Role of Banks in Money Laundering through Fake Bank Accounts and Writing off Loan in Pakistan: An Analytical Study

Abstract

Purpose: Recent media reports of money laundering through fake bank accounts implicate the involvement of banks in money laundering through "managed bank accounts". Further the waivers of loan of apparently sound institutions also give rise to specific questions and reservations on the role of banks. This paper attempts to explore the answer to those fundamental questions. Design/Methodology/Approach: The research follows qualitative content analysis methods to critically analyze the role of banks in money laundering and loan waiver policies. Findings: The research finds that despite of heavy banking regulations and laws the banking accounts are being used for money laundering. Further, the research concludes that the act of waiving off loans allegedly has provided a channel to misuse the public earned money, resulting in gross loss to the public exchequer. Implications/Originality/Value: The research concludes that the role of bank in maintaining the fake/idle accounts and the loan waiver policy and its malafide usage in the banking sector resulted in financial frauds and money laundering in Pakistan

Keywords

• Banks
• Money Laundering
• Loan
• Write off
• Law