The top-secret documents of the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) have unveiled India as the center of money-laundering and terror-financing in the region.
The leaked documents revealed that 44 of the biggest Indian banks, including state-owned entities, have been involved in suspicious transactions since 2011, and were tagged in the Suspicious Activity Reports (SARs) by FinCEN.
These banks have made 3,201 illegal transactions to launder $1.53 billion since then. The development has raised serious questions as to who, where, and why the money was laundered.
Several publications, including some Indian newspapers, have revealed that FinCEN had flagged several transactions made between 2010 and 2017 as top-secret SARs for money laundering, terror financing, and financial fraud.
These transactions are included in the FinCEN list of $2 trillion suspicious transfers flagged by the US authority. Six Pakistani banks are also part of the list.
The data of these transfers have been obtained by the International Consortium of Investigative Journalism (ICIJ), according to which almost all small and large Indian banks are involved in dubious transactions.
The leaked documents suggested that diamonds and gold, including other precious jewels, were used to launder the cash. The Indian Premier League (IPL) has been a hub of this illegal practice.
The state-owned Indian banks involved in around 300 illegal transactions include Punjab National Bank, State Bank of India, Bank of Baroda, Union Bank of India, Canara Bank, and others.
Whereas, HDFC Bank, ICICI Bank, and Axis Bank are some of the private banks mentioned in the SARs, according to the foreign media. HDFC Bank is told to be the top sender with transactions of over $327 million.
The data revealed that the foreign branches of Indian banks, such as the Canadian branch of State Bank of India and the UK branch of Union Bank of India, have been used by the clients to withdraw the money.
The FinCEN report also recommended that the global watchdogs like the Financial Action Task Force (FATF) and the Anti Money Laundering Task Force should take measures to control money laundering.
The development has come months after a United Nations report identified a significant number of terrorist groups in Kerala, Karnataka, and Assam.
Following the report, the Indian government, wishing to see Pakistan added to the FATF blacklist, will be in hot waters when the annual FATF meeting is called in October.