL REGULATIONS M 1-5 updated under EUS Update

“Customer Due Diligence/KYC Policy PR M-1-5”.

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d) Personal accounts shall not be allowed to be used for charity purposes/collection of donations.

e) All existing relationships of NGOs/NPOs should be reviewed

by June 30, 2012 to ensure that these organizations, their authorized signatories, members of their governing body and the beneficial owners are not linked with any proscribed entities and persons, whether under the same name or a different name. In case of any positive match, Banks/DFIs should consider filing STR and/or take other actions as per law.

f) The following documents are being prescribed for opening the

accounts of NGOs/NPOs under the existing Annexure-VIII to Prudential Regulation M-1: 12

3. The State Bank places great significance on the continuous training of banks’ staff especially relating to AML/CFT. In this regard, the progress made by Banks/DFIs has also been encouraging, yet the relevant training combined with optimum use of technology is becoming inevitable due to ever changing nature of methods and trends in illicit activities. It is also important to test the capability and knowledge of the relevant staff on periodic basis. The online trainings and AML/CFT Tests of varying nature are available in the market which offer an opportunity for Banks/DFIs to equip their staff with relevant skills as per respective roles and responsibilities within the institution. Such Training Programs and Tests can either be purchased or developed by Banks/DFIs themselves. As the periodic training of the front end staff is crucial, which is the first point of contact with customers, Banks/DFIs are advised to either purchase or internally develop comprehensive AML/CFT Computer-based/online Training Programs and Tests. In this respect, a plan to acquire/develop such a Training Program and Tests along with clear timelines for implementation should be furnished to Director, BPRD latest by April 15, 2012. 4. Banks/DFIs should note that the subject regulations are binding instructions issued under Banking Companies Ordinance, 1962 and any non-compliance shall be dealt with appropriate action under the relevant law.

12. PRESCRIBED DOCUMENTS FOR OPENING THE ACCOUNTS OF

NGOs/NPOs - The documents for opening the accounts of NGOs/NPOs under the existing Annexure-VIII to Prudential Regulation M-1 prescribed under new S. No. VIII duly provided under the above-mentioned paragraph, which has been incorporated in the afore-mentioned Annexure-VIII.

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USEFUL REFERENCES

1. CNIC Deadlines/Extensions 2. NARA & KYC for Opening of Bank Accounts 3. Online Banking 4. Section 227 of the Companies Ordinance, 1984

1. CNIC (Computerized National Identity Card)

Obtaining From All the Bank Clients Deadlines/Extensions

CNIC Deadline (Ninth/Final Extension/31.12.2009)

PR M-1 Obtaining CNIC from all the Bank Clients

(Extract from BPRD Circular Letter No. 30 dated 30.09.2009 signed by the Jr. Joint Director, Mr. Amjad Iqbal)

Please refer to BPRD Circular Letter No. 18 dated 03.07.2009.

Although old NIC ceased to be a valid document after 31.01.2004 in terms of Interior Division’s 13[SRO No. 1139 dated 31.12.2003], yet State Bank has been providing extended periods of time to banks/DFIs for obtaining copies of CNICs from their customers.

It has now been decided to provide final opportunity for regularizing accounts without CNIC upto 31.12.2009. To this end, banks/DFIs are advised to adopt the following procedure:

13. VALIDITY OF OLD NICs – Earlier validity of old NICs was extended upto

31.12.2003 vide Notification No. 4/19/2001-NADRA.

Validity period of NICs issued under the National Registration Act, 1973 (LVI of 1973) was firstly extended for 2 years upto 30.06.2002, after establishment of NADRA under the National Database & Registration Authority Ordinance, 2000 (VIII of 2000) vide Notification No. F. 5/5/2000-NADRA. Secondly such extension was provided upto 31.03.2003. For more refer EUS DURE “National Data Base”, covering different types of national data inclusive of relating to CNICs.

