Know your customer: this is why banks WILL ask you awkward questions
Banks are fined hundreds of millions of dollars for insufficient customer verification. This is exactly what happened with the largest bank in Pakistan, which received a $ 225 million fine and is now forced to close a branch in New York.
In early September, Habib Bank, which is the largest in Pakistan, was sentenced in New York. According to the Department of Financial Services, the bank did not conduct sufficient customer audits that are required by New York law. The bank was fined $ 225 million for not combating money laundering and financing terrorism, for ignorance in an adequate form of reporting, and they demanded to close the branch in the city.
This is not the first foreign bank in the United States, which is fined in New York. Last year, the Taiwanese bank paid 180 million.
This is a serious blow to the reputation and, of course, the business prospects of the bank. The American market is currently central, almost all the money of the world one way or another, but pass through the American banking system. Having your own branch in the States is not only prestige, but also savings.
However, non-compliance with state and local laws leads to similar consequences.
How does the history of the Pakistani bank relate to Russians and residents of the CIS?
The case of a Pakistani bank is not the only one. Control over banks is only getting stronger. Banks are forced to respond and introduce additional customer checks. They are responsible for the actions of each depositor, and if at least one of them turns out to be a criminal, a fraudster, or simply not completely honest, the bank faces punishment.
For non-compliance with standards for “money laundering” three Panamanian banks are punished with fines
Therefore, every client who comes to the bank to open an account (especially if we are talking about foreign bank accounts) comes under close supervision. Regardless of what country you come from, how large the amount is with you, and how solid you look, the bank will check all your secrets and draw your own conclusions before opening an account.
Any bank carries out meticulous customer checks. If we are talking about reputable banks in stable jurisdictions with high-quality service, broad investment opportunities, and a respectful attitude, then the requirements increase by an order of magnitude.
Opening a personal bank account at RCB Bank in Luxembourg
Do you need a reliable bank to ensure the safety of your assets? Get ready for a serious conversation with the banks.
Why do you need a foreign bank account?
However, before we talk about what awaits the future investor when working with banks, it is worth saying a few words about why it is generally necessary to open a foreign bank account.
A foreign bank account is a way to diversify and protect assets. The saying about “all the eggs in one basket” is transformed in a surprising way into reality when the economic situation worsens. Those who keep money in one bank and in one country are in an extremely dependent position: any political, social or economic upheaval can destroy the savings created during the years of hard work.
The banking sector in Russia and in other CIS countries is going through an openly painful period: cleaning up the market, reorganization and even actual defaults (International Bank of Azerbaijan, Otkrytie). Sometimes there is practically no chance to keep track of the moment in which the situation changes from conditionally stable to obviously catastrophic.
In addition, to keep money in rubles is also unsafe: the currency jumps and can depreciate in a matter of days, as it was just a couple of years ago.
Another reason to open a foreign bank account: the volume of confidential data leaks is rapidly increasing in Russia
Plus, we’ll add sanctions against Russia to the bank, periodic threats to turn off international payment cards and systems, and a slowdown in the economy as a whole.
Resolute people take decisive action to protect their own assets. One option is to open a foreign bank account. This step simultaneously solves several problems:
Reduces the risk of losing all assets that were stored in one state;
Increases the liquidity of assets – international currencies are accepted all over the world much more readily than the usual rubles;
Increases your independence;
We protect assets from raider seizures, confiscations, frost;
Raises the status;
Opens up new investment opportunities.
Prudent people have already opened foreign bank accounts. But even today they have to be careful not to lose access to such a convenient and profitable tool. Banks are closely watching not only new customers, but also old ones.
Therefore, the following principles, which we will discuss, will apply not only to those who want to open a new bank account, but also to those who plan to keep existing bank accounts.