"The law enforcement and security agencies lack proper training to investigate the financing of terrorist activities," a finance ministry statement said after Finance Minister Ishaq Dar held a high level meeting here on Tuesday.
Prime Minister Nawaz Sharif has directed all financial institutions of the country to monitor funding of terrorists in the country in the aftermath of the Peshawar school massacre in which 150 people, mostly children, were killed.
"The finance ministry, State Bank and commercial banks must monitor funding of terrorists and militant organisations in the country. We will have to stop their funding," the Prime Minister has said.
Acting on the Premier's directive, Dar held a high-level meeting and asked the participants to finalise their proposals to prevent financing for terrorists and militant organisations in the country.
"The focus of security agencies was more on nabbing terrorists rather than looking for their sponsors, which was the root cause of the problem. There was also no system to maintain consolidated data on prosecutions carried out by law enforcement, which could be shared by the agencies to further help their investigation," the meeting was told.
The meeting discussed terrorist funding under the garb of charities, emphasising fresh registration and fool proof monitoring of all such organisations.
Deep concern on narcotics trafficking, which it thought was a potent source of funding, was also discussed at the meeting. There was also an emphasis laid on coordination with international agencies to curb terror financing.
Dar said in the current scenario National Counter Terrorism Authority (NACTA) should assume the leading role in gathering and consolidation of data for use by law enforcement agencies.
The absence of proper legislation to regulate and monitor international non-governmental organisations (INGOs) working in the country has added to the problems faced by investigators, the participants of the meeting were quoted by Dawn News as saying.
There was the consensus among the participants of the meeting that under the prevalent legal system, investigators, police, FIA etc, rarely invoked specific provisions relating to funding of terrorism as contained in the Anti-Terrorism Act and anti-money laundering laws.
Dar urged a sub-committee to finalise recommendations which were practicable and could prove decisive in rooting out terrorist funding.
"We need coordination between the federal and provincial governments and agencies to deal with the problem of terrorist financing. We also need cooperation from the general public to put an end to this problem," Dar said.
There was also a need to promote legal channels for transfer of money within and from outside the country, he said adding that "it will help us to completely discourage hawala and hundi system."