Documentation & Narrative make SAR meaningful
There are often connecting dots between criminal activity and financial transactions:
Ch hay aP andy a is Assistant General Manager (Accounts) at Ahmedabad-based Gujarat State Cooperative Bank and has been working with the apex level state cooperative bank for the last 30 years. During her banking career, she has handled advances, investment and banking divisions and reported CRT, STR & other statutory returns to the Income Tax Department and regulators from time to time. She has contributed in the preparation for implementation of various policies for KYC, deposits, ALM, risk management policy and compliance in the bank. Currently, she is handling all types of audits and compliance including statutory audit, internal audit as well as tax audit. She also has been involved in the preparation of financials and other (MIS) reports. And as a special task, she handles monitoring on the timely and accurately submission of all types of statutory returns to the regulators.
TIMELY FILINGS
Timely filing of SAR, or Suspicious Activity Reports, help users to identify and respond promptly to potential criminal activities. Chhaya Pandya says the bank files on an average 4 statutory reports every month. She says late filing of SARs can be particularly detrimental when terrorist financing is suspected, where asset seizures are possible, or when significant fraud threatens the viability of a depository institution. For faster process, the bank managements should be encouraged to contact law enforcement agencies directly to ensure immediate attention to the matter.”
RISK MANAGEMENT, TECHNOLOGY
On a micro level, it is beneficial for banks and financial institutions to establish comprehensive procedures for SAR preparation, reviews, and approvals, she says, adding: “It is important for financial institutions to establish strong overall risk management practices, effective policies and procedures, strong management information systems, appropriate staffing and senior management over-sight, comprehensive training and periodic independent testing. Financial institutions should design AML programs on a riskbasis and arrange training on recognizing suspicious activity, so as to maintain an effective AML compliance program, as well as protect the institution from potential abuse by criminals.”
The bank uses CBS solution from Tata Consultancy Services. Its IT team consists of 32 persons, and 4 employees are allotted for SAR functions.
CONNECTING DOTS
According to Chhaya, there are certain suspicious activities, which are easy to catch and certain which are difficult to catch. Financial connections to crime, terrorism, drug trafficking, money laundering, bank fraud and other financial crimes are common patterns of suspicious activity, says she.
Elaborating, she says: “There are often connecting dots between criminal activity and the financial transactions. Further, incomplete, incorrect, illogical, or disorganized narratives can make analysis difficult and adversely affect users’ decisions and they do not describe suspect relationships or do not explain the nature of ongoing suspicious activity, which can reduce the effectiveness of searches. If the information contained in tables, spreadsheets and similar attachments is not punched into the database, then it becomes difficult to catch suspicious activity pattern.”
DOCUMENTATION, NARRATIVE
Chhaya says there are certain steps that can help to achieve higher targets and make better plans for complete and appropriate SAR information: Collect, organize and maintain data/information through research and analysis to gather as much information as possible about the potentially suspicious activity. Generally, the guidance indicates that the filing institution should consider all pertinent information it has received through the account opening process and due diligence efforts.
She says: “One should prepare a complete and sufficient SAR, the narrative should provide extensive tips on what information to collect and how to organize it effectively. SAR should be complete as fully as possible. With the suspected activity, SAR supporting documentation should be described in the SAR narrative and should refer to all documents or records that assist a financial institution in making the determination that certain activity requires a SAR filing. Documentation may include transaction records, new account information, tape recordings, e-mail messages, and correspondence, account opening information for all suspects, account statements for all affected product types, photocopies (front and back) of all applicable financial instruments associated with the suspicious movement of funds, including monetary instruments and deposit receipts. Our in-house IT team generates SARs.”
Arunachal Pradesh Rural Bank, a scheduled bank, established on 30 November 1983, is sponsored by State Bank of India. The bank, situated in the trans-Himalayan region, with wide variation in scenic beauty from the plains of Brahmaputra valley to the snow-clad mountains in the north, has head office at district Papum Pare. The bank is committed to provide banking facilities to all segment of the population with a branch network of 28 branches. The bank has several departments at the head office, most of which are headed by women officers under the leadership of chairman Dr Deepak Kumar Gupta.
CENTRAL PROCESSING CLICKS
Tasso Yaming is a Credit Officer of Arunachal Pradesh Rural Bank. She has been heading the CLPC (centralized loan processing cell) team and has 3 employees working under her. The bank started the CLPC in the year 2018 under the guidance of its Chairman Dr. Gupta and General Manager Pradeep Kumar Paul.
