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44 Indian banks identified for suspicious transactions

Published : Monday, 28 September, 2020 at 12:00 AM  Count : 490

KARACHI, Sept 27: At least 44 Indian banks have been identified in connection with transactions by Indian entities and individuals in a set of Suspicious Activity Reports (SARs) filed by US banks with the watchdog, the Financial Crimes Enforcement Network (FinCEN), an investigation by The Indian Express has revealed.
According to a set of records of parties with Indian addresses, Indian banks figure in SARs linked to over 2,000 transactions valued at over $1 billion between 2011 and 2017. Significantly, there are thousands of transactions linked to Indian entities and businessmen where the Indian senders or beneficiaries have addresses in foreign jurisdictions.
Records investigated show that Indian banks mentioned in the SARs include: state-owned Punjab National Bank (290 transactions); State Bank of India (102); Bank of Baroda (93); Union Bank of India (99) and Canara Bank (190), among others.
Among private banks that figure in the SARs are HDFC Bank (253 transactions); ICICI Bank (57); Kotak Mahindra Bank (268); Axis Bank (41) and IndusInd Bank (117) among others.
Banks mentioned in the suspicious activity reports include state-owned Punjab National Bank, State Bank of India, Bank of Baroda, Union Bank of India and Canara Bank
According to the newspaper, the foreign banks that have filed the SARs include Deutsche Bank Trust Company Americas (DBTCA), BNY Mellon, Citibank, Standard Chartered and JP Morgan Chase among others.
Indian banks figure in the SARs primarily because they are "correspondent banks" to the foreign banks which have filed these SARs and figure in the network through which these transactions have been effected.
Records show there are cases where 'suspicious transactions' have been carried out through the international payment gateway of foreign banks, said the paper. In others, foreign branches of Indian banks such as a State Bank of India account in Canada and an account of Union Bank of India in the UK have been used by clients for carrying out part of the transactions in question.
Key to this is the correspondent banking relationship - an arrangement over which there has been growing concern as regulators crack down on secrecy of offshore transactions.
Under this arrangement, one bank (correspondent) holds deposits owned by other banks (respondents) and provides payment and other services to those respondent banks. Through correspondent banking relationships, banks can access financial services in different jurisdictions and provide cross-border payment services to their customers.
In the SARs, the foreign banks have cited a slew of reasons to red-flag these transactions, including "high-risk jurisdiction for money laundering or other financial crimes", adverse media/public information on the client, "unidentified" parties, and the fact that "source of funds and purpose of transaction could not be ascertained".    -Dawn









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