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Article
Publication date: 1 January 2006

Elsa Bawani Satkunasingam and Bala Shanmugam

To provide arguments in favour of legalising rotating savings and credit associations (ROSCAs) as they play an important role in savings and credit for women in Malaysia.

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Abstract

Purpose

To provide arguments in favour of legalising rotating savings and credit associations (ROSCAs) as they play an important role in savings and credit for women in Malaysia.

Design/methodology/approach

The paper refers to previous studies on ROSCAs in Malaysia and extracts information that shows that ROSCAs are used mostly by women as a method of forced‐savings, credit and insurance against uncertainties. It suggests different methods that can be used to make ROSCAs more efficient. Finally, it provides suggestions for amendments to existing legislation which will not interfere with the social structure that supports ROSCAs, yet permit participants to sue defaulters.

Findings

The findings show that ROSCAs are widely practised in Malaysia especially in the rural and suburban areas. The participants are mostly women from middle income and low‐income groups who used it as a form of savings or credit. The benefits of permitting ROSCAs outweigh the risks. Legalising ROSCAs will not remove the benefits but will substantially reduce the risks.

Originality/value

This paper provides arguments to legalise ROSCAs in Malaysia and provides suggestions to ensure greater efficiency and a lower default rate. It also suggests amendments to the legislation to enable participants to take quick and cheap legal action against defaulters.

Details

Journal of Money Laundering Control, vol. 9 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 1 March 1992

Bala Shanmugam and Philip Bourke

In the mid 1970s two psychologists, Kahneman and Tversky, isolatedthree major aspects of heuristics which induce biases in our decisions,which they termed as: (1…

Abstract

In the mid 1970s two psychologists, Kahneman and Tversky, isolated three major aspects of heuristics which induce biases in our decisions, which they termed as: (1) representativeness, (2) availability and (3) anchoring. An example of the bias within the representativeness heuristic is the underutilization of base rates. Decision makers tend systematically to overweigh current information and underweigh background information (prior probabilities) relative to what Bayes′ theorem implies. Bias in the availability heuristic is observed for instance in the area of government regulation. Proponents of increasing government regulation of business consider the benefits of eliminating the relatively small number of observed abuses but do not consider the large number of cases where the current system has worked. Decision makers exhibit a tendency to concentrate on extremes rather than means. This is because extremes are more readily available to retrieve from our mental set (mind) than means. On the anchoring heuristic, it is noticed that people allow their decisions to be distorted by the presence of points of reference that should be irrelevant. Discusses biases associated with one particular activity which is important to bank marketing officials, i.e. assessing creditworthiness, and substantiates such a bias using empirical findings.

Details

International Journal of Bank Marketing, vol. 10 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 1 April 1989

Bala Shanmugam

The focus here is on marketing techniques employed by banks indeveloping countries with special emphasis on Malaysia. It is observedthat the banks use highly specialised…

Abstract

The focus here is on marketing techniques employed by banks in developing countries with special emphasis on Malaysia. It is observed that the banks use highly specialised forms of marketing techniques. They have generally expanded their operations to previously “unbanked” areas and have sought to extend and improve the banking habits of the people. Overall, the marketing activities have been rather successful, as the growth of deposits and loans has been rapid.

Details

International Journal of Bank Marketing, vol. 7 no. 4
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 1 October 2003

Bala Shanmugam, Mahendhiran Nair and R. Suganthi

Highlights the growth of money laundering in Malaysia and the efforts of the Malaysian government to curb it, including the Anti‐Money Laundering Act 2001; Malaysia was…

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Abstract

Highlights the growth of money laundering in Malaysia and the efforts of the Malaysian government to curb it, including the Anti‐Money Laundering Act 2001; Malaysia was named by the US Pentagon as one of the countries through which terrorist funds pass to become legitimate, and the country includes the Labuan International Offshore Financial Center, which is likely to be a target for money laundering. Outlines the Act’s provisions and the involvement of Malaysia in the Asia Pacific Group of Money Laundering since May 2000. Suggests improvements in the system: improved international cooperation, proper mechanisms for handling suspicious reports, implementing a compliance culture among financial institutions, strict application of bank‐licensing procedures, plus training and new technology investment.

