A diamond trading group tied to one of India's largest bank loan defaults is suing over allegations that the soured deal was part of an elaborate fraud that violated the country's anti-money laundering laws.
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.
Banks looking to curb costs by outsourcing their anti-money laundering duties should be cautious before signing on the dotted line with third-party vendors, say compliance experts.
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