"A STUDY ON IMPACT OF ANTI MONEY LAUNDERING ON THE BANKING INDUSTRY OF PAKISTAN”

Abstract

Purpose - The primary purpose of this study is to comprehend and determine the impact ML (Money Laundry) has on the economy and specifically on the banking industry of Pakistan. Also, the measures adopted by banks to counter it. Since 9/11 money laundering has been highlighted and given grave prominence as it is one of the biggest corporate crimes and has huge impact on the economies of countries. Our focus will be primarily on Pakistan but we will visit other countries that have been affected by ML. Methodology - The methodology adopted for gathering information/data for this research has been through questionnaire. The number of people for this paper from whom data has been gathered or who filled the questionnaire is 100. We ensure that these individuals are professional bankers who are designated in the department ofAML or branches. The questiomiaire was based on close ended questions. Close ended questions have variables for supporting our argument for the thesis that included the following: Means of knowing your customers Policies ofAML Raising STR (suspicious transaction reporting) Internally adopted systems to control ML Programs/trainings for staffto raise awareness Above stated are the primary variables we further incorporated laws recently implemented locally and internationally for assessing banks to efficiently combat the threat of Money Laundering. Findings - After completing the analysis on the subject, we were able to understand that banks are pushing their limits and adopting comprehensive tools to combat ML. Also, the regulatory body of Pakistan, SBP, is also emphasizing on assuming international regulations to further strengthen Pakistani banking industry. Even though measures are being taking by banking industry to improve AML still there is a need to do a lot more. They need to implement/improve/adopt advance technology for insuring that they are able to mitigate this threat ofML. Practical implications - This study’s outcome will facilitate the banks and regulatory body to create policy and procedures that will further strengthen controls for combating any money laundering that takes place in the country. Through stringent policies and procedures Banks will be able to understand the significance of understanding their customers, their sources of income and ensure banks are not misused for money laundering.