Details

Journal of Money Laundering Control, vol. 6 no. 4
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 31 December 2004

Bala Shanmugam

Defines “Hawala” as an Arabic word meaning “change” or “transform”. Describes it as a system which goes back to 11th century India and allows money to be transferred…

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Abstract

Defines “Hawala” as an Arabic word meaning “change” or “transform”. Describes it as a system which goes back to 11th century India and allows money to be transferred around the globe without actual money movement or wire transfers, depending on a system of family, clan or ethnic connections. Outlines the benefits of hawala remittance as its cost effectiveness, reliability, efficiency, speed, and convenience for foreign workers who may be semi‐illiterate and certainly not familiar with formal banking systems. Relates this to actual hawala money changers in Malaysia’s Klang Valley, who provided the information for this article, and to the potential of the hawala system to facilitate money laundering and, ultimately, terrorism. Reports that Malaysia is a country named by the Pentagon as a country in which terrorists launder funds, and that it has implemented focused and wideranging measures to combat this menace.

Details

Journal of Money Laundering Control, vol. 8 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 17 October 2008

Bala Shanmugam and Haemala Thanasegaran

The aim of this paper is to highlight the importance of countering the dangers posed by money laundering activities and the measures taken to date by the Malaysian…

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Abstract

Purpose

The aim of this paper is to highlight the importance of countering the dangers posed by money laundering activities and the measures taken to date by the Malaysian authorities in this respect.

Design/methodology/approach

The paper achieves this by looking at the current money laundering trends in Malaysia, followed by a detailed account of the initiatives taken by the Malaysian authorities to curb such activities. These proactive initiatives range from the enactment and implementation of the Anti‐Money Laundering (AML) Act 2001, the establishment of the Financial Intelligence Unit of the Central Bank of Malaysia and the Southeast Asia Regional Centre for Counter‐Terrorism which work with international enforcement agencies, to the requirement of suspicious transaction reporting amongst professional accountants and lawyers and more.

Findings

Malaysia continues to make a broad and sustained effort to combat money laundering and terrorist financing flows within its borders.

Practical implications

The practical implication of this paper is to stress the importance of keeping abreast with the increased challenges posed by money laundering, especially via the internet and the vital need for the banking and financial sector to invest heavily in transaction monitoring devices/software and training in AML detection, in order to tackle the menace.

Originality/value

This paper makes for a useful read for practitioners, academics, policymakers and students alike.

Details

Journal of Money Laundering Control, vol. 11 no. 4
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 9 May 2008

Haemala Thanasegaran and Bala Shanmugam

Owing to the vital role played by the insurance sector in the economic growth of a country, the purpose of this paper is to highlight the serious threat posed by money…

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Abstract

Purpose

Owing to the vital role played by the insurance sector in the economic growth of a country, the purpose of this paper is to highlight the serious threat posed by money laundering activities in exploiting the insurance industry, from the Malaysian perspective.

Design/methodology/approach

Provides a description of the risks posed by money laundering in the insurance sector, along with some useful case examples as illustration. Highlights the measures developed and adopted to control money laundering in the Malaysian insurance sector, with some thoughts on the importance of staying vigilant, as it is the only way in which to effectively counter the menace of money laundering in the sector.

Findings

Research shows that two‐thirds of the cases worldwide associated with money laundering in the insurance sector, related to life insurance products, with general insurance accounting for most of the remaining third of the cases reported. Apart from this, insurance intermediaries like agents and brokers, who are an important direct distribution channel for the sector, are easily subject to exploitation by money launderers.

Practical implications

The practical implication of this paper is to stress the importance of detecting signs of money laundering activities, as early prevention is the best alternative for insurance companies in countering money laundering in the industry.

Originality/value

The formal reporting measures put in place by the Anti‐Money Laundering Act 2001 are a step in the right direction by the Malaysian Government. However, this paper serves as a reminder that in spite of such measures, the insurance sector is particularly vulnerable to money laundering activities, owing to the sector's rapid growth in offering innovative and sophisticated products and services worldwide. Thus, this paper makes for a useful read for practitioners, academics, policymakers and students alike.

