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Customers will be questioned regarding transactions exceeding 50K | 23 February 2021

Customers will be questioned regarding transactions exceeding 50K

(L to r) Messrs Leong-Pon, Rampal and Moustache during the press conference yesterday (Photo: Thomas Meriton)

Recently banks have been asking their customers the purpose of their cash withdrawals and this has raised some confusion as clients were worried about the amount of information they have to give and why they have to do it.

To address these concerns a press conference was held yesterday afternoon by Aaron Leong-Pon, director Financial Surveillance Division at the Central Bank of Seychelles; Richard Rampal, director of Financial Intelligence Unit (FIU) and Phillip Moustache, chairman of the Seychelles Bankers Association (SBA).

“We have a new law that seeks to combat money laundering and terrorism financing that was introduced in August 2020 and in this new law there are many requirements that have been imposed on banks and its entities,” said Mr Rampal.

He added that there have also been areas that have been improved to make sure that our laws are up to date with international law.

Mr Rampal added that an assessment was made where it was found out that there exist a lot of discrepancies in Seychelles law regarding financial activities that are ongoing in the country.

“This new law is to protect our financial sector and make sure that it is not being used for crime,” Mr Rampal said.

“One thing that people need to understand is that this will help our economy and financial sector by providing transparency to investors as they will know that there are measures in place to safeguard their interests,” added Mr Rampal.

He added that in the beginning some banks were asking for declarations from all their customers which were not required. However last week a meeting was held with all parties concerned where they came up with a solution.

The FIU director added that transactions above fifty thousand (50,000) or multiple transactions over the course of a day will be reported to FIU.

“Fifty thousand was an established amount that we set in order to establish a pattern,” he said.

“Although banks will require declarations from clients, it will not be necessary for them to ask a customer who for example is withdrawing R2,000 the purpose of their withdrawal each time they do it,” said Mr Rampal.

He further added that in the new law the relationship between banks and clients should be made on a risk based approach by establishing if their clients are low risk or high risk.

“If a customer is low risk then the bank won't require much information when it comes to transactions. However if a customer is high risk then the bank will have to be diligent in monitoring those clients’ financial activities,” Mr Rampal said.

Regarding online transactions and ATM, Mr Rampal said that there are two requirements in the law which address this. First, there are cash threshold transaction reporting and second wire transfer reporting.

“Any activity that someone is doing with a bank there is reporting even with ATMs as it leaves a digital footprint which is recorded by the bank,” he said.

Mr Moustache noted that they have made recommendations for public education on the requirements of the new law, adding it is important that clients update their information whenever there is a change regarding employment, address, whether they are on any boards or renting out properties.

“When you open an account you have to declare how much money will be entering the account, so if the bank notices that there are additional cash transfers happening on the account those customers will be under suspicion if they had not updated their account,” said Mr Moustache.

He added that it is important for clients to update their information every year.

On his part Mr Leong-Pon noted that the information being collected is important, albeit the manner it had been executed may not have been the best. However it does not defeat its purpose.

“Since the law has been enforced we have found that there have been many reports from banks and other entities. We have also made many referrals to law enforcement authorities for further actions. We are on the right track and we will see the results soon enough,” concluded Mr Rampal.


Christophe Zialor

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