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a) Inform their customers, through print and electronic media, that upon the expiry of extended deadline of 31-12-2009, accounts without CINC will be blocked for all debit transactions/withdrawals, irrespective of mode of payment, until subject regulatory requirement is fulfilled.

b) Debit block option should be exercised after one month

prior notice is served upon to such customers who have not submitted copies of their CNICs.

c) Remove the debit block from accounts upon submission

of copy of CNIC.

Banks/DFIs shall continue to provide information on progress made on the subject within seven days of the close of each fortnight, as per existing format.

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CNIC Deadline (Eighth Extension/30.09.2009)


(Extract from BPRD Circular Letter No. 18 dated 03.07.2009 signed by the Director, Syed Irfan Ali)


Based on the representation received from the banks, indicating difficulties in meeting the extended deadline of 30.06.2009 for complying with the instructions issued vide aforesaid Circular Letter, it has been decided to extend the date for meeting the subject requirement up to 30.09.2009.

Banks/DFIs shall continue to provide information on progress made on the subject on fortnightly basis, within seven days of the close of each fortnight, as per the following format.

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CNIC Deadline (Seventh Extension/30.06.2009)


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(Extract from BPRD Circular Letter No. 39 dated 31.12.2008 signed by the Senior Joint Director, Mr. Muhammad Saleem)


Based on the representation received from the banks, indicating difficulties in meeting the extended deadline of 31.12.2008 for complying with the instructions issued vide aforesaid Circular Letter, it has been decided to extend the date for meeting the subject requirement up to 30.06.2009.

Banks/DFIs are advised:

(I) To continue aggressive public campaign through

print/electronic media for creating public awareness on requirement of CNIC for banking purposes.

(II) To contact the accountholders individually who have

not yet provided the attested copy of CNIC.

Banks/DFIs are also advised to provide information on progress made on the subject on fortnightly basis, within seven days of the close of each fortnight, as per the following format.

(EUS Note.––As compared, same format as prescribed under BPRD Circular Letter No. 19 dated 02.07.2007)

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CNIC Deadline (Sixth Extension/31.12.2008)


(Extract from BPRD Circular Letter No. 18 dated 30.06.2008 signed by the Senior Joint Director, Mr. Muhammad Akhtar Javed)


Based on the representation received from the Banks, indicating difficulties in meeting the extended deadline of 30.06.2008 for complying with the instructions issued vide

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aforesaid circular letter, it has been decided to extend the date for meeting the subject requirement upto 31.12.2008.

Banks/DFIs are advised to carry on aggressive public campaign through print/ electronic media for creating public awareness on requirement of CNIC for banking purposes. Moreover, banks/DFIs are advised to contact the accountholders individually who have not yet provided the attested copy of CNIC. They are also required to provide information on progress made on the subject on fortnightly basis, within seven days of the close of each fortnight, as per

the following format. (EUS Note.––As compared, same format as prescribed under BPRD Circular Letter No. 19 dated 02.07.2007)

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CNIC Deadline (Fifth Extension/30.06.2008)


(Extract from BPRD Circular Letter No. 06 dated 04.04.2008 signed by the Senior Joint Director, Mr. Muhammad Saleem)


Based on the representation received from the Banks, indicating difficulties in meeting the extended deadline of 31.03.2008 for complying with the instructions issued vide aforesaid circular letter, it has been decided to extend the date for meeting the subject requirement up to 30.06.2008.

Banks/DFIs are advised to carry on aggressive public campaign through print/ electronic media for creating public awareness on requirement of CNIC for banking purposes. Moreover, banks/DFIs are advised to contact the accountholders individually who have not yet provided the attested copy of CNIC. They are also required to provide information on progress made on the subject on fortnightly basis, within seven days of the close of each fortnight, as per

the following format. (EUS Note.–– As compared, same

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format as prescribed under BPRD Circular Letter No. 19 dated 02.07.2007)

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CNIC Deadline (Fourth Extension/31.03.2008)


(Extract from BPRD Circular Letter No. 41 dated 31.12.2007 signed by the Joint Director, Syed Mansoor Ali)

Please refer to BP&RD Circular Letter No. 19 dated 02.07.2007.

