Financial Intelligence Unit to get direct link to banks

In its bid to curb terror funding and detect suspicious financial transactions, the Government has cleared funds...

In its bid to curb terror funding and detect suspicious financial transactions, the Government has cleared funds for implementation of “Project FINnet”—an ambitious plan for system integration of the Financial Intelligence Unit (FIU).

In 2007-08, FIU received 133 Suspicious Transaction Reports (STRs) from banks and financial institutions, most of it relating to “suspected” terror financing and which were subsequently routed to intelligence and law enforcement agencies.

Earlier this month, the FIU received clearance for Rs 22 crore for the final phase of Project FINnet which aims at all STRs and Cash Transaction Reports (CTRs) being fed directly into a server.

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FIU officials said at present, banks and FI’s are required to send a compilation of data of STRs and CTRs on a monthly basis.

These are subsequently analysed and disseminated to intelligence agencies, law enforcement agencies and regulators.

Project FINnet, expected to be fully operational by 2009, will make the system more effective, since data mining tools will automatically generate “alerts” in the system.

Since it was set up in 2007, the FIU has received 61 lakh CTRs from banks and banking companies, but more critical are the STRs which help in combating money laundering and terror funding. From 817 STRs generated in 2006-07, the number has increased to 1,916 in 2007-08.

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While Ernst & Young has been chosen as consultants to set up the design of Project FINnet, bids for the final phase of the project will now be scrutinised.

FIU officials said it has been proposed that the National Informatics Centre (NIC) house the server to directly receive the STRs and CTRs from banks.

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