Govt. taps RBI to track all transactions

Govt. taps RBI to track all transactions

News:

1. The Centre is planning to set up an information technology (IT)-based mechanism to keep a tab on all non-cash, financial transactions in the country.

Important facts:

2. The move aimed at the crackdown on black money and following the money trail flowing in and out of thousands of shell companies.

3. The RBI had been asked to develop the IT infrastructure for this purpose.

4. Presently, the idea is to make the RBI the sole repository of such information, which will not be made available to other agencies such as the income tax department and enforcement directorate.

5. Such agencies required to make specific request to the RBI if they want information on a particular set of entities.

6. Under the Prevention of Money Laundering Act, banks and financial institutions are already required to alert the Financial Intelligence Unit, under the Finance Ministry, to any suspicious transactions, cash or otherwise.

7. Cash transactions of more than ₹10 lakh , need to be reported to the FIU.

8. In FY17, the FIU had received more than 15.9 million Cash Transaction Reports and 4.73 lakh Suspicious Transaction Reports.

9. All suspicious transactions need to report to the unit within seven days after it is concluded that those are suspicious in nature.

10. The move to track all financial transactions is the crucial step to curb black money and identify shell companies.

11. The government has shut down more than two lakh such entities and more than two lakh other firms that have not been carrying out operations have been sent notices.