Summary |
Money laundering is a type of financial crime that poses greater risk and challenges to the financial sector. Money laundering involves the processing of criminal proceeds in order to disguise their illegal origin. Often this requires the usage of the products and the delivery channels offered by the financial sector and disrupts the financial stability, as it can lead to severe disturbances in the normal social life. Increasing instances of money laundering and the growing vulnerability of the financial sector in the process makes it imperative for the players in the financial markets, such as banks and insurance companies, to guard themselves against the menace of money laundering.
Internationally, money laundering has been considered as a threat to the national security and economic activity as it is often associated with the financing of terrorism and also evasion of taxes. This increases the attention of the regulatory and statutory authorities to prescribe guidelines/rules to ensure that the financial sector does not contribute to the money laundering process either intentionally or unintentionally. Compliance with these statutory/regulatory provisions is, therefore, a key challenge to the financial sector entities in the present day scenario.
|
