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Govt may tighten bank reporting standards...

india Updated: Feb 24, 2011 23:23 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Under attack from the Opposition for inaction over black money, the government may change the norms of Annual Information Reports (AIR) filed by banks on suspicious transactions.

AIRs, introduced in 2004, mandate banks to file reports with the RBI and the Financial Intelligence Unit (FIU) on suspicious transactions in their banks to prevent money laundering.

The norms for filing AIRs may be made more stringent in an attempt to address the growing menace of black money

The new norms for filing AIRs could form the part of the statement that finance minister Pranab Mukherjee is expected to make on government's plan of action on black money in his budget speech for 2011-12.

There has been a consistent rise in suspicious transactions, including some high value cross-country monetary deals, in 2008-09, reports analysed out by the FIU have showed.

The number of suspicious transaction reports (STRs) filed by banks and financial institutions has more than doubled to 4,409 in 2008-09 (the latest year for which data is available) compared to 1,916 in the previous year, the FIU said in its annual report.

The FIU, created by the finance ministry in 2004 to monitor money laundering, has prepared a list of thousands of cases of doubtful foreign remittances.

Intelligence agencies, tax authorities, enforcement agencies and regulators are now anlaysing the end use of these transactions, many of which might have been invested in stock markets, real estate deals, insurance premia and or used for terrorist financing.