Financial Crime Risk In Nepal
According to the Basel Anti Money Laundering Index, Nepal is the second most vulnerable country in South Asia in terms of money laundering risks. Nepal also currently ranks 120 out of 160 countries in the Transparency International Index. US Department of State in its annual report titled “Country Reports on Terrorism 2015” has expressed concern that terrorists might use informal money transfer systems such as hundi and hawala–rampant in Nepal–for money laundering and terrorism financing.
The Cost Of Financial Crime
Financial Crime costs $ 2.1 Trillion to the world economy. Since 2006, $ 26 billion worth of fines relating to Financial Crime have been paid by 10 major global banks. Operation closures have occured in 16 countries due to the lack of proper Financial Crime oversight.
Financial Crime Compliance in Nepal
According to reports, “55 percent banks currently rely on manual processes to identify suspicious money laundering or terror financing activities, which include reporting by front-line staff, manual reviews or tip-offs from intelligence agencies. Only 39% banks have an automated system or software solution that allows automated identification and monitoring of suspicious money laundering or terror financing activities and over 50% banks fail to assess money laundering-risks-properly”.