The Hindu Business Line : Govt pulls up banks over compliance

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New Delhi Feb. 8 The Finance Ministry has asked public sector banks (PSBs) to look at improving compliance on filing of cash transaction reports (CTRs) and suspicious transaction reports (STRs) under the Prevention of Money Laundering Act 2002 (PMLA).

"Although there has been progressive increase in compliance in filing of CTRs, some of the large banks would have to gear up on this front. This was pointed out at the February 5 meeting of the Finance Minister with the chief executives of PSBs," sources said.

It was pointed out that CTRs are still not being sent out for all the branches by some banks, especially State Bank of India. Moreover, it was also observed that some of the PSBs are still filing CTRs in manual form.

Under PMLA, which came into force on July 1, 2005, all banks including public sector banks are required to file CTRs of cash transaction (more than Rs 10 lakhs in a month or individually) on a monthly basis by the 15th of next month.

STRs of suspicious transactions have to be filed within 7 days of establishment of suspicion. Sources said that most PSBs are yet to put in place mechanism to identify and report suspicious transactions. Up to January 18, 2007, PSBs have in all filed nine STRs.

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