Financial Crime World

Afghanistan’s Council of DAB and EMI Regulations: A Step Towards Financial Stability

Introduction

In a bid to enhance financial stability and prevent illicit activities, the Council of DAB (Da Afghanistan Bank) has introduced regulations governing Electronic Money Institutions (EMIs). The move is seen as a crucial step towards combating money laundering and terrorist financing.

Definition of EMI

According to the new regulations, an EMI is defined as a legal entity that accepts banknotes, coins, or other means of payment in exchange for e-money, and facilitates the transfer of e-money to make payments. This definition covers entities that provide electronic payment services, such as mobile wallets and prepaid cards.

Guidelines for EMIs

The Council of DAB has issued guidelines for EMIs, which include requirements for:

  • Registration: EMIs must register with the Council of DAB before operating in Afghanistan.
  • Licensing: EMIs must obtain a license from the Council of DAB to operate in Afghanistan.
  • Ongoing Supervision: EMIs are subject to ongoing supervision by the Council of DAB to ensure compliance with regulations.

Requirements for EMIs

The guidelines require EMIs to:

  • Conduct Customer Due Diligence (CDD) on all customers, including identification and verification of their identity and source of funds.
  • Implement Transaction Monitoring systems to detect and report suspicious transactions.
  • Report Suspicious Transactions to the Financial Intelligence Unit (FIU).

Sanctions

The regulations provide for sanctions against EMIs that fail to comply with these requirements.

Guidelines for Other Financial Institutions

In addition to the EMI regulations, the Council of DAB has also issued guidelines for other financial institutions, including:

  • Commercial Banks: Commercial banks must adhere to international standards for anti-money laundering and combating the financing of terrorism.
  • Microfinance Institutions: Microfinance institutions must also comply with international standards for anti-money laundering and combating the financing of terrorism.

Impact

The introduction of these regulations is seen as a major step towards enhancing financial stability in Afghanistan. It is expected to help prevent illicit activities, such as money laundering and terrorist financing, while also promoting economic growth and development.

Resources

For more information on the Council of DAB and EMI regulations, please visit: