Directions (Q.1-10): Read the following passage carefully and answer the questions given below it. Money laundering is the processes by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source. In other words Money laundering is concealing the source of illegally gotten money. The processes of money laundering are extensive. Generally speaking, money is laundered whenever a person or business deals in any way with another person’s benefit from crime. That can occur in a countless number of diverse ways. Traditionally money laundering has been described as a process which takes place in three distinct stages. Which are – Placement, the stage at which criminally derived funds is introduced in the financial system. Second is Layering, the substantive stage of the process in which the property is ‘washed’ and its ownership and source is disguised. And third is Integration, the final stage at which the ‘laundered’ property is re-introduced into the legitimate economy. This three staged definition of money laundering is highly simplistic. The reality is that the so called stages often overlap and in some cases, for example in cases of financial crimes, there is no requirement for the proceeds of crime to be ‘placed’.
Money laundering happens in almost every country in the world. The act of laundering is committed in circumstances where a person is engaged in an arrangement (i.e. by providing a service or product) and that arrangement involves the proceeds of crime. These arrangements include a wide variety of business relationships e.g. banking,fiduciary and investment management. Money obtained from certain crimes, such as extortion, insider trading, prostitution, drug trafficking, illegal gambling or tax evasion is “dirty”. It needs to be cleaned to appear to have derived from non-criminal activities so that banks and other financial institutions will deal with it without suspicion. Originally, the term applied to real money but now money laundering applies to the proceeds of crime that are laundered using a variety of monetary instruments including securities, digital currencies such as bit coin, credit cards, and traditional currency. Money can also be laundered by many methods, which vary in complexity and sophistication.
Regardless of the difficulty in measurement, the amount of money laundered each year is in the billions (US dollars) and poses a significant policy concern for governments. As a result, governments and international bodies have undertaken efforts to deter, prevent, and apprehend money launderers. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money, both as a result of government requirements and to avoid the reputational risk involved. Issues relating to money laundering have existed as long as there have been large scale criminal enterprises. Modern anti-money laundering laws have developed along with the modern War on Drugs. In more recent times anti-money laundering legislation is seen as adjunct to the financial crime of terrorist financing in that both crimes usually involve the transmission of funds through the financial system (although money laundering relates to where the money has come from, and terrorist financing relating to where the money is going to).
1. Which of the following is not a stage of traditionally money laundering?
1) Integration 2) Substantive 3) Placement 4) Layering 5) None of these
2. Find the correct statement in the context of the given passage ?
1) Money laundering is among the risks that afflict economies and leads to the collapse of economic systems.
2) Money laundering is considered an individual crime.
3) Money laundering causes interest rates to increase. 4) All of the above 5) None of these
3. Find the false statement in the context of the given passage ?
1) Government and other international bodies are making effort to arrest money launderers.
2) Initially the term money laundering was applied to real money.
3) Hundreds of billions of dollars of criminally derived money is laundered through only financial institutions.
4) Modern anti-money laundering laws have been developed. 5) None of these
4. What can be the suitable title to the given passage ?
1) Financial management 2) Cause of economic slowdown 3) Financial inclusion 4) Money laundering 5) Anti–money laundering
5. What do you understand by 'Dirty money' as given in the passage ?
1) Money obtained unlawfully.
2) Ill gotten money that needs money laundering for it to be used in normal business transactions.
3) It is very frequently depicted as white and usually considered interchangeable.
4) All 1, 2 and 3. 5) None of these
Direction (Q. 6 -8) : Choose the word which is most nearly the SAME in meaning as the word printed in bold as used
in the passage.
1) Sweeping 2) Exclusive 3) Comprehensive 4) Tiny 5) Restricted
1) Camouflage 2) Back 3) Reality 4) Rear 5) Pit fall
1) Openness 2) Benevolence 3) Coercion 4) Swindle 5) Peace
Direction (Q.9 -10) : Choose the word which is most OPPOSITE in meaning of the word printed in bold as used in the
1) Disregard 2) Reveal 3) Ignore 4) Fill 5) Evasion
1) Misunderstand 2) Lose 3) Liberate 4) Stumbling 5) Arrest
1.2 , 2.5 , 3.3 , 4.4 , 5.5 , 6.3 , 7.1, 8.4 , 9. 2 , 10.3