FPJ Facts: What are FinCEN and FinCEN files? Why are Indian banks' names appearing in the suspicious transactions?

According to the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), several transactions went through Indian banks that were raised as suspicious, between 2010 and 2017, reported Business Standard.

These suspicious transactions were flagged as top-secret ‘Susp­icious Activity Reports’ or SARs.

Almost all major banks in India — public, private, and foreign — were listed. The top five receivers are Indian Overseas Bank, Allahabad Bank, Bank of India, State Bank of India, and Canara Bank. Meanwhile, topping the sending list was HDFC, Deutsche Bank (India operations), IndusInd Bank, Standard Chartered Bank, and State Bank of India.

All about FinCEN and FinCEN files:

  • The SAR list by FinCEN is based on the red-flag raised by banks. In case, banks suspect the transaction to be a case of money laundering, terror financing, drug dealing, and financial fraud.

  • FinCEN safeguards the financial system from such suspected transactions through the strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.

  • But recently, the documents of FinCEN were leaked to the International Consortium of Investigative Journalism (ICIJ). It is called FinCEN files.

  • These files have details of transactions that took place between 1999 and 2017 and these transactions are worth USD 2 trillion.

  • These documents contain financial details of not just the US banks but the international banking system. These files are closely guarded secrets by the system.

  • FinCEN files have more than 2,500 documents, most of which were files that banks sent to the US authorities between 2000 and 2017.

  • Between 2010 and 2017, according to the FinCEN Files, Indian banks received USD 482,181,226 from outside the country and transferred USD 406,278,962 from the country. These transactions were flagged to the US authorities.

  • While FinCEN files are documents of suspected transactions, it is not proof that the illegal act has been committed. To find wrongdoings, there is a need to probe further.

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