Money laundering and its prevention policy: a case of City Bank Limited

Abstract

Money laundering activities globally become a vital issue in recent years especially in the field of financial institutions. Money laundering and measures to combat it have become the focus of intense international efforts. In absence of adequate anti-money laundering policy in financial institutions can lead to serious customers and counter-party risks. The effects of money laundering on economic development are difficult to measure but it is clear that such activity damages the financial institution, reduces productivity in economy by encouraging crime and corruption. The first part of the report will provide a sound understanding of money laundering and its devastating effects on economic, security and social consequences. It will also discuss the reasons, stages and necessity of combating money laundering. In developing countries like Bangladesh, it is more difficult to combat money laundering than developing countries because of inadequate regulatory environment and vulnerable financial system. Bangladesh Bank issues guide lines to facilitate the implementation of prevention of money laundering act. According to the guideline of Bangladesh Bank, all financial institution has to develop anti-money laundering policy to ensure safety and soundness of their institutions. The paper will take a step to focus on City Bank’s anti money laundering division and anti-money laundering policy. This report will move with elaborating the steps taken by the City Bank to prevent money laundering. As money laundering is a sophisticated and dynamic crime, the criminals continuously took innovative processes to use the financial system to launder money. The study will took a step in pointing out new techniques, effects and challenges of money laundering in Bangladesh. Finally the report will end up with recommendations both for Bangladesh Bank and the City Bank. I strongly believe the recommendations will provide effective directions to prevent money laundering in future course of action.