Banks inefficient to battle money laundering: Survey

Mumbai, Aug 16 (UNI) Increasing complexity of financial markets and greater exposure to unfamiliar emerging markets is making banks inefficient to battle money laundering, said a survey.

The cost of fighting money laundering has risen dramatically as bankers across the world are increasingly engaged in the struggle against criminality.

According to the survey made by KPMG Forensic among 224 banks from 55 countries, banks' spending on anti-money laundering systems (AML) has multipled by 58 per cent in last three years with the biggest spending on transaction monitoring and staff training.

Banks, which had underestimated their likely spending levels in AML three years back, are now over-optimistic by predicting an increase of 34 per cent by 2010, says the study.

However, nearly 71 per cent of banks, which took part in the survey, believe that the involvement of their directors in AML has gone up as against 61 per cent in 2004.

''Though banks rely on vigilance staff, in India, training is relatively unsophisticatetd, reflecting outdated legislation and lack of regulatory pressure,'' according to KPMG head of forensic services Deepanker Sanwalka.

Banks are also making greater efforts to identify politically exposed persons (PEPs) who are often posing as the conduits of laundered money. While 89 per cent of the banks in UK are monitoring PEPs, the figure is a mere 42 per cent for banks in Asia Pacific region.

UNI