Co-operative Banks Have Feeble Anti-money Laundering Mechanism

By : 24-Jan-2017
Co-operative Banks Anti-money Laundering Combating

NEW DELHI: The cooperative banks of India constitute approximately 3.25% of the entire banking sector. On the scale of 0-10, the vulnerability of the money laundering processes in any cooperative bank is measured at 0.39 with zero being unsafe in the scale of measurement.

Reports claim that all the cooperative bank employees lack with the potential knowledge of anti-money laundering protocol and regulations.

The multi-agency analysis survey conducted by the Enforcement Directorate (ED) with the coordination of the Financial Intelligence Unit (FIU), Income Tax department and CBI  has stated that the Cooperative bank staffs in particular is observed to be more fragile in overseeing anti-money laundering (AML) and combating terrorist financing (CFT) predicament.

Though the reports confirm about the large number of suspicious transactions report (STR) but still do not have substantial proof of evidence with respect to the cooperative banks.

The research analysts states that the cooperative banks are confronting with major shortcomings.

They admitted that one of the limitations the aforesaid banks are presently coping with is the independent identification infrastructure itself.

Out of the 6 Officially Valid Documents (OVD), only 2 of the papers including the Aadhaar and PAN card are known to be verifiable.

The report ironically confirmed that it was difficult to assess the veracity of the information of other OVDs such as NREGA card, driving licence, and a few others.

Related Articles