Manu Joseph
Mumbai – 25th April

The almost beautiful customer-relations executive of the private bank will continue to deliver the airhostess smile, the indestructible teller at the nationalized bank will continue to gaze without affection, everything will appear normal but beneath this surface, a new stealthy system is emerging. A system that will look at you with varying degrees of suspicion depending on which city you are based in, your family background, profession, periodicity of deposits and withdrawals, and much more.

At the heart of this surveillance is a high-end software running on very complex algorithms that will monitor millions of transactions every day and quietly report anything that breaks an acceptable pattern. The bank will in turn pass on the information to the Reserve Bank of India . the supposed was against money laundering, first made urgent by America’s terror paranoia in ’01, has finally come home. But does it make sense? Is customer privacy being comprised in a battle against complicated underground economy that has never been won.

Transfer of earnings from illegal businesses like drug peddling and extortion into a seemingly legit front company is a broad definition of money laundering. Using legit money to fund terrorism or other such activities is often referred to as reverse money laundering. International auditiors KPMG say the amount laundered every year globally has been variously estimated to be between $590bn and $1.5 trillion, roughly 2-5% of the Global GDP.
There is poor data on how much money is laundered in India. A private survey of a top firm said in its report that the money laundered in this country could be up to 40% of the country’s GDP. Which some say is a clear case of confusing black money with laundered money.

A typical anti-money laundering(AML) software in a major bank will not just monitor millions of transactions every day. It will pull in any data available on customers and classify them into various risk groups. “For example , small business men from cities like patna or Ranchi will be categorized as high risk because those towns have a history of throwing up merchants whose dealings are suspect,” according to Manish Jain of Hyderabad -based Software company SDG that has installed its AML tool Bankalert in over a 100 branches of Vijaya Bank. It keeps a hawkish eye on 80% of customer accounts and monitors over 600 transactions a second, a speed that will increase to 6,000 to 12,000 transactions a second after the next upgrade. NGOs and religious organizations, according to an AML vendor, will also be closely watched by banks.