RBI Will Now Keep Track of Non-Cash Transactions
All the non-cash financial transactions will now be tracked by RBI by the infotech framework. This is a major step by govt. to keep a record of finances and invade black money, and along with this, it is also helpful to keep track of money flowing in and out of thousands of shell companies. Banks are planning to set-up an information technology (IT)-based mechanism to keep a tab on all the non-cash, financial transactions in the country.
Reserve Bank of India (RBI) had been asked to develop the IT infrastructure for this purpose, said Highly-placed government sources. The officials from the Ministries of Finance and Corporate Affairs have had a series of interactions with the RBI officials over the past one month to discuss the issue. Currently, the idea is to make the RBI the sole repository of such information, which will not be made available to other agencies such as the income tax department and the enforcement directorate as a default. Such agencies may be required to make specific requests to the central bank if they want information on a particular set of entities.
A data will be captured for all transactions irrespective of the size of the transactions, the larger ones would be relevant for enforcement purpose, said an official aware of the development. Under the Prevention of Money Laundering Act, banks and financial institutions are already required to alert the Financial Intelligence. Cash transactions of more than ₹10 lakh (including a series of transactions integrally connected to each other and exceeding ₹10 lakh in a month), need to be reported to the FIU.
After a transaction is concluded to be suspicious in nature it has to report to the unit within seven days. Sources said, all the track on these financial transactions is to curb black money and identify shell companies.
The Centre has shut down more than two lakh such entities. More than two lakh other firms that have not been carrying out operations have been sent notices. A decision would be taken on how many would be deregistered, depending on their responses
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