Govt okays fin intelligence body

NEW DELHI: The Cabinet on Thursday approved setting up of a Finance Intelligence Unit to prevent money laundering, Finance Minister P Chidambaram said. Union Cabinet today gave its approval for setting up of Finance Intelligence Unit India (FIU-IND) with the aim of establishing links between suspicious or unusual financial transactions and underlying criminal activities, so as to prevent and combat money laundering and related crimes, he told reporters after the Cabinet meeting. FIU-IND would also coordinate and support efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and related crimes. It will be the central national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions to these agencies who shall protect the information against misuse, an official statement issued after the FM''s briefing said. The FIU-IND would be headed by the director (Joint Secretary level officer) and set up as an independent unit of the Central Economic Intelligence Bureau. The Financial Action Task Force (FATF), an international body set up in 1989 after the G-7 Summit to examine and recommend anti-money laundering measures worldwide, had suggested setting up of a Financial Intelligence Unit (FIU). FATF''s recommendations are regarded as the key standard in anti-money laundering efforts. In creating transaction disclosure systems, some countries realised the need for centralising this effort in a single office for receiving, assessing and processing these reports. At present, about 85 countries are FATF members and have set up FIUs. Justice Mukherjee Commission term extended The government also extended by another six months the term of Justice Mukherjee Commission probing into the alleged disappearance of Netaji Subhash Chandra Bose but decided against giving any further extension to it. The term of the Commission, headed by Justice MK Mukherjee, a retired judge of the Supreme Court, would have ended on November 14 this year. The decision to extend the tenure of the Commission till May next year was taken at a meeting of the Union Cabinet presided by Prime Minister Manmohan Singh. Chidambaram said that the meeting that the Cabinet decided that no further extension would be given to the Commission and that it should submit its report within this period. The Commission was set up by the previous NDA Government on May 14, 1999. The Cabinet also approved creation of a post of joint secretary in the Tribal Affairs Ministry by upgradaing the post of director to ensure its smooth functioning. It also approved setting up of a post of additional director general (Medical) and seven posts of inspector general (Medical) in the Central Police Forces medical establishment. These posts will be combined in the ranks of deputy inspector general and above and have been created with a view to enhancing medical facilities for the central police forces, Chidambaram said. Securitisation Act to be amended The Cabinet, in its meeting, also decided to amend the Securitisation Act to enable banks and financial institutions speedily recover bad loans, which have mounted to over Rs 1,00,000 crore. Announcing the Cabinet decision, Finance Minister P Chidambaram said a bill would be introduced in the winter session of Parliament. The Bill, seeking amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, would replace the ordinance on the said Act. The amendments have been necessitated after the Supreme Court directed that banks should give borrowers an opportunity to make a representation before they pass orders and attach properties. Upholding the Constitutional validity of the Act after its judgement on Mardia Chemicals'' case, the apex court had struck down the provisions under 17(2) of the Act mandating that defaulters have to deposit 75 per cent of the outstanding dues before seeking legal redress. The proposed amendments are aimed at dissuading borrowers from adopting dilatory tactics and enabling creditors to effect speedy recovery, he said. Bankers feel defaulters should deposit at least 25 per cent of the outstanding dues before taking legal recourse so that the Act could be a deterrent for wilful defaulters. At the bankers'' conference, the FM said a slew of other legislations, including Credit Information Cos Regulation Bill, would be introduced in the winter session of Parliament to carry forward banking reforms.

Govt okays fin intelligence body

The Cabinet on Thursday approved setting up of a Finance Intelligence Unit to prevent money laundering, Finance Minister P Chidambaram said.

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