Anti-Money Laundering Critical For All Banks

Money Laundering is like a parallel underground economy, undetected with no source. However, the risks, which earlier were just on paper, are physically now taking place. Compliance is the key to stop the menace. This issue was also discussed at length, at the recently held Banknet conference.

Major issues facing Indian banks including, money laundering, new regulations of the payment system and other such concerns, which are beginning to emerge in the Indian BFSI sector, were discussed by the panel at the conference . Anti Money Laundering was discussed and addressed not only from a regulatory concern but also from a strategic/ legal risk perspective as well. The panel also proposed effective money laundering specific customer profiling for every business relationship maintained across the institution.

AML guidelines were also discussed in detail including cross border transactions, multiple transactions etc. The panel including K. R. Murali Mohan, General Manager, Head - Alternate Channels & cards, IDBI Ltd; Pankaj Phatarphod, Executive Director, ABN Amro; And Sharad Aggarwal from Atom technologies spoke about the alternate ways of payments, the ever evolving e-commerce and m-commerce. The Bank Customer Survey on payment systems report 2008 concluded that the growth in electronic transactions in India is still in the preliminary stage. The key enablers of the growth was the growing support from RBI, upgrade in the infrastructure and the bandwidth to the end users. The increase in the educational levels and the accessibility of infrastructure at the bank end, also makes the increased use of technology in BFSI sector a key factor for growth in the future of Banking in India.

However, there was also a major growing concern of security and also the key challenge of education and training with connectivity to the most remotest part of India for the all round success of the alternate payment strategy. The panel also discussed about the challenges of cheque truncation system, the important areas of training, bandwidth and the upgrade in the infrastructure, which is needed to make it largely known and used. Sharad Aggarwal spoke specifically about the clarity in the concept of M-commerce, the term being misunderstood for mobile payments, mobile shopping and mobile banking.

The Alternate payment channels are currently facing a challenge to expand to a larger base. Improving the security requirements in all alternate payments systems and especially the emerging m-commerce and m-banking needs to be addressed and leveraged as soon as possible.