The FIU is mandated to analyse suspicious financial transactions pertaining to money laundering and terror financing as part of the Ministry of Finance establishment.
Demonetisation prompted intelligence and probe agencies to make record number of requests to the Financial Intelligence Unit (FIU) for obtaining classified reports on suspicious currency transactions via banking and other financial channels in the country. A first-ever report on dubious deposits made in the wake of the notes ban, announced in 2016, has been accessed by PTI, which revealed that 886 such requests were made by the agencies to the FIU during 2016-17 as compared to the earlier high of 850 during 2015-16.
“The year 2016-17 registered a new high in the number of references received from the intelligence (754) and law enforcement (132) agencies,” the FIU report said. The earlier figures in the context of these requests were– 450 (2014-15), 594 (2013-14), 549 (2012-13) and 590 (2011-12). The FIU is mandated to analyse suspicious financial transactions pertaining to money laundering and terror financing as part of the Ministry of Finance establishment. It receives suspicious transaction reports (STRs) and counterfeit currency reports (CCRs) from all banks and other financial institutions for analysing. After processing, these reports are sent to the snoop agencies like the Intelligence Bureau (IB), Research and Analysis Wing (RAW) and the Defence Intelligence Agency among others, and investigative organisations like the Income Tax department, the CBI and the Enforcement Directorate.
The report said the agencies “rely on information contained in the FIU databases not only for developing intelligence, but also for strengthening the ongoing investigations”. “During 2016-17, the FIU provided information in response to references on money laundering, terrorist financing, corporate frauds, organised crimes, fake Indian currency and tax evasion among others,” it said. The FIU, in the wake of the increased number of such requests, had prepared a series of 30 different reports to enable probe agencies to conduct raids, searches and launch action against black money generators and hoarders of the newly introduced currencies of Rs 2,000 and Rs 500.
“With the FIU remaining intensely involved in collection and collation of many reports related to demonetisation during November-December, 2016, the agency succeeded in disseminating 56,978 STRs in 2016-17, the highest in the history of the agency,” it said. FIU director Pankaj Kumar Mishra, in his note in the report, said that the agency also developed new “red flag indicators and implemented them through banks for detecting suspicious transactions during the demonetisation period”.
The demonetisation of the two high value currencies of Rs 1,000 and Rs 500 was declared by Prime Minister Narendra Modi on the night of November 8, 2016. The FIU report had also earlier detected an over 480 per cent jump in suspicious transactions in the country post-demonetisation. “These figures show that huge efforts were made by people to deposit illicit money in banks in the wake of the notes ban. These instances were detected as part of the anti-money laundering regime and are now under investigation by various agencies,” a senior finance ministry official said.