Does Anti Money Laundering and Combating of Terrorism Financing (AML/CFT) Measures Inhibit Financial Inclusion?

7 Pages Posted: 29 Sep 2015 Last revised: 26 Mar 2020

Date Written: June 9, 2015

Abstract

The issue of financial inclusion is important part of financial and social justice system. As huge portion of the population are ousted from formal channel of financial system, government and relevant stakeholder have to work together to bring marginalized people in mainstream financial system through the development of alternative channel. Although anti money laundering and combating of terrorism financing seeks stringent measure to discourage, dissuade and deter proceeds of crime in society with rigid documentary requirements, this mechanism is not reluctant to develop a financial inclusion issue with lenient measures for those who have the income and transaction below than a threshold based on risk based approach. The threshold has to be ascertained by the authority of given country. Authority may establish no or deferred documentary requirements for those with low income earner having no substantiality to be misused by organized criminal including money launderer and terrorism financiers.

Keywords: money laundering, terrorism financing, financial inclusion, risk based approach, alternative financial system

Suggested Citation

Acharya, Suman, Does Anti Money Laundering and Combating of Terrorism Financing (AML/CFT) Measures Inhibit Financial Inclusion? (June 9, 2015). Available at SSRN: https://ssrn.com/abstract=2616572 or http://dx.doi.org/10.2139/ssrn.2616572

Suman Acharya (Contact Author)

Nepal Rastra Bank ( email )

Nepal

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