In keeping with the renewed commitment made in the budget speech to fight economic offences such as terror finance, money laundering and tax evasion, the government will soon introduce a technology that will alert monitoring and investigative agencies to instances of suspicious or irregular monetary transactions in banks as well as non-banking financial institutions.
This move is significant in the light of increasing cases of terror funding and money laundering, which reportedly occur through legitimate banking and non-banking channels.
Elaborating on FIN Net, which will be connected to similar networks in other countries, an official said, “It will act as a platform for intelligence and investigative agencies to gather information on suspicious transactions, reports and cash transactions in reports generated by banks. It will lead to better coordination among different agencies.”
“As of now, a lot of valuable time is lost by the time the transaction is led to its logical conclusion. FIN Net, to be introduced in a month, will enable real-time action,” he added.
At present, banks report suspicious transactions to the Financial Intelligence Unit under the finance ministry, which decides on the agency suitable for probing them.
The parameters, as to what will be deemed as a suspicious transaction, have already been determined after taking into consideration many factors, such as the nature of the clientele, geographical location, amount transacted, etc. “For a client who is a corporate giant, a transaction amount of a couple of crores may not be termed suspicious. However, this may not be the case with someone with no known source of big income,” the official said.
FIN Net acquires more significance in the light of intelligence reports indicating that terror elements are increasingly using legitimate channels to conduct monetary transactions, and are making real estate and construction sectors their latest domain. “Private placement programmes are increasingly being used for converting black money into white,” the official said.