Abstract:
The basic objective of this research is to identify and discuss the methods of money laundering used in
Pakistan. Money laundering by using banking channels is not a new thing in Pakistan, after 9/11, the
consequences of money laundering have seen internationally, especially with perspective of Pakistan,
being a Muslim country. In all over the world, the importance of money laundering have seen in last
decade, therefore all banks from all over the work must have develop a confidential unit name is
compliance, who continuously looking and working on the customer suspicious activities through
banking channels.
Pakistan also in the category of high risk jurisdiction, due to fail to implement FTAF recommendations
and tighten the AML/CFT policies through parliament. Pakistan needs to enact AML/CFT act through
parliament.
There are diverse ways that are in practice for money laundering in commercial bankssimilar to
placement, layering, and integration. The money laundering on one handcreates the social problem like
concentration of wealth in few hands and on the otherhand, from commercial banks point of view it
results in the unbalanced increase indeposit of the banks. The phenomenon of money laundering was not
so much famousbefore the 9/11. The incidence of 9/11 opened the eyes of financial institutions and
theregulatory bodies specially in the USA because before 9/11 there were many shellbanks (fugue banks)
which used to transact with huge funds without any source oforigin of these funds, which resulted in the
disaster like 9/11.Money laundering exists in Pakistan, and money launders normally using banking
channels and hundi, hawala system to launder money from one place to other place, detail analysis
havedone in this research.
All banks must be focus on KYC process at the time of account opening and ongoing basis; Know your
customer is very crucial part to prevent banks from money laundering.
In this study, researcher define the process of money laundering, and how it works and how Pakistani
banking channels is being used for money laundering, researcher also describe the facts and figures of
money laundering and its impact on country, as a social and as a political. Researcher conducted
interviews, fills up questionnaires from different bankers, reviewed prior history and then researched to
conclude this research with recommendations.