Based on the representation received from the Banks, indicating difficulties in meeting the extended deadline of 31.12.2007 for complying with the instructions issued vide aforesaid circular letter by them, it has been decided to extend the date for meeting the subject requirement up to 31.03.2008.

Banks/DFIs are advised to carry on aggressive public campaign through print/ electronic media for creating public awareness on requirement of CNIC for banking purposes. Moreover, banks/DFIs are advised to contact the account holders individually who have not yet provided the attested copies of CNICs. They are also required to provide information on progress made on the subject on fortnightly basis, within seven days of the close of each fortnight, as per

the following format: (EUS Note.–– As compared, same format as prescribed under BPRD Circular Letter No. 19 dated 02.07.2007)

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CNIC Deadline (Third Extension/31.12.2007)


(Extract from BPRD Circular No. 19 dated 02.07.2007 signed by the Joint Director, Mr. Mohsin Rasheed)

Please refer to BPD Circular Letter No. 12 dated 01.07.2006.

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Based on the representation received from the Banks, indicating difficulties in meeting the extended deadline of 30.06.2007 for complying with the instructions issued vide aforesaid circular letter by them, it has been decided to extend the date for meeting the subject requirements up to 31.12.2007.

Banks/DFIs are advised to carry on aggressive public campaign through print/ electronic media for creating public awareness on requirement of CNIC for banking purposes. They are also advised to provide information on progress made on the subject on fortnightly basis, within seven days of the close of each fortnight, as per the following format.

Accounts without CNIC

Accounts with CNIC Active Accounts Inoperative

Accounts

Total No. of

Accounts

Number Percentage of total

number of accounts


number of accounts


number of accounts

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CNIC Deadline (Second Extension/30.06.2007)


(Extract from BPD Circular Letter No. 12 dated 01.07.2006 signed by the Senior Joint Director, Mr. Inayat Hussain)

Please refer to BPD Circular Letter No. 18 dated 02.06.2005 & BPD Circular Letter No. 46 dated 26.02.2005.

In this connection, we have received representation from the Pakistan Banks’ Association (PBA) indicating difficulties in meeting the extended deadline of 30.06.2006 for complying with the instructions issued vide aforesaid circular by their member banks, with a request for further extension. The matter has been considered at State Bank of Pakistan and it has

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been decided to extend the date for meeting the subject requirements as under:––

i) For customers/clients whose accounts are dormant and

an attested copy of account holder’s Computerized National Identity Card (CNIC) is not available in bank/DFI’s record, banks/DFIs shall not allow operation in such accounts until the account holder produces an attested copy of his/her CNIC and fulfill all other formalities for activation of the account.

ii) For all other bank clients/customers including

depositors & borrowers, banks/DFIs shall obtain the attested copies of CNICs by 30.06.2007. Banks/DFIs shall discontinue relationship with such customers who fail to submit a copy of their CNIC by the above deadline.

Banks/DFIs are encouraged to carry on public campaign through print/ electronic media individually as well as through Pakistan Banks’ Association for creating public awareness on requirement of CNIC for banking purposes. They are also advised to confirm compliance with the subject instructions by the above extended timelines.

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CNIC Deadline (First Extension/30.06.2006)


(Extract from BPD Circular Letter No. 46 dated 26.11.2005 signed by the Sr. Joint Director, Syed Irfan Ali)

Please refer to BPD Circular letter No. 18 dated 02.06.2005.

We have received representations from Pakistan Banks Association (PBA), wherein they have indicated various difficulties in meeting the deadline of 30.11.2005 for complying with the instructions issued vide the above referred circular letter by their member banks. The matter has been considered and it has been decided to extend the deadline upto 30.06.2006. All the banks/DFIs are, therefore, advised to

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confirm compliance with the instructions issued vide BPD Circular No. 18 of 2005 by the extended time limit.

