Non-bank financial institutions and third party lenders are finding themselves in the crosshairs of regulators who are auditing institutional malpractice. According to India’s Economic Times, the ministry of corporate affairs (MCA) is expected to examine third party funders for unsavory acts, such as money laundering and violations concerning foreign exchange best practices.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Non-bank financial institutions and third party lenders are finding themselves in the crosshairs of regulators who are auditing institutional malpractice. According to India’s Economic Times, the ministry of corporate affairs (MCA) is expected to examine third party funders for unsavory acts, such as money laundering and violations concerning foreign exchange best practices.
The Economic Times says explains that MCA authorities plan to audit third party funders and associated intermediaries to ensure compliance with the law.
India’s Institute of Chartered Accountants (ICAI) serves as the regulatory body tasked with offering guidance to the upcoming audit of third party funders. The ICAI’s scope is broad, and interpretation of third party funders who potentially fall out of line may be considered ‘very wide.’
The interpretation is that many third party funders may have issued deals to pass funds between various intermediaries. The Economic Times notes that this action is not illegal, however, auditors will ensure that money laundering mandates are respected.
Third party funders and their foreign counterparts should expect greater scrutiny as regulators aim to preserve the rule of law.
