Sri Lanka central bank raps two finance companies over due diligence

ECONOMYNEXT – Sri Lanka’s central bank said two finance companies have been penalised for lax customer due diligence by the Financial Intelligence Unit.

The central bank of Sri Lanka (CBSL) said the regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), FIU collected penalties amounting to 1.5 million rupees in total for the period from 1 October 2021 to 31 December 2021.

Orient Finance, a subsidiary of the Janashakthi Insurance has been fined one million rupees.

Another Financial institute named Lanka Credit and Business Finance had been charged with five hundred thousand.

CBSL said both companies were penalized for non-compliance with the Financial Institutions (Customer Due Diligence) Rules, No. 1 of 2016 (CDD Rules) in relation to procedures of United Nation’s sanctions screening.

“It was observed during the on-site examination that Orient Finance PLC had failed to implement systems and procedures to maintain the complete list of designated persons and entities under relevant United Nations Security Council Resolutions screen its prospective customers at the time of onboarding as required by the CDD Rule,” CBSL said.

CBSL said it is necessary to screen the existing customer base or existing business relationships when any of the relevant UNSCR lists were updated in order to ensure that no business relationship was held by or linked to any of the entities or individuals included in the updated designated lists. (Colombo/Jun29/2022)