Impact of Demonetization on CAME Profession


Demonetization efforts of the Indian government are likely to see a increased demand for the Certified Anti Money Laundering Experts. The anti-money laundering (AML) function for financial institutions, such as banks and broker-dealers, is among the largest functions in a compliance department.

The major Indian Banks are likely to employ several hundred or more Certified Anti Money Laundering Experts as AML officers at all levels, with the largest concentration at the analyst or associate level due to the changed compliance norms during the Demonetization process.

Traditionally, most of these AML officers would be responsible for the core AML functions of transaction monitoring and client on-boarding, both of which are incredibly time-consuming and require substantial resources in order to manage the expansive franchises of the major institutions.

All financial institutions have an obligation to monitor for and detect suspicious activity, and then report suspicious activity to the Financial Intelligence Units via the Suspicious Activity Report. It is fair to say that a majority of the Certified Anti Money Laundering Experts in the banks would be assigned to some aspect of the transaction monitoring process.

The current standard approach to identify the Suspicious transactions is to employ an automated system that scans all transactions in order to detect potential suspicious activity.

The definition of the suspicious activity changed on multiple occasions during the process of demonetization. Reserve Bank of India, Income Tax Department and the Ministry of Finance issued notifications introducing new thresholds and limits on the banking transactions.

Though the currency circulation would be restored in 2017, it would have long term impact on the compliance systems of the banks.

Additionally, no software in the world is perfect, it catches genuine transactions as suspicious. The system’s output needs to be investigated further by those with experience in detecting suspicious activity. This is a time-consuming task that requires tremendous resources, especially in a major financial institution that handles thousands of transactions per day.

Financial institutions have a prescriptive menu of elements that need to be obtained before any client can be on-boarded. During the period of Demonetization one of the most popular method of combating the demonetization was opening the multiple accounts. Many of these newly opened accounts lacked the substance. Certified Anti Money Laundering Experts are expected to play a crucial role in the Post KYC Compliance and identifying the suspicious transactions.

Thus, the AML compliance function in the Indian Banks is likely to take the approach of “throwing more resources at it,” due to the incredible volume of transactions marked “suspicious” during the demonetization process.

Aggressive hiring will probably continue, providing a great opportunity for junior individuals with business degrees, accounting degrees, law degrees, etc., and those who have a good measure of industry knowledge, and can be easily trained.

During the process of Demonetization the process of enforcement has changed significantly. Revenue and regulatory bodies emphasized on making sure about elimination of the false positives – The agencies detected and reacted in the manner they’re supposed to. include the information they’re supposed to, and are reasonably effective.

All banks were required to provide the information about the deposits made during the process of demonetization to Income Tax Authorities. During the process of Demonetization the process of enforcement has changed significantly. Revenue and regulatory bodies emphasized on making sure about elimination of the false positives. The agencies detected and reacted in the manner they’re supposed to.

With the growing emphasis on the digitization, financial institutions are increasingly looking at ways to potentially incorporate the rise in available data to help them to be more predictive in these areas. With the right people, this is a realistic goal.

Ultimately, in order to keep up with this rigorous new era of regulations and regulatory enforcement in the AML arena, Indian Banks need to find a way to marry the technology and data experts with the substantive Certified Anti Money Laundering Experts. They’re better together !

Pre-disbursement Due Diligence

due diligence

Recent headlines around rising Non Performing Assets (NPAs) in India have brought a myriad of challenges faced by banks and financial institutions into the spotlight. Banking and finance sector is struggling with the constant issue of inadequate due diligence about the borrowers.
Continue reading

Tribute to Sunil Bahri, CFAP

Sunil Bahri

It was the afternoon time when I received a call from Dubai. CA Hardik Soni was on the other side of the call. He informed me that Sunil Bahri is no more with us. He suffered a massive heart attack in the morning. It was a very sad news. I could not work, i was trying to put all my thoughts together for him. For last two years he was not feeling well but from past few days he was trying to get back to the work. Very few know that he was a great professional. I could not attend his cremation hence decided that I would pen down few words. Few people leave impact on your life because they have different thoughts. Continue reading

Bitcoin is heavily used in Laundering


Certified Anti Money Laundering Expert
is the only certification in the world which has embedded the Laundering with the digital currencies in its syllabus. In the research report released by Indiaforensic in July 2013, it elaborated the problems at the Liberty Reserve and how this virtual currency was used as the tool of laundering money in the $45 Million ATM Heist. This report Laundering in Cyber World- The Digital Currency Way also mentioned about the Silk Road as the underground black marekt. Not less than a year’s time after the report virtual currency is reeling from a string of crises and the future of the largest digital currency- Bitcoin depends on some of the  lawsuites in USA. Continue reading