9 things the SIT is pushing for to check black money menace in India

NEW DELHI: The Supreme Court-appointed Special Investigative Team ( SIT) on Friday submitted its report on black money in which it has recommended crackdown on money laundering through stock exchange platform and Participatory notes (P-notes).

Here's are some salient recommendations:

1) Sebi needs to have an effective monitoring mechanism to study unusual rise of stock prices of firms while such a rise is taking place. It can create red flags on unusual trading volumes and create a system where the financial background of firms can be checked through their annual returns and any other indicators.

2) Not just bar such entities but take strong penal action against them.

3) Check for misuse of participatory notes for money laundering. Sebi needs to bolster steps through KYC norms to ensure that PNs are not used as conduits for black money or terrorist funding.

4) Detect and take action against shell companies through intelligence gathering, regular data mining and dissemination of information gathered from various law enforcement agencies. Push for strong penal action against persons involved in creation of shell companies and providing accommodation entries.

5) Action under PMLA for Trade Based Money laundering. All cases of trade-based money laundering detected by DRI where violation of section 132 of Customs Act above the threshold provided for in Part B of Schedule of PMLA, has been found must be shared by DRI with the Enforcement Directorate to enable ED to take action under Prevention of Money Laundering Act.

6) Regulate the possession and transportation of cash, particularly putting a limitation on cash holdings for private use and including provisions for confiscation of cash held beyond prescribed limits, provision in the Act should be made. A number of European countries bar any cash transaction above a particular limit. This can be done in India too.

7) Monitor entities involved in illegal transactions such as drugs/narcotics deals, corruption/bribery, cricket betting and use those parking funds during elections.

8) Create provision for controlling cash transactions as donations in schools and colleges.

9) Gift of jewellery made to the charity or institutions should be accompanied by donor's name and his PAN Number