Bank of Baroda fraud case: DRI tells Financial Intelligence Unit to red-flag multiple forex transactions

New Delhi: The Financial Intelligence Unit (FIU) has been asked to widen parameters for generating red-flag indicators by including multiple transactions of smaller amounts to check fraudulent forex remittance.

At present, FIU generates a Suspicious Transaction Report (STR) on a transaction of Rs 10 lakh and above, believed to be proceeds of black money.

The move comes amid a multi-agency probe on recently-unearthed Rs 6,100 crore foreign remittance scam through Bank of Baroda.

The Directorate of Revenue Intelligence (DRI) has written to the FIU, which is tasked with analysing and disseminating information relating to dubious financial exchanges, to widen red-flag indicators to check fraudulent forex transactions.

“They have been asked to include multiple transactions of smaller amounts as a red-flag indicators. There are some more changes suggested to the FIU for checking black money and fraud forex banking exchanges,” a senior DRI official said.

Both the Central Bureau of Investigation and Enforcement Directorate are probing transactions of Rs 6,100 crore to Hong Kong from Bank of Baroda’s Ashok Vihar branch in Delhi.

The huge transaction is believed to be trade-based money laundering as the amount was transferred in the garb of payments for imports, that never took place. As per CBI probe so far, Rs 6,100 crore were transferred through nearly 8,000 transactions done between July, 2014 and July, this year.

The Central Vigilance Commission has also asked Reserve Bank of India and Indian Banks’ Association to red flag multiple transactions of smaller amounts from a single account and ensure compliance of KYC norms to check fraudulent forex transactions.