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Suspicious Transaction Reports
Every reporting entity shall furnish to FIU-IND information of all suspicious transactions whether or not made in cash.

Suspicions transaction means a transaction referred to in clause (h) of the rules, including an attempted transaction, whether or not made in cash which, to a person acting in good faith -

(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or

(b) appears to be made in circumstances of unusual or unjustified complexity; or

(c)  appears to have no economic rationale or bonafide purpose; or

(d)  gives  rise  to  a  reasonable  ground  of  suspicion  that  it may involve financing of the activities relating to terrorism;

 

Broad categories of reason for suspicion and examples of suspicious transactions for a banking company are indicated as under:

 

Identity of client

-        False identification documents

-        Identification documents which could not be verified within reasonable time

-        Accounts opened with names very close to other established business entities

Background of client

-        Suspicious background  or links with known criminals

Multiple accounts

-        Large number of accounts having a common account holder, introducer or authorized signatory with no rationale

-        Unexplained transfers between multiple accounts with no rationale

Activity in accounts

-        Unusual activity compared with past transactions

-        Sudden activity in dormant accounts

-        Activity inconsistent with what would be expected from declared business

Nature of transactions

-        Unusual or unjustified complexity

-        No economic rationale or bonafide purpose

-        Frequent purchases of drafts or other negotiable instruments with cash

-        Nature of transactions inconsistent with what would be expected from declared business

Value of transactions

-        Value just under the reporting threshold amount in an apparent attempt to avoid reporting

-        Value inconsistent with the client’s apparent financial standing

 

Broad categories of reason for suspicion and examples of suspicious transactions for an intermediary are indicated as under:

 

Identity of Client

-        False identification documents

-        Identification documents which could not be verified within reasonable time

-        Non-face to face client

-        Doubt over the real beneficiary of the account

-        Accounts opened with names very close to other established business entities

Suspicious Background

-        Suspicious background or links with known criminals

Multiple Accounts

-        Large number of accounts having a common account holder, introducer or authorized signatory with no rationale

-        Unexplained transfers between multiple accounts with no  rationale

Activity in Accounts

-        Unusual activity compared to past transactions

-        Use of different accounts by client alternatively

-        Sudden activity in dormant accounts

-        Activity inconsistent with what would be expected from declared business

-        Account used for circular trading

Nature of Transactions

-        Unusual or unjustified complexity

-        No economic rationale or bonafide purpose

-        Source of funds are doubtful

-        Appears to be case of insider trading

-        Investment proceeds transferred to a third party

-        Transactions reflect likely market manipulations

-        Suspicious off market transactions

Value of Transactions

-        Value just under the reporting threshold amount in an apparent attempt to avoid reporting

-        Large sums being transferred from overseas for making payments

-        Inconsistent with the clients apparent financial standing

-        Inconsistency in the payment pattern by client

-        Block deal which is not at market price or prices appear to be artificially inflated/deflated


 
whats new

 
NDPS Act, 1985

UAPA, 1967

The Prevention of Money Laundering (Amendment) Act, 2012 (Scanned Format)

The Prevention of Money Laundering (Amendment) Act, 2009 (Scanned Format)

The Prevention of Money Laundering (Amendment) Act, 2005 (Scanned Format)

The Prevention of Money Laundering Act, 2002 (Scanned Format)

WARNING

FIU-India does not seek any information from individuals. If any person receives any such letter/query, it is a fraud and it should be immediately reported to the Police and also brought to the notice of FIU-IND...more
 
 
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