Parliamentary panel for better coordination to check money laundering

NEW DELHI: Concerned over possible flow of tainted money in capital markets, a Parliamentary committee today suggested setting up of monitoring and coordination mechanism by all regulatory and intelligence agencies including RBI, SEBI and Enforcement Directorate to deal with the menace of money laundering.

While approving the Prevention of Money Laundering (Amendment) Bill, 2011 with some modifications, the Standing Committee on Finance said that scrutiny of fund flows into the markets cannot be left to individual banks.

"...as tainted money flowing into markets remains a distinct possibility...suitable amendments may be made in the Bill to monitor and curb possibly money laundering taking place through stock/securities markets," said the report which was tabled in Parliament. The Committee is headed by former Finance Minister and senior BJP leader Yashwant Sinha.

It further said that "all the regulatory and intelligence agencies including the RBI, SEBI, FIU (Ind), the Enforcement Directorate, the Director of Revenue Intelligence and Investigation Wing of Income Tax Department should set up a monitoring/coordination mechanism for this purpose, while remaining alert to financial flows".

The government had proposed to amend the Prevention of Money Laundering Act, 2005, to update the provisions for combating money maundering and terror financing. This is in line with standards set by the inter-governmental body Financial Action Task Force (FATF) and its own experience in dealing with the menace.

Lok Sabha Speaker Meira Kumar had referred the amendment Bill for scrutiny to Standing Committee in January.