44 Indian banks in spotlight for suspicious transactions

Around 44 Indian banks are said to be in spotlight for being involved in suspicious transactions worth up to more than US$ 1 billion.

US banks have filed a set of Suspicious Activity Reports (SARs) with Financial Crimes Enforcement Network (FinCEN) –  a financial watchdog, which highlights 44 Indian banks being involved in more than 2,000 suspicious transactions between 2011 and 2017.

The banks which have filed the report include Deutsche Bank Trust Company Americas (DBTCA), BNY Mellon, Citibank, Standard Chartered and JP Morgan Chase and others.

As per the details, several Indian citizens have been found to have transacted money to foreign addresses.

The banks being involved in the suspicious transactions 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
  • Canara Bank – 190 transactions
  • HDFC Bank – 253 transactions
  • ICICI Bank – 57 transactions
  • Kotak Mahindra Bank – 268 transactions
  • Axis Bank – 41 transactions
  • IndusInd Bank – 117 transactions

According to the investigation carried out by Indian Express ‘correspondent banking relationship’ – which has been severely criticized by regulators for its secrecy regarding offshore transactions.

Correspondent banking relationship allows one bank to hold deposits owned by other banks as ‘correspondent and respondent’ respectively.

The report also recommends necessary standardization and provision of legal entity identifiers for matters pertaining to correspondent banking.

In addition to it, Financial Action Task Force (FATF) and other relevant platforms must ensure the provision of addressing hurdles in information sharing and countering money laundering practices on a global scale.

Meanwhile, banks –  citing confidentiality obligations, have not yet responded or commented on the issuance of SARs.