Bank Kiting And Money Laundering - 1852 Words

Bank: Kiting Money laundering Banks could become victim to kiting. Kiting can occur within a bank because criminals will open multiple accounts within multiple organizations in order to commit kiting, and bank employees are not aware the criminal has already opened multiple accounts. Banks also fall victim, as they do not detect kiting taking place until it is too late and the high dollar checks come back as insufficient funds. Banks are able to prevent kiting from occurring by placing a hold on checks over a certain dollar amount. This will ensure the funds are legit and valid. Banks are also able to watch for multiple check deposits and checks written with the same dollar amount. In addition, banks can require a bank officer’s approval on any drawings against uncollected funds, overdrafts, or wire transfers, they also should perform daily reporting of all drafts against uncollected funds. Kiting can be deterred, however banks must ensure they have the proper internal controls in place to ensure they do not fall victim to kiting. Banks are susceptible to money laundering within the organization. Banks are an easy target for money laundering because criminals or drug cartel can pay off bank employees or personnel in order to run their money through the bank. Criminals also have the ability to purchase a controlling interest in a bank, especially those banks with weak controls. This allows the criminals to move money through the bank without being questioned.Show MoreRelatedBank : Kiting And Money Laundering737 Words   |  3 PagesBank: Kiting Money laundering Banks could become victim to kiting. Kiting can occur within a bank because criminals will open multiple accounts within multiple organizations in order to commit kiting. Banks also fall victim, as they do not detect kiting taking place until it is too late and the high dollar checks come back as nonsufficient funds. Banks are able to prevent kiting from occurring by placing a hold on checks over a certain dollar amount. This will ensure the funds are legitRead MoreOperational Risk Management in Banking Sector: an Overview2324 Words   |  10 PagesReseaRch PaPeR Commerce Volume : 3 | Issue : 1 | January 2013 | ISSN - 2249-555X Operational Risk Management in Banking Sector: An overview Keywords Rakesh Chutia Assistant, State Bank of India Margheita-786181 Dist.-Tinsukia Assam ABSTRACT Operational risk is inherent in all banking products, activities and processes and systems and the effective management of operational risk is of paramount importance for every bank’s board and senior management. With globalization and deregulationRead MoreBarry Minkow2480 Words   |  10 Pagestrouble: bad checks, complaints from customers, urge for payment from suppliers and finally the shortage of working capital. Not surprisingly, the bank refused to loan money to his low profit margin company. 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