Build your professional network on facebook via our app Go to app
 
<< Prev  3 of 7 in Topic  Next >>
Topic : How to combat Money laundering?
  Rate : 
Posted in Community :

Banking & Insurance Professionals

 
Started by : Ekta Dutta, Hedge Fund Analyst/Trader, ING Vysya Bank   04 09 2010 10:15:51 +0000
Industry : All IndustriesFunctional Area : Money Laundering, Corruption(Others)
Activity:  126 views;  last activity : 07 06 2010 20:18:09 +0000

Money Laundering has a close nexus with organized crime. Money Launderers accumulate enormous profits through drug trafficking, international frauds, arms dealing etc. Cash transactions are predominantly used for Money Laundering as they facilitate the concealment of the true ownership and origin of money.

http://www.indiadaily.org/images/hawala-racket-uae_26.jpg

It is well recognized that through the huge profits the criminals earn from drug trafficking and other illegal means, by way of money laundering could contaminate and corrupt the structure of the State at all levels, this definitely leads to corruption. Further, this adds to constant pursuit of profits and the expansion into new areas of criminal activity.

So, in what way Money Laundering is happening in India....

 
 Refer 427
Share
 
 
  Rate : 
 
 
 
 
  3 3 1 0 0
 
 
 
 
 
 
 
 
 
 
 
 
 
1 2 3 4 5
1 Hawala
2 Insurance Sector
3 Reduce Taxes
4 Hawala transactions are a necessary evil
5 Multiple bogus A/cs
6 Over Invoicing and under Invoicing
7 Open Securities Market
8 Agents- Mediators
idea posted by Ekta Dutta Hedge Fund Analyst/Trader, ING Vysya Bank

Hawala is an alternative or parallel remittance system. It exists and operates outside of, or parallel to 'traditional' banking or financial channels. It was developed in India, before the introduction of western banking practices, and is currently a major remittance system used around the world. In hawala networks the money is not moved physically.

A typical hawala transaction would be like a resident in USA of Indian origin doing some business wants to send some money to his relatives in India.The person has option either to send the money through formal channel of banking system or through the hawala system.

The commission in hawala is less than the bank charges and is without any complications for opening account or visit the bank, etc. The money reaches in to the doorstep of the person’s relative and the process is speedier and cheaper.

3
No supporting Arguments for this idea
Add your argument:

Insurance Sector

idea posted by SANGRAM Community Manager, TooStep.Com

The insurance sector is a relatively less haunted sector compared to banks and other avenues of financial services.  However, there has been a gradual increase in laundering activity in insurance as well. The Laundering in insurance is either internal or external in nature.       

The internal channels of laundering money are agent/broker premium diversion, reinsurance fraud and rented asset schemes etc. Phony insurance companies, offshore/unlicensed Internet companies, staged auto accidents, viatical and senior settlement fraud are external channels of money laundering.

3
2
  
by Nikolaj Nikolajev, Director on Board, Risku Vadiba  | 04 09 2010 14:45:35 +0000

It is not a problem to put money in the black hole.

Problem is how to return them back.

Insurance has the ideal instrument ,- damage compensation,

So, as an example, if you receive compensation due to the defamation case,the monies are back to market

Add your argument:

Reduce Taxes

idea posted by G A Narayan VP - Marketing, KE Housing P. Ltd.
  1. Reduce Taxes. Make Income Tax a flat 10%. Bring more people into the tax bracket. Then Black money that would be needed to be laundered would reduce.
  2. Use UID : Use Electronic Smart Cards for future transactions. This way, the govt. can keep track of the transactions and also reduce bribery.
  3. Bribery Control : Tuff Laws, better law enforcement and check and balance and control mechanism, etc., all these and more

or

  a total shift in the way we tackle bribery – i.e. make it official with a   rate cards for each work :-)

1
No supporting Arguments for this idea
Add your argument:

Hawala transactions are a necessary evil

idea posted by Ranjeet Rony Sanyal Marketing Manager, Group Product Manager

Hawal transactions are one of the most effective tools of finacial model, which has made the banking sector huffing and puffing.

Its the same as counterfeit brands/ pirated software/music or illegal immegrants.

