Financial systemic frauds in banking sector and money laundering cataclysm: Indian realism wits

Abstract

Financial systemic frauds are growing concern which directly affects the economy of country not only nationally but internationally. Today banking frauds are high in the country which leads question on banking regulatory system and initiative of monitoring and risk assessment. Another important concern is of money laundering by high profile culprits in sophisticated way indulging in illegal transactions. The focus of paper is mainly on issues of financial frauds in banking sector and money laundering analysis. Fraudster are exploiting vulnerabilities that has being opened during Covid -19 pandemic lockdown, increasing risks of cyber-attacks using various modus operandi. Covid -19 effect on banking sector and regulatory bodies concern relating to threats of evolving risks due to online transactions which is continuing threat of fraudster to victimize the not so techno-savvy lay man. During this entire pandemic FATF recommendation and statements particularly emphasizing on criminal activities alert to member countries wherein they advised to detect and report suspicious transactions of money laundering and terrorist financing risks. Customer due diligence (CDD) requisite which is laid down by RBI initiative to identify banking transactions for banking frauds, money laundering and terrorist financing. During the past one year RBI amended its master direction dealing with KYC norms for banking sector taking into account the pandemic situation. Pandemic became a favourable environment for financial criminality for fraudsters who have healthy ground to commit the crimes. Role of governing bodies to tackle and curb this financial systemic fraud and cases filed under various legislations will be analyzed. Key word: money laundering, financial fraud, banking fraud, CDD, covid-19.