Reserve Bank of India (RBI) has issued comprehensive instructions/guidelines to banks on Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002.
Also under PMLA 2002, the reporting entities, including banks, financial institutions and intermediaries of securities market, payment system operators and authorized persons which include Money Transfer Service Providers, Authorized Money Changers etc, are under obligation to file Suspicious Transaction Reports (STRs) to the FIU-IND. After analysis of STRs, the information is disseminated to the appropriate law enforcement agencies for further investigation.
Further, the Government monitors the receipt and utilization of foreign contribution received by any ˜person™ including Non Government Organisations (NGOs) in the country in terms of Foreign Contribution (Regulation) Act, 2010 and the Rules framed thereunder.
In cases of receipt of funds from abroad other than through authorized channels, Directorate of Enforcement takes appropriate action under Foreign Exchange Management Act, 1999.
During the years 2009-10, 2010-11, 2011-12 and 2012-13 (upto 28.2.2013), based upon the investigations conducted, the Adjudicating Authorities under FEMA have issued 945 Show Cause Notices for alleged contravention of the relevant provisions of FEMA relating to the transfer of funds unauthorisedly to the extent of about Rs. 2530 crore.
Apart from above, on the basis of enquiries on the complaints received, 24 cases have been referred to CBI, 10 cases to State Police, 35 NGOs have been placed in Prior Permission category, accounts of 32 NGOs have been frozen, 72 NGOs have been prohibited from receiving foreign contribution and registration of 4138 NGOs have been canceled by Ministry of Home Affairs.
As per the Master Circulated dated 2.7.2012 issued by RBI, and in terms of Regulation 5A of the Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulation 2000, Foreign Embassy/Diplomat/Consulate General are permitted to purchase/sell immovable property (other than agricultural land/plantation property/farm house) in India subject to clearance from Ministry of External Affairs, Government of India, besides payment of the consideration amount out of funds remitted from abroad through normal banking channels.
Tags: Foreign Exchange Management Act, Know Your Customer, Ministry of External Affairs, Modern Language Association, money laundering, Reserve Bank of India, Terrorism financing