Reserve Bank of India issued ‘Internal Risk Assessment Guidance’ for Money Laundering/Terrorist Financing Risks’ | Current Affairs | Vision IAS
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    Reserve Bank of India issued ‘Internal Risk Assessment Guidance’ for Money Laundering/Terrorist Financing Risks’

    Posted 18 Nov 2024

    2 min read

    Reserve Bank of India issued ‘Internal Risk Assessment Guidance’ for Money Laundering/Terrorist Financing Risks’

    Key Focus of guidelines

    • Focus on a data driven quantitative approach to  frauds.
    • Stress on the risk-based framework in its entirety with compliance, due diligence, and continuous monitoring.

    Relevance of Guidelines

    • Increasing Incidents: RBI Annual Report 2023-24 shows that the total number of fraud cases jumped from 13,564 in 2022-23 to 36,075 in 2023-24.
    • Loss to global GDP: The United Nations Office on Drugs and Crime estimates that between $800 billion and $2 trillion is laundered globally each year, which is 2–5% of the global GDP.

    Risks associated to financial system with ML/TF

    • Political: Weakening countries and affecting stability.
    • Security: Internal and external, terrorism and terrorist financing threats, including related to ISIL or Al Qaeda.
    • Economic: Credit Frauds with bank's money used for illegitimate activities thereby circumventing finances for other economic sectors. 
    • Social: Affecting the social harmony, communal tensions, crimes.

    Initiatives taken for ML/TF

    • Global
      • The International Convention against Transnational Organized Crime (2000; the Palermo Convention)
      • FATF anti-money laundering and counter-terrorist financing (AML/CFT) framework
    • India
      • The Prevention of Money Laundering Act, 2002 (PMLA)
      • Financial Intelligence Unit (FIU-IND), Enforcement Directorate (ED)
      • Foreign Exchange Management Act, 2000, (FEMA)
    • Tags :
    • Money Laundering
    • Terrorist Financing
    • FATF
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