SBP directs banks to open accounts of mosques, seminaries within 5 days

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KARACHI: While issuing a circular to heads of all the banks in Pakistan the Central Bank has asked them to ensure legal formalities to end discrimination in opening accounts for mosques after completing the necessary details of NGOs, trusts, or other institutions.

A private television reported on Friday saying the directive came after the leaders of religious madrasas met with Prime Minister (PM) Shehbaz Sharif on January 6 to discuss obstacles in opening of bank accounts of mosques and madrasas. In response to these concerns, the PM decided to get all obstacles removed.

The State Bank of Pakistan (SBP) anti-money laundering department, combating the finance of terrorism department has also directed that the bank accounts of the mosques should be opened within five days after completion of the required documents. However, the circular did not mention religious madrasahs along with the mosques, but sources reported that in majority of the cases there exist madrasahs with mosques.

According to the SBP, denial from opening the bank accounts of mosques is a violation of the policy through which the maximum population of Pakistan contributes to the banking sector. The restrictions and monitoring of the Financial Action Task Force (FATF) has led to difficulties in opening bank accounts for mosques and religious schools, while many have been closed.

It is pertinent to mention during its plenary meeting held in Paris, France from 20-21 October 2022, the FATF has decided by consensus that Pakistan has completed all substantial, technical and procedural requirements of both 2018 and 2021 Action Plans. As a result, Pakistan has been taken out of the list of jurisdictions under increased monitoring, with immediate effect.

The SBP’s directive is seen as a step towards resolving these issues and ensuring that all institutions, including mosques and madrasas; have equal access to banking services. However, the SBP also assured that all necessary legal requirements will be fulfilled for the opening of bank accounts of worship places; and urged banks to comply with the directive as the earliest.