FIs favour anti-money laundering regime

Indian financial institutions are under increasing scrutiny of local and international regulators for implementation of anti-money laundering regime and providing some sort of training to staff for reducing risk of money laundering, a survey conducted by research firm KPMG said.

The survey, conducted among 100 FIs, including banks and insurance companies, said that banks felt industry standards and best practices laid down by international bodies such as World Bank, IMF and Financial Action Task Force and Basel Committee were essentially for financial institutions to develop their own policies and procedures, KPMG associate director Colin Lobo said on Tuesday.

Indian Banks' Association Chairman H N Sinor said AML regime was in the first stage of implementation in India and it would take time for processes to settle down.

Lobo said increased regulations and recognition by financial institutions to preserve their reputations make investments in robust anti-money laundering system vital.

The survey said training of staff is a key to reduce risk of money laundering and a majority of respondents have provided some form of training to the staff.

It clearly indicates that issue of money laundering and damage it can cause an institution is becoming increasingly important for senior management who value brand and reputation, he said.