The effectiveness of anti-money laundering legislation in Islamic banking of Pakistan: experts’ opinion
| DOI | https://doi.org/10.1108/JMLC-02-2021-0014 |
| Published date | 07 May 2021 |
| Date | 07 May 2021 |
| Pages | 135-149 |
| Author | Syed Saqlain Ul Hassan,Mohammad Azam Hussain,Saima Sajid |
The effectiveness of anti-money
laundering legislation in Islamic
banking of Pakistan:
experts’opinion
Syed Saqlain Ul Hassan
School of Law, Universiti Utara Malaysia, Sintok, Malaysia
Mohammad Azam Hussain
Legal and Justice Research Centre, School of Law, Universiti Utara Malaysia,
Sintok, Malaysia, and
Saima Sajid
School of Economics, Finance and Banking, College of Business,
Universiti Utara Malaysia, Sintok, Malaysia
Abstract
Purpose –The efficient and strong financial system is considered as the backboneof the economy to
function properly along with to attract international capital flow, investment and employment. But, on
the other hand, weakness in the financial system will create negative impacts on the economy by
sabotaging society’strustinthefinancial system. In Pakistan,the key component of the financial sector
is the banking sector including conventional and Islamic banking. Pakistan isamong the pioneer of the
Islamic banking sector, its share of 15.6% deposits in the totalbanking sector. This paper aims to
analyze the effectiveness of anti-money laundering (AML) legislation in the Islamic banking sector of
Pakistan.
Design/methodology/approach –The study is doctrinal legal research.The semi-structured interview
approachfor analysis have been adopted to analyze the materials used in the study to attain the objective.The
survey approach was used in criticallyanalyzing the effectiveness of AML laws in conjunction with Islamic
banking of Pakistan by incorporatingthe expert’s views and perceptions. The interviews conducted through
electronicmedia including email, WhatsApp and LinkedIn.
Findings –The findings revealed that the State Bank of Pakistan is playing an active role and bringing
stringentupdates and regulations from time to time for the enforcementof these legislations. The irony is that
these laws are not implemented in a proper way due to a lack of coordinationamong legislative authorities
and the banking sector.
Research limitations/implications –As money laundering is an international recognizedoffense, the
study is based on only the Islamic banking sector of Pakistan. This is a very extensive and contentious
matter,and this study is impeding money laundering operationsand their analysis to the Islamic banksonly.
Practical implications –It is recommended that more efficientlaws and regulatory environments are a
needed in the Islamicbanking sector of Pakistan accompanied by proper and timelyimplementations of these
laws with the jointcollaboration of national and international agencies.
Originality/value –This is the first study that incorporated the expert’s opinion from diverse
background to analyze the effectiveness of AML legislation with special reference to the Islamic banking
sector of Pakistan and contributesignificantly in providing greater insight in improving AML legislations
in Pakistan.
Keywords Anti-money laundering, Banking, Islamic banking, Money laundering, Legislations
Paper type Research paper
Anti-money
laundering
legislation
135
Journalof Money Laundering
Control
Vol.25 No. 1, 2022
pp. 135-149
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-02-2021-0014
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
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