With Indian banks going global they are increasingly getting conscious of implementing anti-money laundering techniques.
A global study by KPMG Forensic has said that there is a marked shift in the attitude of senior management in India and Asia Pacific region with increasing interest and involvement of senior management in AML.
However, the task is becoming more difficult due to the increasing complexity of the financial markets in which they operate, including greater exposure to sometimes unfamiliar emerging markets and the dramatic growth of alternative assets.
KPMG study involved 224 respondents from 55 countries and 60 per cent of the banks surveyed were multinational.
Deepankar Sanwalka, head, forensic services, KPMG in India, said, ``Though banks rely on vigilance staff to identify suspicious activity but in India and some other countries of ASPAC, training is relatively unsophisticated, reflecting outdated legislation and lack of regulatory pressure.''
Seventeen per cent respondents indicate that they provide training to less than 40 per cent of their total staff. ``In India, although it is common for banks to provide training that meets the minimum regulatory requirements, the quality of some of the training taking place in the region might need to improve to bring it up to international standards,'' added Sanwalka.
The approach to the implementation of AML policies and procedures does vary across the region. In India, banks with a more global presence, tend to apply their home market requirements as a minimum standard for overseas branches and make additional provision for any local requirements which are in excess of that minimum standard.
The study adds that banks are also making greater efforts to identify politically exposed persons, who could be the conduits for laundered money.
Over 7 of 10 banks say they perform enhanced due diligence on PEPs, markedly up from the worrying low of 45 per cent three years ago. There are significant variations with only 42 per cent of banks in the Asia Pacific and only 65 per cent of banks in Europe monitoring for PEPs.