RBI asks banks to stay vigilant against smurfing, money muling-Business Standard
Smurfing is a practice by which cash is broken into smaller deposits of money to defeat suspicion of money laundering
The Reserve Bank of India (RBI)'s Executive Director P Vijaya Bhaskar on Friday asked banks to stay vigilant against smurfing and money muling.
Smurfing is a practice by which cash is broken into smaller deposits of money to defeat suspicion of money laundering and avoid anti-money laundering reporting requirements. Money muling, on the other hand, occurs when money launderers use someone else's bank account to deposit and transfer money.
Bhaskar was speaking at a conference organised by the Confederation of Indian Industry(CII) in Kolkata.
He added that lenders should have a single information-sharing system that will allow them to scrutinise customers' information and prevent money launderers from opening multiple accounts with different banks using different identity documents.
He declined to offer any comments on monetary policy actions. “There was one point in the introduction, which said I should also speak about monetary policy. That is the last thing I will do because September 30 is the day (when RBI will announce its next bi-monthly monetary policy)...So on that I will keep a meaningful silence,” he said.
Smurfing is a practice by which cash is broken into smaller deposits of money to defeat suspicion of money laundering and avoid anti-money laundering reporting requirements. Money muling, on the other hand, occurs when money launderers use someone else's bank account to deposit and transfer money.
Bhaskar was speaking at a conference organised by the Confederation of Indian Industry(CII) in Kolkata.
He added that lenders should have a single information-sharing system that will allow them to scrutinise customers' information and prevent money launderers from opening multiple accounts with different banks using different identity documents.
He declined to offer any comments on monetary policy actions. “There was one point in the introduction, which said I should also speak about monetary policy. That is the last thing I will do because September 30 is the day (when RBI will announce its next bi-monthly monetary policy)...So on that I will keep a meaningful silence,” he said.
Banks to be careful about Jan Dhan Yojana: RBI
The Reserve Bank on Friday warned the banks to be more careful while opening accounts under the Jan-Dhan Yojana, saying that a single individual could open multiple accounts in the lure of Rs 1 lakh insurance cover.
“There are some caveats when the banks are implementing the financial inclusion scheme under the recently launched Jan-Dhan programme,” RBI Executive Director P Vijay Bhaskar said at a CII seminar in Kolkata on Friday.
He said people could open accounts in different banks using different identity documents like PAN card, Aadhar among others in the lure of getting insurance cover of Rs 1 lakh from all the banks.
The banks should have a single information sharing system by which this possible misuse could be stopped. Another possible threat was ‘smurfing’, the RBI official said.
In this case, hawala operators would spilt the whole amount into several small units beyond the threshold using several bank accounts and send money overseas.
The last was ‘money mules’ by which an individual would operate through another person’s bank account.
Talking about the north-eastern region, he said the SLBCs and the SLCCs should take steps to improve the credit-deposit ratio of the region as the CD ratio was much lower than the national average.
Earlier this week, RBI Governor Raghuram Rajan had cautioned banks on the risks involved in just hunting for numbers with regards to Jan Dhan scheme, asking them not to compromise on core objectives of the programme.
“When we roll out the scheme, we have to make sure it does not go off the track. The target is universality, not just speed and numbers,” Dr Rajan had said.
The scheme can be a “waste” if it leads to duplication of accounts, if no transaction happens on the new accounts and if the new users get bad experiences, he had added.
No comments:
Post a Comment