Money laundering: Finance ministry puts out list of 9,500 ‘high risk’ finance companies

Finance ministry sets a list of 9,500 ‘high risk’ finance companies


Financial Intelligence Unit (FIU) below the finance ministry has published a listing of nearly 9500 non-banking monetary companies (NBFCs) which were categorised as ‘high risk financial associations’.
The list published by FIU-India on its own site indicates the titles of NBFCs which have been categorised ‘high risk’ and discovered non-compliant to the Prevention of Money Laundering Act (PMLA) guidelines according to January 31.
Following the November 2016 demonetisation of Rs 500 and Rs 1,000 notes, NBFCs and several rural and urban cooperative banks had begun under the scanner of the income tax division along with the Enforcement Directorate for illegally changing banned currency notes of men and women who had unaccounted income.

A lot of these NBFCs and cooperative banks were found converting prohibited currency notes by receiving money as trapping and deposits back-dated fixed deposits and cheques in spite of how the RBI had prevented them from accepting such deposits.

In accordance with the PMLA, all NBFCs need to appoint a principal officer in the financial institution and report all suspicious and money transactions of Rs 10 lakh and over to the FIU. Section 12 of PMLA additionally needs “every reporting thing to maintain records of all trades and to verify the identity of their clients and their owners in the way prescribed” to the FIU.

These things are also required to maintain records of trades and identity of clients for five decades.

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  • Finance ministry sets a list of 9,500 ‘high risk’ finance Businesses