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CNIC Deadline


(Extract from BPD Circular Letter No. 18 dated 02.06.2005 signed by the Director, Mr. Muhammad Kamran Shehzad) Please refer to Prudential Regulation M-1 issued vide BPD Circular No. 10 dated March 29, 2003 and BPD Circular Letter No. 8 dated March 9,2004 on the above subject.

2. In this regard, Federal Government had declared old National Identity Card (NIC) as invalid identification document after January 31, 2004 and announced Computerized National Identity Card (CNIC) as a valid document. Accordingly, Prudential Regulation M-1, which lays down minimum requirements to be fulfilled by banks/DFIs while starting relationship with new customers and maintaining and continuing relationship with existing customers, also requires that banks/DFIs should obtain CNICs from all their customers/clients for opening of accounts/ extension of financing.

3. It has, however, been observed that despite a lapse of over a year, banks/DFIs are continuing relationships with their existing customers on the basis of old NICs in violation of Prudential Regulation M-1.

4. The banks/DFIs are, therefore, advised to obtain an attested copy of CNIC from (i) all their existing customers/ clients and (ii) from those who opened their accounts on the basis of NADRA receipt, but have not furnished a copy of their CNIC as yet. The communication to the account holders to this effect, in addition to other means, may also be made through a separate letter alongwith the half-yearly statement of account for the period ending June 30, 2005. The banks should confirm compliance of the above instructions to SBP by November 30, 2005.

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5. State Bank of Pakistan, during the course of inspection, would particularly check the compliance of the above instructions. Non-compliance of the above instructions will invoke penal provisions under Banking Companies Ordinance 1962.

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Further, read with EUS Update “National Data Base”.

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2. NARA & KYC for Opening of Bank Accounts

National Aliens Registration Authority (NARA)

Extract from BPD Circular Letter No. 19 dated 04.06.2004 Signed by the Director, Mr. Muhammad Kamran Shehzad

Know Your Customer (PR-1) Incentive to Registered Aliens Residing in Pakistan

NARA through following letter No. 9(6)/2004/DD/(Reg-II)/NARA dated 10.05.2004 has informed that Government of Pakistan has, interalia, extended an incentive of opening of bank accounts to the registered aliens residing in Pakistan on providing a copy of “Alien Registration Card” issued by NARA. Accordingly, at Sr. No. ‘I(1)’ of the annexure to the above Prudential Regulation, Banks/DFIs may accept an attested copy of valid “Alien Registration Card” instead of CNIC in case of registered aliens who wish to open a bank account in Pakistan. All other instructions on the subject shall remain enforced/unchanged in respect of registered aliens as well.

“Government of Pakistan

Ministry of Interior National Aliens Registration Authority

C-82, Block 2, Clifton, Karachi

F.No.9(6)/2004/DD(Reg-II)/NARA Karachi the 10th May, 2004

Subject: INCENTIVES FOR REGISTERED ALIENS.

I am directed to state that the Government of Pakistan, Ministry of Interior vide their letter No.14/8/2003-Poll.E(IV) dated 28th January, 2004 (Copy enclosed for ready reference) have extended the following incentives to the registered aliens residing in Pakistan:

i) Opening of Bank Accounts ii) Driving Licence iii) Telephone, Gas, Electricity Connections iv) Admission in the Educational Institutions v) Registration of Vehicle.

2. You are requested to kindly issue the directives to the heads of the organizations under your administrative control for extending the

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above incentives to registered aliens on the basis of Alien Registration Card issued by NARA. Copies of aforesaid Letter endorsed to:

1. The Governor, SBP, Karachi 2. The Chief Secretary, Government of Sindh, Karachi 3. All Presidents Nationalized/Private Banks 4. The IG of Police PPO, Central Police Office, Karachi 5. The IG, Motorway Police, Islamabad 6. The Post Master General, Karachi 7. Chairman PTCL, Islamabad 8. G. M Operations, Pakistan Railway, Lahore 9. MD, Sui Southern Gas Company Ltd., Karachi. 10. MD KESC/HESCO/QESCO/IESCO/Lah./Multan/Peshawar 11. Secretary Education, Government of Sindh, Karachi 12. Secretary Excise & Taxation, Government of Sindh, Karachi 13. DIG of Police, Traffic, Sindh Police, Karachi 14. Director MVR Wing, Excise & Taxation Deptt., Sindh, Karachi 15. DSPs Railways, Karachi/Multan/Peshawar/Sukkur/Quetta

Further, read with EUS Update “NARA Notifications”.

