Tuesday, February 12, 2019

Compliance Guidelines for Money Remittance Business

In order to enter into a Money Remittance Business, one needs to understand the basics of, What actually money remittance is.

“Money Remittance is actually a transfer of money by foreign workers to their relatives in their home countries following some rules and regulations.”

A large number of Money Services Business has been expanding rapidly all over the world in the last few years. Remittance ratio is increasing day by day all across the world. Most of these remittances are sent from the developed countries to the developing ones. However, this business must be in compliance with rules and such regulations set by their several countries’ governments.

Compliance Requirements of MTSBs

1. Exchange Control Regulations and Procedures

  •  An "Application for Foreign Exchange" form should be submitted to the Central Bank.
  • Stamp duty should be collected.
  • Agents and sub-agents must keep within the authorized consent limit.
  • Inbound and Outbound transactions should be classified correctly by respective service providers.
  • The International settlements must be paid directly into a domestic local currency account.
  • Each location requires an approval to operate.
  • The following information must be provided on each transfer:
Name and address of the sender Name of Recipient
Country of origin
Date of transfer
Amount of transfer
Type of transaction

2. Anti-Money Laundering (AML)

  • Identification and verification of customers prior to the transaction are being processed.
  • Suspicious Transactions must be reported on a timely or urgent basis.
  • • Records must be managed properly.

3. Reporting Requirements

  • All information regarding clients must be submitted within 5 working days of subsequent week.
  • Stamp duties must be collected within 5 working days of subsequent week.
  • Electronic report of all transactions either inbound or outbound.
  • Monthly net settlement payments must have to reconcile with activity reports.
  • Bank statements.

4. Due Diligence

  • Provide training for staff on exchange control process.
  • Reporting requirements and money laundering issues.
  • Frontline processing of customers (i.e. know Your Customer (KYC) principle).
  • Procedures for monitoring or detecting suspicious transaction.
  • Having a compliance manual in place and ensure that all employees and subagents are following that.

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