Announcing the Winner of Student’s Initiative Program 2020

Meghana Joy, a student from Warwick University always wanted to do research based stories. This research is the beginning of student contribution towards development of the future ethical community. She is the Student of the year 2020.

October is the time to announce the Best Student Research in Financial Crimes 2020 awards. Every year one student is selected for this award. To earn this award students work with us for the year and complete the research projects.

Indiaforensic is committed to providing a comprehensive resource center for all students. It is essential for students to learn, think and act about the global threat of financial crimes. To help them prepare for careers in the financial crimes and compliance profession we work closely with the students across the world.

Association with students is open to undergraduate students enrolled in 9 semester hours (or equivalent), or graduate students enrolled in 6 semester hours (or equivalent) in an accredited college or university. We nurture these students associations by providing them the platform

  • To learn more about financial crimes
  • To gain visibility by publishing on Indiaforensic
  • To provide financial assistance for the research and further studies in financial crimes and compliance.

Winner of the year 2020

In order to promote the culture of ethics we worked with numerous students in the year 2020 on different parameters. During the various levels of assessments, Meghana Joy performed the best. She is the student of The University of Warwick and she created her research paper on Chinese Underground Banking System.

Meghana is a final year Accounting and Finance student at the University of Warwick, UK. Fusing her passion for finance with her love for writing, this 20 year old is on a mission to reimagine the global landscape of females in finance, one research paper at a time. She finds solace in demystifying financial jargon and contributing to changed perceptions.

This paper was selected by the Jury of the Indiaforensic for the Best Student Research in Financial Crimes. The extract of this research is provided below

Chinese Underground Banking System Explained

There currently exists a definitive dearth of academic comprehension around the nature and extent of a system that has been abundantly used (and misused) since ancient Silk Road trading – the Chinese Underground Banking System or fei ch’ien. Such paucity of information around even the wider Asian underground banking networks is largely attributable to the minimal appreciation of the cultures and traditions indigenous to the regions in which these systems operate and thrive. However, with the evidenced use of the system in money laundering schemes and the recent recognition of its direct, deep-rooted and enduring impacts on international trade, Foreign Direct Investment (FDI) and even terrorism, the urgency of defogging the system has steeply increased.

Underground banking systems exist alongside formal banking systems across the globe under varied names – hawala in South Asia and the Middle East, for instance. However, with China’s growing domination of the global economy, its illegitimate network that transcends national boundaries is drawing the keen attention of regulatory institutions, both regional and international like the global watchdog – the Financial Action Task Force (FATF). The modus operandi of the system has been carefully refined over the years to one that is now notoriously tough to uncover. It involves several smokescreens such as the splitting of funds into different bank accounts, receipts in the form of inconspicuous tokens such as half a bus ticket, haphazard bookkeeping meaningless to the average man as well as the use of mule accounts belonging to Chinese students enrolled at foreign institutions.

A crucial role is also played by criminal groups, like drug traffickers, looking to launder their illicit funds as they become the source of the remarkably high liquidity that Chinese underground bankers need to maintain to seamlessly service huge volumes of transactions, particularly those of their wealthy Chinese clients. Such clients looking to invest in overseas markets are a common user of the network as Chinese law largely prohibits them from transferring money abroad. Evidently, devoid of an extraordinarily thorough understanding of the process, it is impossible for authorities to crackdown this system.

In view of such gravity, this paper aims to cast some much needed light on the Chinese Underground Banking System (CUBS), its origins, rise to popularity, modus operandi and its significant influence on international trade, FDI and terror funding, with a specific focus has also been made on the its use by the Chinese diaspora within the United Kingdom (UK).