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Channel: Emerald Group Publishing Limited: Journal of Money Laundering Control: Table of Contents
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Suspicious transaction reporting: An Indian experience

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Journal of Money Laundering Control, Volume 18, Issue 1, January 2015.
Purpose The main emphasis of financial action task force (FATF) guidelines on anti-money laundering (AML) and countering of financing of terrorism (CFT) is the obligation of financial institutions and designated non-financial businesses and professions (DNFBPs) to instantaneously report the suspicious transactions to Financial Intelligence Unit (FIU), an agency with a mandate to deal with AML. The purpose of this paper is to assess the effectiveness of AML reporting system in India in terms of Suspicious Transaction Reports (STRs) and its impact on countering money laundering through the conviction and confiscation. Design/methodology/approach It is a descriptive study to explore the outcome of AML process. The study has used the secondary information published in the annual reports of FIU-India and FATF. The study period is 2006-07 to 2011-12. Findings Though there is a significant increase in the STRs filed, the impact of AML is not realized in terms of neither AML related convictions nor confiscations, since the enactment of Prevention of Money Laundering Act (PMLA). The AML/CFT regime in India has just started earnestly, however, still it has to go long way before stabilizing and achieve tangible results. Research limitations/implications In the Indian context, only few of the effectiveness indicators of the FATF methodology 2013 could be selected due to the limited availability of data, as much of the information maintained by various stakeholders including reporting entities, FIU-India, and other investigative and enforcement agencies, is kept confidential. Thus it is difficult to establish the effectiveness of enforcement function of AML. Evaluation of effectiveness of AML is judged on the basis of convictions and confiscations. Originality/value There is a dearth of studies assessing the reporting system under PMLA and hence this paper attempts to throw some insights on the outcome of AML chain, especially the impact of reporting suspicious transactions.

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