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Central Bank Set To Tackle Money Laundering

Jun 9, 2008, 5:09 AM | Article By: By Baboucarr Senghore

The Central Bank of the Gambia has undertaken restructuring and reorganisation measures geared towards fighting against money laundering by setting up a Financial Intelligence Unit at the bank.

Charged with the responsibility of collecting, analysing and disseminating information on suspicious transactions, the unit is seen by many as a move in the right direction as it comes at a time when money laundering has been the subject of discussion in many corners of society.

According to Basiru Njie, First Deputy Governor, Central bank of the Gambia, the bank intends to partially adopt Basel II capital Accord by 2010 that will enhance banks safety as well as strengthen, stabilize and improve the sector's ability to serve as a source of sustainable growth.

"The legal and judicial framework does not ensure speedy recovery of bad debt. Given that the Mortgages Act and the Sheriffs Act (1992) cause delay in enforcing judgements, they are also being reviewed", he said.

Mr. Njie noted that the Central bank, working with government of the Gambia, is also committed to further improving the legal environment.

""The Financial Institution Act (2003) is being reviewed to not only address the deficiencies, but to transform it into the Banking Act. A Non-Bank financial Institutions Bill has also been drafted to give sufficient and clear responsibilities to the Central bank of The Gambia to effectively regulate and supervise non-bank financial institutions, including micro-finance institutions", he asserted.

Despite the constraints and the challenges besetting the sector, Mr. Njie went on, the fundamentals of the banking industry are quite strong.

"Against the backdrop of empirical and survey evidence linking finance and growth and the identification of the dearth of access as an obstacle to the expansion of the private sector, it is logical that reforms should be directed at addressing the key obstacles", Mr. Njie noted.

He however lamented that the most frequent criticisms of banks are that they take an excessively short-term approach to lending and investment. "Although the institutional structure of the banks is a contributory factor, high and variable inflation, which causes uncertainty and erodes the value of loan capital are also important explanatory factor".

The Central Bank First Deputy Governor went further to reiterate the bank's strong commitment to the implementation of prudent monetary and financial policies to sustain the macro-economic stability and the high growth trajectory.