MUMBAI: RBI governor Sanjay Malhotra has said that anti-money laundering laws must have “surgical precision” to target illegal activities in place of blunt tools that hurt even honest citizens.
The governor’s statement come at a time when customers are complaining about accounts being frozen over periodic KYC requirements, and some seniors being forced to visit branches. He said the Central KYC Records Registry (CKYCR), with over 1 billion records, can transform customer onboarding by streamlining identification and due diligence for both customers and regulated entities.
Addressing the Private Sector Collaborative Forum of the Financial Action Task Force (FATF) here, Malhotra said that India’s AML-CFT (anti-money laundering-countering the financing of terrorism) framework has been strengthened by sustained collaboration among financial institutions, non-financial businesses, regulators, and govt agencies.
He added that while India’s financial system has demonstrated resilience in its AML and CFT measures, continuous refinement is necessary to address emerging threats. “The private sector plays a vital role in keeping financial systems secure,” Malhotra said.
Malhotra cautioned that threats from money laundering and terror financing are becoming more sophisticated, largely due to technological advancements. “We need to have laws and regulations which, with surgical precision, target only the illegitimate and illicit, rather than use them as blunt tools which unintentionally hurt even the honest,” he said.
Malhotra pointed out that stringent compliance requirements should not create barriers for genuine businesses and individuals.