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FinCEN Files: 44 Indian banks identified for suspicious transactions worth $1 bn

  • Report states Indian banks made over 2,000 transactions valued at more than $1billion between 2011 and 2017
Updated 27 Sep 2020

(Karachi) In a startling revelation, at least 44 Indian banks have been identified in connection with transactions by Indian entities and individuals in a set of series of Suspicious Activity Reports (SARs) filed by the US banks to the Financial Crimes Enforcement Network (FinCEN).

The banks are involved in carrying out suspicious transactions worth more than $1 billion.

A report published in Indian Express stated, "As per one set of records that has addresses linked to India show that Indian banks made over 2,000 transactions valued at more than $1billion 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," read the report.

The banks flagged by the US watchdog 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.

The private Indian banks that were flagged are HDFC Bank (253 transactions); ICICI Bank (57); Kotak Mahindra Bank (268); Axis Bank (41) and IndusInd Bank (117) among others..

Meanwhile, the foreign banks that have filed these SARs include Deutsche Bank Trust Company Americas (DBTCA), BNY Mellon, Citibank, Standard Chartered and JP Morgan Chase among others.

The report transpired that illegal transactions were carried out through domestic branches and bank account with foreign branches of Indian banks. It mentioned, "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."

"There are cases, records show, where 'suspicious transactions' have been carried out through the international payment gateway of foreign banks. 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."

The report said that rising costs and uncertainty about how far customer due diligence should be carried out in order to ensure regulatory compliance have been one of the key reasons for banks to cut back their correspondent relationships.