Tasso narrates her role and gives backdrop of CLPC: “I have been entrusted with the responsibility of monitoring the proposal received by the branches and to scrutinize them. The actual sanction is done by the Sanctions Committee. Nowadays credit is one of the most important section of banking industries and to make it more advance and comfortable towards the customers, we have CLPC for the convenience of branches. Here our main objective is to give the best service to our valuable customers by following TAT for sanctioning of loan. For a personal loan, we take only 3 days and for a home loan, only 14 days.”
GROWING ADVANCES
Branches of Arunachal Pradesh Rural Bank source proposals by sending scanned soft copy and hard copy through mail or post after completing all due diligence from their side. Tasso explains: “We take a printout and after scrutinizing the proposals, the committee members sanction or control the proposal. In CLPC, we work as a team benefiting our customers without any hassle of huge paper works because most of the processes have been automated.”
Prior to CLPC, as on 31 March 2018 the total advance was `1.77 billion and it grew to `1.96 billion as on 31 March 2019 and to `2 billion as on 31 March 2020, showing a yoy growth rate of 10.8% and 1.7% respectively. Some home loans qualify under PSL, such as affordable housing finance. After CLPC, that has become possible.
“In 2018, the total sanctioned amount was `53.6 million but by March 2019 it increased to `119.2 million and of late it has reached `189.7 million in January 2021. This has been an achievement for the team and a good sign for our institution for future prospects. After sanctioning of the proposal to the branches, we also follow up and monitor those loans for regular repayment. This way, the bank’s NPA level is controlled. APRB is serving their customers with great dedication thereby extending a helping hand for their happier life,” she added.
MAINTAINING CRR, SLR
Cholom Lammaty, 37 years old and a mother of 2, has been heading the department of Accounts and Treasury of Arunachal Pradesh Rural Bank since 2018. She reveals the history of the department: “Our bank has been actively managing its treasury since the inception ie. since 1983 by women officials only. Currently, we are 2 officers in this department. Our bank is improving in many factors slowly but steadily.”
There was a time when CRAR of the bank was 6.73% in 2015-16. It increased in the following years as 9.88% (201819) and 10.25% (2019-20). Cholom underlines: “Whereas now in the current FY, we have been maintaining CRAR of 10.01 as on December 2020 quarter.”
The bank has its investment advisory agreement with SBI DFHI and its investments committee which guides and helps the department of Accounts and Treasury in dealing with investments of the bank. Cholom claims: “We have
Tasso Yaming explains how the bank aims to enhance customer service by sanctioning loans under defined TAT
never failed in maintaining our CRR and SLR and all the returns are filed online timely and offline whichever is necessary. Further, I’d also like to add one important figure which we have continuously tried to minimize in these years, that is our accumulated loss, which from `360.8 mn has dropped down to `325.6 mn as on December 2020. With all these facts and figures, I’d like to conclude here that I will continue to give my best with the dedication and commitment towards my bank for all the years to come by.”
ATM, MICRO ATM, SOLAR VSAT
Mansi Bansal heads the Information Technology department of Arunachal Pradesh Rural Bank with the responsibility of maintaining the IT infrastructure and software management of all the 31 branches of the bank. She, along with her team of 2 officers have been successful in launching new branch in Nacho, Upper Subansiri district with collective efforts. Mansi provides recent updates: “We have taken up several IT initiatives and are working towards many new technologies. We have been successful in installing the first ever
ATM machine in Sagalee, in Papum Pare district. We are under process of installing a number of micro-ATMs at all our branches, which will reduce burden on our staffers and will help them manage the crowd more effectively. We have also deployed solar UPS and solar VSATs in our remote branches, which have negligible connectivity and electricity.”
TECH UPGRADATION
The bank also has been successful in replacing maximum systems in its branches with all-in-one desktops and in launching personalized cheque books, printing of which takes place in the head office. Mansi points out: “We have been working on the latest upgraded version of Windows 10. We have also been successful in launching CTS scanning. We are also live on Central KYC Registry, wherein the data of the customers is maintained centrally which is helping in complying with our KYC norms. The bank is introducing new technologies with multiple channels to provide banking services and insurances through banassurance channels with SBI Life Insurance and SBI General Insurance to the people of Arunachal Pradesh.”
IT PLANS
The bank has also framed policies relating to internet banking, mobile banking and cyber security. Mansi further reveals: “We will also be going live on UPI and AEPS very soon. We are continuously striving our best to secure the IT infrastructure of our bank and will continue implementing upgraded technologies for the betterment. We have been a successful organization and are relentlessly trying to work for our customers bringing in new initiatives every now and then to help provide better customer service and greater employee satisfaction.”
Cholom Lammaty points out that the bank has been actively managing its treasury since 1983 by women officials only
Mansi Bansal reveals plans to go live on UPI and AEPS very soon