Philippines Tightens Know-Your-Employee Rules for Banks

The Philippine central bank has approved rules that will strengthen banks’ know-your-employee procedures as financial frauds surge during the pandemic.

Banks and financial institutions must adopt a risk-focused screening which considers sensitivities of positions that may require stringent procedures, the Bangko Sentral ng Pilipinas said in a statement. There must be adequate understanding of a candidate’s background and character, conflict of interest and “propensity to commit fraud or irregularity,” it said, adding central bank records should be used in the screening process.

The Philippines in November said it had seen a surge in financial scams as digital platforms became widely used during the coronavirus pandemic.

The Southeast Asian nation was thrust into the spotlight in 2016 when a former Rizal Commercial Banking Corp. branch manager was found guilty of helping launder $81 million stolen from the Bangladesh central bank. In 2020, BDO Unibank Inc. and Bank of the Philippine Islands said rogue employees falsified documents purporting to show the now defunct Wirecard AG had deposit accounts at two of the country’s largest lenders.

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