{"id":59265,"date":"2022-07-18T11:09:22","date_gmt":"2022-07-18T05:39:22","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=59265"},"modified":"2022-07-18T11:09:24","modified_gmt":"2022-07-18T05:39:24","slug":"what-are-the-ways-to-combat-money-laundering","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/what-are-the-ways-to-combat-money-laundering\/","title":{"rendered":"What are the ways to combat money laundering?"},"content":{"rendered":"

Recently, a spurt in the activities of the Enforcement Directorate and FIU has been observed with the rise in money laundering cases. With less than one percent conviction rate under PMLA <\/strong><\/a>cases and the incessant acts of attachment of property<\/a> by the ED, there are concerns within the industry as to what can be done on their part to prevent ED from knocking on their doors.<\/p>\n\n\n\n

This article discusses some ways NBFCs can implement their system to combat money laundering within their organisation.<\/p>\n\n\n\n

What is money laundering?<\/h2>\n\n\n\n

Money laundering is the process of disguising the source of illegal proceeds and channelising them into legal businesses through a series of activities called placement, layering and integration so that source of such proceeds cannot be traced back to their origin. These series of transactions are undertaken so that the black money invested into legal businesses can be extracted as white money, and law enforcement authorities cannot hold them liable. <\/p>\n\n\n\n

Ways to combat money laundering for NBFCs in India<\/h2>\n\n\n\n

1. Integration of auditing channels by design<\/h3>\n\n\n\n

Before initiating business operations, new NBFCs and other financial institutions must integrate auditing channels into their system. This will allow them to keep a check on their systems from the outset, thus improving the overall quality and efficiency. This process of auditing by design includes the following processes:<\/p>\n\n\n\n