Suspicious Transaction Reports (STRs): Big Brother watching
THE PMLA 2002 and Rules notified thereunder impose an obligation on banking companies, financial institutions and intermediaries of the securities market to verify identity of clients, maintain records and furnish information to FIU-IND. FIU-IND has been established as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions. FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence and enforcement agencies in pursuing the global efforts against money laundering and related crimes.
Every reporting entity shall furnish to FIU-IND information of all suspicious transactions whether or not made in cash.
Suspicions transaction means a transaction including an attempted transaction, whether or not made in cash which, to a person acting in good faith -
(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or
(b) appears to be made in circumstances of unusual or unjustified complexity; or
(c) appears to have no economic rationale or bonafide purpose; or
(d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism;
Cash transactions of over Rs. 50,000 are reported. If a bank has reason to believe that a customer is intentionally structuring a transaction into a series of transactions below the threshold of Rs.50,000/- the bank should verify the identity and address of the customer and also consider filing a suspicious transaction report.
It is reported that in 2013-14, the FIU received more than 54,000 Suspicious Transaction Reports.