More agencies to report high-value transactions

MUMBAI: Money transfer agencies conducting business through non-banking channels are set to come under the ambit of the Financial Intelligence Unit (FIU). So far, they do not have to report all high-value transactions under the Prevention of Money Laundering Act.

It is mandatory for several entities including commercial banks, co-operative banks, financial institutions and chit funds to report all transactions aggregating Rs 10 lakh to the FIU.

FIU director Arun Goyal said that the government will include money transfer agencies and foreign exchange dealers as reporting agencies. Mr Goyal added said that the progress made by banks in reporting the transactions in an electronic format was tardy.

Earlier, Jayant Umranikar, additional director general of police, Maharashtra, CID, said that most anti-money laundering software helps generate compliance reports but do not actually detect suspicious transactions.

He added that though internet usage is growing exponentially, customers are shying away from Net banking over security concerns. He said banks need to step up security features in their software.

Internet banking issues need to be identified and addressed more directly either through an amendment to the Banking Regulation Act or as guidelines issued by RBI which are mandatory and enforceable at the instance of third parties.