Sunday, February 3, 2013

Bank Account Under Surveillance


Finance Ministry forms data bank to check black money

In order to check black money and tax evasion, an online data bank is being setup by the Finance Ministry for effective coordination and dissemination of various inputs pertaining to illegal funds.
The online system, which would act as data bank for financial intelligence sleuths, named ‘Virtual Office’ will help in monitoring of Suspicious Transaction Reports (STRs) generated by Financial Intelligence Unit-India, an agency tasked with receiving, analysing and disseminating information relating to suspect financial transactions to enforcement agencies and its foreign counterparts.
It will have a representative each from Central Board of Direct Taxes (CBDT), Directorate General of Revenue Intelligence (DRI), Central Economic Intelligence Bureau (CEIB), Directorate General of Central Excise Intelligence (DGCEI) and FIU-Ind.
India has lost a whopping $123 billion in black money during in last decade, according to a report by a U.S.-based research and advocacy organisation on ‘Illicit Financial Flows from Developing Countries:2001:2010’
As many as 13, 871 STRs were disseminated by the FIU-Ind during 2011-12.
Of these, a highest of 10,956 were passed on to CBDT, 1,615 to Enforcement Directorate, 1,130 were shared with CBEC, DRI and DGCEI, 117 STRs were shared with Securities and Exchange Board of India (SEBI), 51 with Reserve Bank of India (RBI) and two with Insurance Regulatory and Development Authority (IRDA).
An STR is a transaction, of Rs. 10 lakh and above, which gives rise to a reasonable ground of suspicion that it may involve the proceeds of a crime through drug trafficking, gun running, and illegal imports and exports of goods.
“It has been decided to set up a virtual office to monitor the feedback on the STRs disseminated by FIU-Ind. The Virtual office shall be provided administrative support by FIU-Ind,” an order issued by Finance Ministry said.
“The virtual office would enable any member agency to generate a profile of an evader or defaulter and trace his various activities. The exchange of information related to any STR, income and service tax evasion, and excise duty among others would become faster,” a Finance Ministry official said.
A feedback report generated through the system will be submitted to Revenue Secretary, Finance Ministry every month.
“A closed user group (CUG) will be created on the National Informatics Centre (NIC) email portal for the members of the virtual office to interact with one another and for sending feedback to FIU-Ind regularly.
“For this purpose, all the nominated officers would obtain an NIC email ID and communicated the same to FIU-Ind at the earliest. FIU-Ind shall thereafter create a CUG and inform its details to all the members of the virtual office,” the order said.
The functions of the virtual office would be subsumed by the FINex portal of FINnet (the portal through which the law enforcement agencies would interface with FIU-Ind) as soon as it becomes fully operational, it said.
How safe is your bank’s deposit locker?
Robbers recently broke into the strong room of a Punjab and Sind Bank branch in Jalandhar and emptied out 36 lockers in an incident that stands out as a grim reminder of the abysmally poor security infrastructure at financial facilities in the country.
Shockingly, the bank promised 'safe'deposit locker facility to its customers — there  were as many as 255 such lockers at the branch — and charged for the service.
Yet, the bank made no attempt to ensure the safety of the valuables kept in the lockers.  There were no cameras in the strong room and not even a security guard.
The absence of security at the bank that housed the lockers was almost an open invitation to the robbers. The bank deserves no credit for the 220-odd lockers that the robbers chose to ignore — probably they were short of time.
The bank was unaware of the robbery till a cleaner informed the manager. People who had kept their valuables in the 36 lockers have lost all they had stowed away.
The incident is a reminder of a burglary at the Chirgaon branch of the Central Bank of India in Jhansi, Uttar Pradesh. As many as 45 lockers had been robbed in the November 2010 episode.
The victims of the robbery are yet to get any compensation. After approaching the bank, the regulator and even the finance ministry, they are now trying to get justice through the apex consumer court through a class action suit.
As the regulator has failed to ensure compliance of its directive on security systems at banks, the finance ministry must step in. It should mandate that every bank get a security certification, which should be reviewed annually.
The ministry also has to put in place a formula for compensation in such cases.
The package should not only include compensation for the  monetary loss suffered as a direct  result of the loss of jewellery or cash in the locker but also for any consequential loss caused on account of loss of property papers and other documents.
It should also incorporate punitive damages.
Arushi Gupta: My mother has a locker in a branch of a public-sector bank in Preet Vihar since 2004. Last December, she had opened the locker and found everything in order.
But on January 9, she found all the jewellery missing and the locker completely empty. There were no signs of a break-in -- it seems like an insider's job. But the bank does not seem bothered by our complaint. The police too are not doing much on our FIR.  What should we do?
Pushpa Girimaji: Find out if the bank has received similar complaints from others who have lockers at the branch. File an RTI application for the information— if there are other complaints, it will help you in establishing theft.
You should also find out how fool-proof is the bank’s security system? Who keeps the locker keys? Are they always kept under lock and key or can everyone access it?
Check on the person who handles the keys. Also, between December and January, did the person in charge of the locker go on leave, entrusting the keys to someone else? If so, who was it?
You can also ask the bank for footage of the strong room —this will show if any unauthorised person went there. This is the investigation that the police should conduct -- speak to senior officers and urge them on. 
Try to put together a list of all your jewellery items and their valuation and file a complaint before the consumer court.

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