Forty-four Indian banks flagged for suspicious activity
US Banks Red-Flagged 44 Indian Banks for Suspicious Transactions Between 2011 and 2017.
Forty-four Indian banks have been flagged in connection with transactions by Indian entities and individuals in a set of Suspicious Activity Reports (SARs) filed by US banks with the agency, the Financial Crimes Enforcement Network (FinCEN).
FinCEN files investigation identified more than two-trillion-dollars worth of transactions between 1999 and 2017. The transactions had been flagged in more than 2,100 reports by nearly 90 financial institutions.
Transactions by the flagged Indian Banks
The banks flagged by the US watchdog include state-owned Punjab National Bank (290 transactions), State Bank of India (102 transactions), Bank of Baroda (93 transactions), Union Bank of India (99 transactions) and Canara Bank (190 transactions), among others.
The private Indian banks that were flagged are HDFC Bank (253 transactions), ICICI Bank (57 transactions), Kotak Mahindra Bank (268 transactions), Axis Bank (41 transactions) and IndusInd Bank (117 transactions) among others.
Us banks that have filed SARs about Indian banks include Deutsche Bank Trust Company Americas (DBTCA), BNY Mellon, Citibank, Standard Chartered, and JP Morgan Chase, among others.
The reported reasons cited by the foreign banks for red-flagging their Indian counterparts were transactions described as “high-risk jurisdiction for money laundering or other financial crimes, adverse media or public information on the client, unidentified parties, and the fact that source of funds and purpose of the transaction could not be ascertained.”
Transactions linked to Bhushan Steel Ltd, amounting to the tune of $4.39 million (Rs 32-crore) figure in SARs sent between 2012 and 2015 to FinCEN. The company was acquired by Tata Steel through an insolvency court in 2018.
Investigation Reports
According to the investigative reports; Deutsche Bank, Bank of New York Mellon, Standard Chartered, JPMorgan and HSBC, repeatedly violated their official promises of good behavior.
These banks, ICIJ reported, “kept profiting from powerful and dangerous players even after U.S. authorities fined these financial institutions for earlier failures to stem flows of dirty money.”
Placing the network in context, ICIJ said that the FinCEN files “represent less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017.”
According to the investigative reports, transactions of public sector entities like Hindustan Aeronautics Limited and therefore the State Trading Corporation of India Limited and personal majors Bharti Airtel and Essar, which are under scrutiny by Indian investigative agencies, are red-flagged in several SARs to FinCEN.
Money Laundering?
India’s Special Investigation Team (SIT) on black money is reportedly listening of the suspicious transactions revealed in FinCEN files and is looking to carry a discussion to make a decision on the course of investigation in India.
The SIT was formed in 2014 supported the directions of the Supreme Court.
In a statement before the publication of a series of articles supported SARs, FinCEN stated that:
“the unauthorized disclosure of SARs is a crime which will impact the national security of us, compromise law enforcement investigations, and threaten the security and security of the institutions and individuals who file such reports.”
However, ICIJ and other media outlets have published their revelations supported the documents.
“They (FinCEN files) show banks blindly moving cash through their accounts for people they can’t identify, failing to report transactions with all the hallmarks of cash laundering until years after the very fact, even doing business with clients enmeshed in financial frauds and public corruption scandals,” the ICIJ stated.
In another report, the newspaper revealed that the FinCEN files:
“uncovered an internet of transactions of a flourishing concealment network travel by Pakistani national Altaf Khanani who is additionally said to possess been a key financier for fugitive terrorist Dawood Ibrahim,” supported SARs filed by the quality Chartered Bank in NY.
