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Frequent operation of locker facility and making loan re-payments in cash will soon be reported by banks to the financial intelligence agency. This is to keep a tab on suspicious transactions.
Apart from these two transactions, the Indian Banks’ Association (IBA), in consultation with the Financial Intelligence Unit – India (FIU-IND), has drawn up a list of suspicious transactions that banks need to monitor and alert the agency.
According to K Unnikrishnan, Deputy Chief Executive, IBA, banks have been advised to incorporate more parameters in their transaction monitoring system so that the FIU gets alerts on suspicious transactions.
Banks will be generating alerts, among others, when the value of transactions are not compatible with the customer’s profile; when there is a sudden spurt in transactions (credit/ debit); and in cases of high-value cash transactions in the accounts of non-profit organisations.
While some of the transaction alerts mentioned above can be easily generated, others may take time as banks’ information technology systems may have to be re-programmed to generate the alerts, said Unnikrishnan.
In terms of the Prevention of Money Laundering Rules, banks are required to report information related to cash and suspicious transactions and all transactions involving receipts by non-profit organisations of value more than ₹10 lakh or its equivalent in foreign currency to the FIU.
The Government established the FIU-IND in 2004 for receiving, processing, analysing and disseminating information related to suspicious financial transactions.
Every reporting entity (banking company, financial institution and intermediaries) is required to furnish four reports to the agency — those related to cash transactions, suspicious transactions, counterfeit currency, and non-profit organisations.
FIU-IND is also responsible for co-ordinating and strengthening efforts of national and international intelligence and enforcement agencies in pursuing the global efforts against money laundering and related crimes.
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