Free access by bank customers to transact on-line is seen as a high risk services area
Internet banking could turn out a high risk for the Indian banking industry when the country moves towards total convertibility. Free access by bank customers to transact on-line is seen as a high risk services area, which without the necessary checks and balances, could see increase activity in money laundering.
Money laundering is a process to make illegitimate funds appear legitimate. About $ 1 trillion of illicit funds circulate worldwide, and approximately $400-500 billion is associated with the drug trade, and another $250 billion with US drugs sales.
Aside from electronic banking, high risk industries prone to money laundering include diamond, auto dealerships, travel agencies, casinos, leather goods industries, stock brokers, retail chains, art and antique dealers, and off-shore corporations, among a host of others.
Even correspondence banking is of high risk nature as clearing banks overseas depending upon Indian banks to have undertaken a proper know your customer check. Indian banks have yet to wake up to the need of
