This revelation assumes significance in the current scenario as the Reserve Bank of India (RBI) recently admitted to the rising problems of fake money in the country. Conducted over a two-month period, the key respondents in the survey were public & private sector and foreign banks operating in India. A total of 168 people participated in this survey. The survey indicates that only 30% of Indian banking systems current workforce qualifies to fall under certified AML professionals category. In some banks in India, there exists overlap across compliance, risk management and AML functions.
In case of foreign banks operating in India, 41% of the personnel in the compliance function are certified AML professionals against 29% in the state-owned banks and 18% in private sector banks in India.
In the survey, 29% respondents reported that AML trainings are conducted on monthly basis, another 11% reported it is conducted on a half-yearly basis and almost the same number of respondents have highlighted that the training is provided annually.
Sarabjeet Singh, partner, BMR Advisors, said, There is near unanimity amongst Indian banks that availability of skilled staff is a big operational challenge. Nearly 50% of the respondents pointed out the lack of defined processes in their respective banks.
Singh explained that there exists a lack of rigour in AML implementation on the part of banks in India. There is a split between state-owned banks and the other banks. Infrastructure and technology is the biggest challenge for state-owned banks a recurring theme throughout the survey, he said. Leading private Indian banks have set up links on their intranet for any employee to report a suspicion. All respondents from private banks have reported staff vigilance to be the most effective method to report suspicious transactions. Foreign banks are split between technology and staff vigilance.
However, the survey reveals that all senior-management respondents reported that they have a risk-based approach in place in their respective banks. But, 15% of middle management and 20% of operational management respondents either did not comment or did not adopt the risk- based approach. The responses showcase lack of clarity, inadequate training and undefined processes. Very few respondents reported that they followed a truly composite risk-based model that was statistically validated.