Ernest & Young to Help Govt Track Dirty Money
RITU SARIN
Will set up systems for monitoring laundering, suspect transactions
Stepping up its drive against money laundering and terror financing, the Government has contracted account and audit firm Ernst & Young to get to the bottom of ”suspicious” financial transactions.
Official sources have confirmed to The Indian Express that Ernst & Young
have entered into a two-year contract, valued around Rs 2 crore, with the
Financial Intelligence Unit (FIU) to set up and implement a computerised
system which records and analyses all ”suspicious” financial transactions.
The need for a computerised data analyser, the sources said, stemmed from
the fact that the FIU has already received 18 lakh Cash Transaction Reports
(CTRs) and 650 Suspicious Transaction Reports (STRs) from 40,000 ”reporting
entities”.
Two years ago, the FIU was set up as the nodal agency for receiving,
processing, analysing and disseminating information relating to suspicious
transactions.
Under provisions of the 2002 Prevention of Money Laundering Act (PMLA), all
financial institutions, banks and intermediaries like merchant bankers,
foreign institutional investors and stock brokers are required to submit
CTRs and STRs of ”suspicious” transactions above Rs 10 lakh in Indian or
foreign currency.
The Ministry of Finance has cleared the selection of Ernst & Young. It was
chosen two weeks ago from a host of top firms like KPMG,
PricewaterhouseCoopers, IBM and Infosys.
Ernst & Young will also be involved with the FIU in selection of the vendor
and technological upgrades, estimated to cost Rs 10 crore.
Senior FIU officials told The Indian Express that with compliance of
”reporting entities” increasing every day and CTRs/ STRs piling up, the
task of tracking money laundering and terror financing was becoming a
daunting exercise. The Government, officials said, needed to adopt global
standards to scrutinise and map all transactions in the ”suspicious”
category.
With their data warehousing systems in place, the FIU hopes to map patterns
of money laundering and terror financing and issue immediate alerts to
enforcement and intelligence agencies. In the last few months, several CTRs
and STRs received by the FIU have been forwarded to these agencies,
resulting in cases being registered under the PMLA or exposing terror
finance trails.