Details

Journal of Money Laundering Control, vol. 11 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 23 October 2007

Haemala Thanasegaran and Bala Shanmugam

The purpose of this paper is to highlight the dangers posed by money‐laundering activities undertaken by criminals through the international trade mechanism, from the…

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Abstract

Purpose

The purpose of this paper is to highlight the dangers posed by money‐laundering activities undertaken by criminals through the international trade mechanism, from the Malaysian perspective.

Design/methodology/approach

This is to be achieved by providing a description of the money‐laundering process in general and, more specifically, the international trade‐based money‐laundering mechanism. This is followed by an account of the development of international trade in Malaysia and related control mechanisms undertaken, so as to highlight the scope available to curb money laundering via the international trade mechanism in Malaysia.

Findings

The research showed two things: first, that the common techniques of laundering money via international trade involve over‐ and under‐invoicing of goods, multiple invoicing of goods, over‐ and under‐shipment of goods, falsely described goods and complex trade approaches; and second, the unfortunate state of affairs pertaining to the lack of data/information available on the existence and workings of such activity in the Malaysian context (which has in part hampered the aims of this paper).

Practical implications

Nevertheless, this paper has the practical implication of being something of a wake‐up call to the Malaysian policymakers (and the policymakers of developing countries), in that awareness of the impending challenges brought about by money laundering to international trade is crucial in tackling the menace.

Originality/value

This paper's call for increasing awareness and identification of international trade‐based money laundering and improving international cooperation and interaction makes it a useful read for policymakers, academics and students alike.

Details

Journal of Money Laundering Control, vol. 10 no. 4
Type: Research Article
ISSN: 1368-5201

Keywords

Article
Publication date: 1 April 2004

Bala Shanmugam and Mahendran Nair

The recent wave of mergers and acquisitions in the financial institutions all over the developed nations has also taken its toll in Malaysia. Factors such as…

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Abstract

The recent wave of mergers and acquisitions in the financial institutions all over the developed nations has also taken its toll in Malaysia. Factors such as globalization, liberalization and information technology developments have contributed to the need for a more competitive, resilient and robust financial systems in Malaysia. This is added by the recent 1997 Asian financial crisis, which contributed for speeding the mergers and acquisitions process in the Malaysian banking sector. The end result is the formation of ten anchor banks from a total of 54 financial institutions as at end of 2001. This paper has explored the causes and the process of the mergers and acquisitions as well as the future implications in the Malaysian banking system.

Details

Managerial Finance, vol. 30 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 29 June 2010

Ananda Samudhram, G. Sivalingam and Bala Shanmugam

The purpose of this paper is to discuss a framework of accounting theoretical bases that could promote research into little understood areas of human capital accounting.

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Abstract

Purpose

The purpose of this paper is to discuss a framework of accounting theoretical bases that could promote research into little understood areas of human capital accounting.

Design/methodology/approach

The possible forces that hinder greater disclosure of human capital‐based information are analyzed by reviewing several theoretical viewpoints that offer a framework of different possible reasons for the low frequency of human capital‐based disclosures.

Findings

The paper explores several possible reasons for the reluctance of firms to disclose greater amounts of human capital‐based information, from the perspective of relevant theoretical bases. The predominant reasons may differ in different circumstances, industries and environments.

Research limitations/implications

The paper explores theoretical bases that explain the barriers to widespread reporting of human capital‐based information. The theoretical bases discussed are not empirically validated.

Practical implications

The validation of the theoretical bases explored in this study, and the possible uncovering of new bases in the future through empirical studies, will enable academics, policy makers and accounting standard setters to better understand the reasons for the limited disclosures of human capital‐based information by listed firms to capital markets. This will help in the promulgation of widely accepted accounting standards for the disclosure of human capital‐based information, which address and overcome the forces that currently hinder the reporting of human capital‐based information.

Originality/value

This is the first paper that explores a framework of several pertinent theoretical viewpoints that specifically address the non‐disclosures of human capital‐based information to capital markets.

Details

Journal of Human Resource Costing & Accounting, vol. 14 no. 2
Type: Research Article
ISSN: 1401-338X

Keywords

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