Yarasi Tusharika215 wordsTheir whole copy
Opening · a definition
Money laundering refers to the process of making illegitimate money integrated into financial system (Black to white money). IMF estimates that 2-4% of GDP is lost due to money laundering.
Body · points and prose
Challenges posed by money laundering to Indian economy and national security
Challenges -> (1) Reduction in tax collection, revenue to government. -> (2) Using money laundering to fund organised crimes. -> (3) Narco-terrorism being funded by money-laundered money. -> (4) Use of bitcoins for money laundering. -> due to anonymity. -> (5) Urban naxalism - being funded by money laundering. -> (6) Increased use of technology posing threat as it is becoming hard to discover. -> Ex :- Hawalas using digital currencies.
Ways to curb money laundering
① Using technological interventions -> (a) Block chain technology - Using this to break the anonymity in transactions. -> (b) Use of Artificial intelligence in analysis, big data in finding discrepancies in reported incomes. -> (c) Use of UAVs, drones to keep an eye on smuggling money through borders.
② Policy and institutional arrangements -> PMLA, 2002 (Prevention of money laundering act) - effective implementation -> Role of enforcement directorate to be strengthened.
Close · a summary
Money laundering if not tackled can pose a threat to India's economy and national security in this era of digital currencies.
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