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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.
