Central bank to bring NBFIs under system audit from October

Siddique Islam brThe central bank will introduce risk-based audit system, generally known as system audit, to replace the existing transactions based audit for the non-banking financial institutions (NBFIs) from October next. brThe Anti-money Laundering Department of the Bangladesh Bank (BB) has sought additional manpower from the relevant department to conduct the new audit system in line with the existing core risks management guidelines. brThe central bank earlier identified four core risk areas of the NBFIs and those are credit, asset and liability, internal control and compliance and money laundering. brWe will start the system audit for the NBFIs after the Eid-ul-Fitr festival, a BB senior official told the FE Sunday, adding that the central bank also plans to gradually bring other financial institutions including insurance companies and money changers under such audit system. brUnder the audit system, the central bank will prepare a list mentioning the ranking of the NBFIs on the basis of compliance status of the core risks management guidelines. brWe earlier asked the NBFIs to comply with the core risks management guidelines properly by 2007, another BB official said, adding that the guidelines are yet to be fully complied by the NBFIs. brHe also said the central bank started such audit from March this year on trial basis. brIn 2004, the BB introduced such audit system for the commercial banks to comply with the core risks management guidelines in the banking system. brThe central bank has, meantime, met the representatives of the NBFIs to discuss about how to prepare and submit the suspicious transaction reporting (STR) to the concerned department of the central bank, officials said. brCurrently, 29 NBFIs are operating their business across the country. brWe've already strengthened our monitoring aiming to curb illegal fund transfer using banking channels in line with the new Anti-money Laundering Ordinance 2008, the BB official said. brUnder the Ordinance, the financial institutions including banks, NBFIs and insurance companies will have to instantly inform the Anti-money Laundering Department of the central bank if they detect any suspicious transaction. brAccording to the Ordinance, the central bank is authorised to penalise banks and NBFIs anywhere between Tk 10,000 and Tk 0.5 million for failure to submit reports related to money laundering. brDifferent financial institutions, including banks, NBFIs, insurance companies and money changers have been brought under the Ordinance as reporting agencies.