The government is examining records of about 600 financial transactions that it believes could be linked to terror funding and other suspicious activities in the country and the region.
The Financial Intelligence Unit (FIU), created by the finance ministry last year to monitor money laundering and terror financing, has forwarded a list of suspicious transactions, including hundreds of cases of suspected terror financing and doubtful foreign remittances, to the Intelligence Bureau, the RAW, regulators and departments, including the Central Board of Direct Taxes, SEBI and the Reserve Bank of India.
In its first annual report, the FIU identified several accounts having a common beneficiary with huge and unexplained money transfers made to them.
Banks reported the highest number (437) of suspicious transactions— cash deposits in bank accounts at multiple locations, off-market transactions in dematerialised accounts (electronic share transfers), fraudulent use of ATM and credit cards and unexplained activity in accounts—in the last financial year (2006-07).
FIU has examined cash transactions involving more than Rs 10 lakh and over half of these were through private sector banks.
He admitted that stock exchanges in Mumbai and Chennai have reported fictitious companies that were engaging in stock-market operations. Some of these companies were later traced to terrorist outfits, he said.