Shady money deals under scrutiny | delhi | Hindustan Times
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Shady money deals under scrutiny

delhi Updated: Dec 01, 2008 00:44 IST
Gaurav Choudhury

The government is examining more than 1,000 suspicious transaction reports from various entities in the financial sector that it believes could be linked to funding of terrorist activities in the country.

The Financial Intelligence Unit (FIU), created by the finance ministry in 2004 to monitor money laundering and terror financing, has prepared a list of suspicious transactions, including hundreds of cases of suspected terror financing and doubtful foreign remittances.

These details will be forwarded to the Intelligence Bureau, the Research and Analysis Wing , regulators and departments like the Central Board of Direct Taxes, Securities Exchange Board of India and the Reserve Bank of India.

FIU has also examined cash transactions involving more than Rs 10 lakh. Over half of these were through private-sector banks, sources said.

Sources, who did not wish to be identified, said India has received at least 14 enquiries from abroad related to terror financing and other suspicious transactions.

The government is also likely to examine financial transactions conducted through credit card payment gateways such as Mastercard and Visa, moneychangers and money transfer service.

Commandos of Indian Navy said on Friday that they recovered several credit cards issued by top Indian and foreign banks from a rucksack of a terrorist at the Taj Mahal hotel in Mumbai. Citibank, HSBC, ICICI Bank, Axis Bank, HDFC Bank and State Bank of Mauritius issued the credit cards, a navy officer involved in the operation said on Friday.

In June, the cabinet had approved major amendments to the Prevention of Money Laundering Act to make it mandatory for payment gateways such as Visa and MasterCard, money changers and money transfer service providers to report financial transactions carried out through them to government authorities.

An amendment Bill was introduced in Rajya Sabha in October.

“The amendments have become necessary in wake of the rising threat of misusing legitimate financial enterprises and channels to fund terrorist activities,” a senior government official said.

These amendments will make the law compliant with Financial Action Task Force (FATF) — an inter-governmental body founded by the G7 countries to develop policies to combat money laundering and terrorist financing.