Special Investigation Team to RBI: Share data with agencies to check black money

SIT stresses upon need to have a single agency such as CEIB for the purpose.

The Supreme Court-appointed Special Investigation Team (SIT) on black money has written to the Reserve Bank of India asking it to establish an institutional mechanism to share information on foreign exchange transactions and export-import payments with other law enforcement agencies such as enforcement directorate, DRI and CBDT.

In a letter to the RBI Governor on August 11, the SIT headed by retired Justice M B Shah has stressed upon the need to have one agency such as Central Economic Intelligence Bureau (CEIB) or any other agency, as a data warehouse, from where various agencies can gather relevant information for taking early appropriate action, as per a statement by finance ministry. The data available with RBI could be “cross checked with other information available with enforcement authorities and illicit financial flows could be curbed,” the SIT said.

The SIT had in the past asked the RBI to provide data on advance remittances and export outstanding of more than one year. The data provided “clearly showed that there are gaps in monitoring trade flows which are used by unscrupulous elements to take out precious capital outside the country, this damaging the fabric of Indian economy,” it said.

At present, the RBI keeps record of data for all types of foreign exchange transactions. The revenue department has also been asked by the SIT to identify a single-point agency which could access the database relating to foreign exchange transactions and trade related payments and thereafter, disseminate them to various enforcement agencies.

In its letter, the SIT has suggested RBI to share foreign exchange transactions data of all authorised dealers available in Foreign Exchange Transactions Electronic Reporting System (FET-ERS) with other law enforcement authorities.

“FET-ERS should capture the PAN number of the importer or exporter and that RBI should take necessary steps for the same to get this done on an urgent basis,” the statement said.

In the data provided by the RBI with respect to the Exports Outstanding data, the SIT said huge amounts were found outstanding beyond a period of one year in violation of FEMA and suggested that companies might have wrongly claimed duty drawbacks. The SIT is of the view that it is important to co-relate shipping bills with confirmation from banks with the export realisation data, which is maintained by the central bank in its EDPMS database.

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“The SIT has asked the Enforcement Directorate, Directorate of Revenue Intelligence and Ministry of Commerce to analyse the data of export outstanding and take necessary action in this regard,” the finance ministry statement said.

In the wake of the alleged Bank of Baroda scam, the SIT had asked RBI to institutionalise a mechanism for cross checking of advance remittances against Bill of Entry irrespective of value of advance remittances sent. The RBI had informed the SIT that huge advance remittances running into billions of dollars were outstanding as on September 30, 2015, for which Bill of Entry correlation has not been done. SIT has now asked the RBI to get this co–relation completed at the earliest and inform the panel.

It, however, expressed satisfaction over the IDPMS (Import Data Processing and Monitoring System) being set up by RBI by September, which will enable cross checking of each advance remittance against the Bill of Entry.