Sub Heading : Central bank steps up vigil against money laundering
Author : Team DNA
Tightening the anti-money laundering norms, the Reserve Bank of India on Thursday made it mandatory for banks to report all suspicious transactions, including all those over Rs10 lakh, to the directorate of financial intelligence.
“The banks should report information in respect of all transactions referred under Rule 3 to the Director, Financial Intelligence Unit-India (FIU-IND),” RBI said in a notification.
In addition to suspicious transactions, the Rule 3 includes all cash transactions of more than Rs10 lakh; series of connected transactions with aggregate value of Rs10 lakh; and cash transactions where forged currency notes are used. The RBI has asked the banks not to alert the customer about the transactions being reported to the FIU-IND.
The notification said, “Banks should report all such attempted transactions in STRs (Suspicious Transaction Reports), even if not completed by the customers, irrespective of the amount.”
The RBI said banks should include transactions in the STRs if they have reasonable ground that these involve proceeds of crime, though the amount may be below threshold limit prescribed by the Prevention of Money Laundering Act. Turn to p12
RBI has also asked the banks to put in place appropriate software “to throw alerts when the transactions are inconsistent with risk categorisation and updated profile of customers”.
The appropriate software, it added, is essential for the effective identification and reporting of suspicious transactions. In case, all branches of a bank are not computerised, RBI said the principal officer of the bank concerned should cull out the transaction details and file the Cash Transaction Report (CTR) and STR in electronic form with the FIU-IND.
It said that bank branches should report transactions every month to the principal officer, who, in turn, should ensure submission of CTRs to the Financial Intelligence Unit within the prescribed time limit.
The central bank has clarified that individual cash transaction below Rs50,000 need not be mentioned in the CTRs. While advising the banks to preserve records of such transactions for at least 10 years, the notifications said such documents should be made available to the auditors connected with scrutiny of transaction, the Reserve Bank and other relevant authorities.
Through the notification, the RBI has tightened the rules issued in February 2006 in pursuance of the Prevention of Money Laundering Act.
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