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3. ONLINE BANKING

BPRD Circular Letter No. 12 dated 14.06.2008 signed by the Senior Joint Director, Muhammad Saleem

Some incidents have been reported to State Bank of Pakistan where banks, after allowing on-line credit or cash withdrawal to the beneficiary, have reversed the entries without any cogent reasons. The reversal of the entries made by the banks was attributed to difference in signature or shortage of funds in accounts.

2. In order to protect the interest of banks, their depositors and/or to avoid any likely dispute with their depositors/ beneficiaries, it has been decided that henceforth banks offering on-line banking transactions shall take all possible measures (including compliance of Know Your Customer regulation) to ensure the genuineness of the transaction. Once the transaction is complete, no bank shall reverse the entry except in cases which are permitted under the provisions of law.

3. Since in most cases of on-line banking, the instrument presented for payment at a branch makes the paying branch to also act as a collecting and drawee branch, as such, the responsibility for verification to the genuineness of the account holder/signatures etc. shall be on that branch.

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4. SECTION 227 OF THE COMPANIES ORDINANCE, 1984 (Employees’ Provident Funds and Securities)

227. Employees’ provident funds and securities.––(1) All moneys or securities deposited with a company by its employees in pursuance of their contracts of service with the company shall be kept or deposited by the company within fifteen days from the date of deposit in a special account to be opened by the company for the purpose in a scheduled bank or in the National Saving Schemes, and no portion thereof shall be utilized by the company except for the breach of the contract of service on the part of the employee as provided in the contract and after notice to the employee concerned.

(2) Where a provident fund has been constituted by a company

for its employees or any class of its employees, all moneys contributed to such funds, whether by the company or by the employees, or received or accruing by way of interest, profit or otherwise from the date of contribution, receipt or accrual, as the case may be, shall either—

(a) be deposited—

(i) in a National Savings Scheme;

(ii) in a special account to be opened by the company

for the purpose in a scheduled bank; or

(iii) where the company itself is a scheduled bank, in a special account to be opened by the company for the purpose either in itself or in any other scheduled bank; or

(b) be invested in Government securities; or

(c) in bonds, redeemable capital, debt securities or

instruments issued by Pakistan Water and Power Development Authority and in listed securities subject to the conditions as may be prescribed by the Commission.

(3) Where a trust has been created by a company with respect

to any provident fund referred to in sub-section (2), the company shall be bound to collect the contributions of the employees concerned and pay such contributions as well as its own

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contributions, if any, to the trustees within fifteen days from the date of collection, and thereupon, the obligations laid on the company by that sub-section shall devolve on the trustees and shall be discharged by them instead of the company.

Many Statute, Statutory Rules & Orders, Notifications require such opening of accounts with Scheduled Banks etc. Such provisions may gradually be incorporated.

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EUS NOTICE BOARD

Executive Updating Service ( EUS ) takes no responsibility for any errors or omissions in its products/presentations/ updates, etc. It will be appreciated if any mistake is brought to our notice for correction henceforth. However, the Gazetted/Authority text is authentic for clear verdicts, which may be available on relevant websites. Further, overviews, comments or points etc. are given for reference only and

Clients should not rely upon or act on EUS remarks, of which

EUS is not held liable. EUS Clients/readers/viewers/visitors should consult their legal counsel for the opinions in their specific cases.

Mehdi A. Khan for Executive Updating Service (EUS )

Copy Right Reserved

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