Examining the Factors Increasing Money Laundering Vulnerabilities in Pakistan’s Financial Sector
Download| Volume 6 Issue 2, 2025 | |
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| Author(s): |
Muhammad Raghib Zafar (Corresponding Author)
Abdul Basit
Syed Kamal Hayder Kazmi
Muhammad Yasin
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| Abstract | The study is conducted in order to explore the factors enhancing the probability of money laundering in financial institutions of Pakistan. For this, individuals working in financial institutions mostly working in compliance department who understand the phenomenon of money laundering is contacted. Total seven variable is included in the study, one is dependent variable (i.e., money laundering) while six variables are independent (i.e., customer due diligence, employee training, internal control and policies, record keeping, suspicious transaction reporting and usage of technology). The data is gathered in understanding of demographic features such as age, gender, education, and working experience. A sample of total 223 respondents were tested through Smart PLS. Algorithm, Blindfolding and Bootstrapping was run to check the variables consistency, reliability, regression, Q statistics and hypothesis were tested. It is concluded in the study that factors including customer due diligence, employee training, suspicious transaction reporting, and usage of technology are not enhancing whilst and of greater concern are the findings that internal control policies and record keeping are enhancing the probability of money laundering in financial institution of Pakistan. Adequate measures from regulator is needed to make regulations more stringent to control the menace of money laundering activities within financial institutions effectively. |
| Keywords | Money Laundering (ML), Customer Due Diligence (CDD), Record Keeping (RK), Suspicious Transaction Reporting (STR), Internal Control Policies (ICP), Technology, Employee Training |
| Year | 2025 |
| Volume | 6 |
| Issue | 2 |
| Type | Research paper, manuscript, article |
| Recognized by | Higher Education Commission of Pakistan, HEC | Category | "Y" | Journal Name | ILMA Journal of Social Sciences & Economics | Publisher Name | ILMA University | Jel Classification | - | DOI | ISSN no (E, Electronic) | 2790-5896 | ISSN no (P, Print) | 2709-2232 | Country | Pakistan | City | Karachi | Institution Type | University | Journal Type | Open Access | Manuscript Processing | Blind Peer Reviewed | Format | Paper Link | http://ijsse.ilmauniversity.edu.pk/arc/Vol6./pdf/v2/2.pdf |