An effective AML program requires a jurisdiction to have criminalized money laundering, given the relevant regulators and police the powers and tools to investigate; be able to share information with other countries as appropriate; and require financial institutions to identify their customers, establish risk-based controls, keep records, and report suspicious activities money laundering can make a bank instable may lay themselves open to direct losses from fraud.
Money laundering is the process of concealing the source of money obtained by illicit means.
• Bank capture: Money launderers or criminals buy a controlling interest in a bank, preferably in a jurisdiction with weak money laundering controls, and then move money through the bank without scrutiny.
• Real estate: Real estate may be purchased with illegal proceeds, then sold. The proceeds from the sale appear to outsiders to be legitimate income. Alternatively, the price of the property is manipulated; the seller will agree to a contract that under-represents the value of the property, and will receive criminal proceeds to make up the difference.[7]
• Black salaries: Companies might have unregistered employees without a written contract who are given cash salaries. Black cash might be used to pay them.[8]
• Fictional loans
the Prevention of Money-Laundering Act, 2002 came