Financial Crime World

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Swaziland’s Banks Take a Stand Against Money Laundering

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Swaziland’s banks are taking bold steps to prevent money laundering and ensure financial stability in the kingdom. The Financial Regulation Department (FRD) of the Bank of Swaziland plays a crucial role in regulating and supervising banks and other financial institutions.

Implementing International Standards

The FRD is responsible for implementing international standards, including the Core Principles for Effective Banking Supervision issued by the Basel Committee on Banking Supervision. To achieve this, the department has divided its functions into several units, each with distinct responsibilities.

Units of the Financial Regulation Department

  • Banking Supervision Division (BSD): responsible for supervising banks and ensuring their compliance with prudential standards such as capital adequacy, asset quality, risk management, liquidity, and funds management. The division also conducts onsite and offsite approaches to banking supervision, monitoring banks’ control systems, activities, and financial conditions to safeguard the safety of depositors’ funds and the soundness of the financial sector.
  • Financial Surveillance Division (FSD): responsible for monitoring exchange controls in Swaziland and ensuring the integrity of the financial system. The division administers exchange control regulations, receives and analyzes information on cross-border foreign exchange transactions, and licenses authorized dealers with limited authority.
    • Housed within the FSD is the Anti-Money Laundering Unit (AMLU), which is responsible for combating money laundering, financing of terrorism, and proliferation financing of weapons of mass destruction. The AMLU has adopted a risk-based approach to identification, understanding, assessment, and mitigation of these risks in the banking sector.
  • Policy & Enforcement Division (PED): formulates financial policies for sector institutions, reviews and updates regulatory frameworks, and implements enforcement actions on regulated institutions. The PED also reviews and analyzes license applications in consultation with other divisions within FRD and other departments of the Bank.
  • Market Conduct & Consumer Protection Unit: ensures that banks and other financial services providers have market conduct-related policies and practices that comply with applicable regulatory frameworks. This division promotes an appropriate degree of protection and fair treatment of consumers, enhances the integrity of the financial system, and promotes effective competition in the interest of consumers.
  • Financial Stability Unit (FSU): assesses systemic risk in the financial system, working with other stakeholders to ensure that the kingdom’s financial system is capable of withstanding internal and external shocks. The FSU collects and analyzes financial data, identifying vulnerabilities in the financial system and disseminating its findings through the annual Financial Stability Report.

Conclusion

In summary, Swaziland’s banks are taking a proactive approach to prevent money laundering and ensure financial stability in the kingdom. With the FRD’s rigorous regulatory framework in place, the banking sector is well-positioned to withstand internal and external shocks and promote confidence in the system.