400pc rise in cases of suspicious transactions

Cases of suspected terror financing and crime related money went up by almost 400 % in the country`s banking and monetary channels keeping enforcement and intelligence agencies on their toes during the last financial year.

New Delhi: Cases of suspected terror
financing and crime related money went up by almost 400 per
cent in the country`s banking and monetary channels keeping
enforcement and intelligence agencies on their toes during the
last financial year.

More than 17,000 Suspicious Transaction Reports (STRs)
were generated by the financial intelligence wing of the
government with the maximum reports of such transactions being
received and reported by the banking channels of the country.
But there is no information with the Financial
Intelligence Unit (FIU) on what the law enforcement agencies
like CBI or ED did with the information provided by the FIU,
officials said.

According to the data submitted by the FIU to the
Union Finance Ministry, a total of 17,209 STRs -- which gave
rise to a reasonable ground of suspicion that the transaction
may involve the proceeds of crime or financing of activities
related to terrorism -- were received as compared to 4,409
such reports in the 2008-09 fiscal.

"The huge increase of such reports indicates that the
Indian financial channels are being used extensively to
conduct transactions of huge amounts within the country and to
foreign shores. The selected reports have been sent to
intelligence and enforcement agencies for action within their
legal domain," a top Finance Ministry official said.

"The number of STRs received from banks showed more
than 160 per cent growth in 2009-10 as compared to 2008-09,"
the report said, underlining the quantum jump in the reportage
of such sensitive and crucial financial reports from banking
and other institutions dealing with huge cash.

While other financial institutions reported 2,872 of
such cases, intermediaries reported 2,497 cases in the data
compiled by the FIU till March this year.

All financial institutions of the country are bound
under the law to submit a report of such suspicious
transactions in their channels to the FIU which subsequently
sends it to various enforcement agencies like the Income Tax
department, Central Board of Excise and Customs (CBEC),
Narcotics Control Bureau (NCB), Central Bureau of
Investigation (CBI), Intelligence Bureau (IB) and the
Enforcement Directorate (ED) for action.

An STR includes details of all accounts, transactions,
individuals and legal persons or entities related to a
suspicious transaction.

More than 1.83 crore Cash Transaction Reports (CTRs)--
with more than Rs 18 lakh crore of money value in them -- were
also reported to the FIU which monitors these transactions to
check money laundering and forex violations by individuals and
organisations. The CTRs too doubled this year as a total of
1, 83, 06,235 transactions (with minimum Rs ten lakh in each)
were reported this fiscal as compared to 55,11,150 reports
during 2008-09.

The public sector banks were the largest contributor
under this category with 1,05,06863 CTRs while private banks
registered with 65,52,597 reports, foreign banks 3,17, 578 and
co-operative banks 9,29,197 such reports, the report said.

The cases of detecting Counterfeit Currency
Transactions (CCRs) grew "more than 250 per cent during
2009-10 as compared to 2008-09", the report said.

1,27,781 CCRs with a face value of Rs 10 crore were
detected during 2009-10 as compared to 35,730 incidents with a
face value of Rs seven crore during 2008-09.

Private banks in the country bore the maximum brunt of
the fake Indian currency usage as they reported 1,52,594 of
such cases to the financial intelligence wing of the Finance
Ministry.

One CCR includes details of one instance of
counterfeit currency detected by a bank.

The FIU is the central national agency responsible for
receiving, processing, analysing and disseminating information
relating to suspect financial transactions which it receives
from banks and other financial institutions.

PTI

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