Terror, crime financing cases double in 2009

Financial transactions relating to crime and terror as also the menace of fake currency notes spread like weeds in 2009, mainly through the nation's banking channels.

Effective employment of the anti-money laundering mechanism by India, which vowed to fight tax havens and black-money, helped detect over 4,000 suspicious financial transactions relating to crime and terror -- more than double the numbers reported last year.

It also found more than 35,000 cases of counterfeit currency being transacted through banking channels.

A total of 4,409 suspicious transactions were reported to the finance ministry by banks (2,826), financial institutions (841) and intermediaries (742) taking the number of such reports to more than double of 1,916 transactions reported last year, according to an official report submitted to the finance ministry.

The instances of fake currency received by various categories of banks rose to more than four times as 35,730 reports were registered and sent to the government. During 2007-08 such reports were a mere 8,580.

The report said the fake currency hence reported till March 2009 by the banks had a face value of over Rs 7 crore (Rs 70 million).

While private banks reported the highest number of fake currency reports with 29,846 cases, public sector banks reported 396 and foreign banks filed 5,422 cases with the government.

In an effort to identify patterns of money laundering, terrorist financing and other economic crimes, the government also scanned 55,11,150 cash transactions containing atleast Rs 55,111.5 crore (Rs 551.115 billion) in them.

Interestingly, the CTRs filed by co-operative banks and Regional Rural Banks (RRBs) increased to more than 300,000 this year, compared to approximately 25 thousand in 2006-07, the report said.

In 2007-08 the CTRs filed by these rural banks were 1,58,015.

Each cash transaction that was monitored and reported to the Financial Intelligence Unit-India (FIU-IND) -- a government agency to investigate and disseminate information between financial and law enforcement agencies for identification of suspicious money laundering -- had at least Rs 10 lakh (Rs 1 million) in it.

Interestingly, the government also received 69 requests of information from foreign financial intelligence units while it sent 17 such requests to other countries, the report said.

Various enforcement agencies like the Central Board of Direct Taxes, Central Board of Excise and Customs, Narcotics Control Bureau, Central Bureau of Investigation, Intelligence Bureau and the Enforcement Directorate were sent 2,450 Suspicious Transaction Reports (STRs) for further action by the FIU this year.

The STRs included details of all accounts, transactions, individuals and legal entities related to such a transaction.

The CTRs contained details of account, related persons and transactions for a month in a bank account. The FIU-IND also received 232 references from country's intelligence and enforcement agencies for want of financial information and links from the agency's huge database.