India's chief banking regulator last year handed down a record number for anti-money laundering and know-your-customer penalties, more than quadrupling enforcement actions levied during the prior year, according to bank statistics.
Lax regulatory oversight of offshore financial centers and banks in developed countries is facilitating illicit financial activity in India, a Washington, D.C.-based advocacy group said Wednesday.
The Indian government has convicted too few money launderers and terrorist financiers, an intergovernmental organization said in a report that followed India's accession to the group.
Federal regulators are likely to scrutinize banks that outsource their compliance duties in the wake of a $1 billion accounting scandal in India involving New Delhi-based Satyam Computer Services Ltd. It offered U.S. companies various services, including anti-money laundering compliance.
The Republic of India is likely to be the next nation to join the Financial Action Task Force, which sets global anti-money laundering standards, according to a report Monday by an Indian news organization.
A UBS spokesman acknowledged Thursday that the Indian regulator scotched the deal because of concerns about UBS's compliance program.
Spanish authorities cracked a major gold-based money laundering scheme by a group of jewelers. Experts say the jewelry and precious metals industries lack controls to prevent laundering.