One of the curse of such a system is that it wrecks havoc to legitimate business process but we cant ignore it.

India and specially countries where there is a huge parallel economy, which is funded by illegal source of money, Haval transactions can not be curtailed only by governmental agencies, but it can be minimised only through international cooperation between all the countries.

 

0
No supporting Arguments for this idea
Add your argument:

Multiple bogus A/cs

idea posted by Aditya Sharma Insurance Advisor/Analyst, LIC OF INDIA, ICICI LOMBARD

There are several ways by which money laundering is taking place. We might not be able to count all the no of ways. Some of them are OPPENING OF MULTIPLE BANK A/CS, BANK A/CS IN COOPERATIVE BANKS, TAKING MEMBERSHIP OF GROUP HOUSING SOCIETIES, ISSUE OF FAKE PURCHASE BILLS, SHOWING IN THE BOOKS THAT YOU HAVE TAKEN A LOAN FROM YOUR FRIEND OR RELATIVE, OPERATING BOGUS EXPORT OR IMPORT SOLE PROPRIETORSHIP COMPANIES, HAWALA OFCOURSE, BETTING THROUGH CONTACTS, AND THE LIST GOES ON. AND ON.

0
No supporting Arguments for this idea
Add your argument:

Over Invoicing and under Invoicing

idea posted by kanukurthy sudershanrao Operations Manager, Andhra Bank

This is prevalent in transactions between traders, companies placed in different countries

0
No supporting Arguments for this idea
Add your argument:

Open Securities Market

idea posted by Esha Johar Risk Analyst, Irevna

Money launderers have traditionally targeted banks, which accept cash and facilitate domestic and international funds transfers. However, the securities markets, which are known for their liquidity, may also be targeted by criminals seeking to hide and obscure illicit funds. Money launderers can target any of the various types of businesses that participate in securities industry. Broker-dealers, for instance, provide a variety of products and services to retail (usually individual) and institutional investors—buying and selling stocks, bonds, and mutual fund shares.

This is moreover possible due to the instruments like Hedge Funds and Participatory Notes which have very limited disclosures as to the source. These funds can be effectively used as Laundromats. Although the number of documented cases in which broker-dealer or mutual fund accounts have been used to launder money is limited, law enforcement agencies are concerned that criminals may increasingly attempt to use the securities industry to launder money. This is a new area which requires a serious thought processing.

0
No supporting Arguments for this idea
Add your argument:

Agents- Mediators

idea posted by Vipin Bhasin National Head, Hamari Property

In India, there are so many agents, mediators are available for any work. Same in this case a lot of agents are hired by people to shifting money from one place to another.. 

0
No supporting Arguments for this idea
Add your argument:

Add your Idea
Idea* : 
Add your argument:
edit in rich text ...
Could not find any idea interesting in: "In which way Money Laundering is happening in India? " ? Click here to add a new idea...

Found the idea contest "In which way Money Laundering is happening in India? "  interesting ?  Click here to refer to your connections and communities
Leading recruitment Firm
We provide manpower resources to companies and organizations in India and abroad. We aim at providing prompt, qualitative and cost effective end to end manpower solutions for our clients. Over the year’s experience, Delphic Consultants a division of Delphic Technologies Pvt. Ltd., has grown fast......
Viewers also viewed
Recently when Warren Buffett came to India he warned investors to be careful about which social...
 
1389 referals 25 arguments, 1561 views
No, only money can't bring happiness vs Yes, only money can bring happiness
 
785 referals 23 arguments, 1705 views
We have so many problems.. Many financial crisis .. insecurities and a lot more.. But still...
 
640 referals 21 arguments, 7693 views
more...  
 
More From Author
Mobile money transactions have failed to gain customers confidence is what I have read. But is it because people are not aware. If I use something which is good I will surely recomend it to someone but when I just do not know enough about the...
What happened with you is not the case everywhere and always. It is bad at the part of Bankers there. It should not take that much of time. This is unacceptable..
Mr. Srinivas has explained the whole thing very precisely. To bring inflation under control there are still many things to be done. But perhaps it is not possible for them to do all this.  
more...