Evolution of RegTech: a study of adoption of technologies to prevent money laundering

Abstract

The present slowdown in Indian economy has raised many questions about the fundamental structural issues in the Indian banking system. The lack of credit availability from the banks has led to decline in investments in the economy. (Raghu, 2019) Economic frauds and NPAs are the major cases of banks tightening the credit availability in the market. The role of banking frauds in weakening Indian economy cannot be ignored. (Srivastava, 2019) The RBI annual report has raised red flags towards the increase in the number of reported cases by 15% y-o-y basis and increase in the amount involved in banking frauds by 73.8%. According to the report, most of the cases are related to the occurrence of the frauds in the earlier years. This raises an important question of the delay in the detection of the fraud. The average lag between the occurrence and the detection of the fraud as reported by the RBI report is 22 months. This lag in the fraud cases of more than ₹1 billion is even larger and is of 55 months. The bulk of these frauds have happened in the Public sector banks. (Shakintadas, 2019)