In the initial stages of banking, clear guidelines, acts and frameworks were required for customers to transact with the banking system. Regulations were required to frame rules to prevent money laundering, institute measures to avoid fraudulent transactions, protect and control the country’s foreign exchange, protect customer interest.
Regulations were also required to prevent funds from being misused, or being invested in risky instruments by banks and customers to protect the latter’s interests. Banks followed a number of internal processes to comply with guidelines and mitigate risks.
