Millennium Post

Black money: SIT asks RBI to share data with agencies

Concerned over gaps in monitoring of trade payments, the SIT on black money has asked Reserve Bank to establish an institutional mechanism to track illicit financial flows and share data with other law enforcement agencies, like enforcement directorate, DRI and CBDT.

In a letter to RBI governor on August 11, the Special Investigation Team (SIT) headed by Justice M B Shah (retd) underlined the need for creating a data warehouse from where various agencies can gather relevant information for taking early appropriate action.

In the light of "gaps in the regulatory framework", the SIT has impressed upon RBI the imperative need to establish the institutional mechanism for sharing of data with the RBI in its various data bases with the enforcement authorities.

The data available with RBI could be "cross checked with other information available with enforcement authorities and illicit financial flows could be curbed," the SIT said.

The Supreme Court appointed SIT had in the past asked RBI to provide data on advance remittances and export outstanding of more than one year.

However, the SIT said the the data provided "clearly showed that there are gaps in monitoring trade flows which are used by unscrupulous elements to take out precious capital outside the country, this damaging the fabric of Indian economy".

The SIT feels that the data can be shared only by having one agency such as Central Economic Intelligence Bureau (CEIB) or any other agency, as a data warehouse.

"From the said data warehouse, various agencies can gather the relevant information for taking early appropriate action. This is so since the data available with one agency can be relevant to action expected to be taken by other Law enforcement agency," the finance ministry said .

At present, RBI holds the information with respect to all types of foreign exchange transactions.
SIT has also asked the Revenue Department to identify a single point agency which could access the database relating to foreign exchange transactions and trade related payments and thereafter disseminate them to various enforcement agencies. 

SIT feels that for controlling and tracking illicit financial flows out of the country, use of RBI data by various law enforcement agencies, like Enforcement Directorate, Directorate of Revenue Intelligence and CBDT, is of critical importance.

The SIT has suggested that RBI gives access to foreign exchange transactions data of all authorised dealers available in Foreign Exchange Transactions Electronic Reporting System (FET-ERS) with other law enforcement authorities.

FET-ERS should capture the PAN number of the importer or exporter and that RBI should take 
necessary steps to get this done on an "urgent basis".

As regards 'Exports Outstanding data', the SIT said huge amounts were found outstanding beyond a period of one year in violation of FEMA and suggested that companies might have wrongly claimed duty drawbacks. RBI maintains export realisation data in its EDPMS database.
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