Bank stks dip as FinCEN leak names Indian banks for suspicious transactions

The FinCEN files so far have established sender-receiver connections for 406 transactions involving all major banks, including the country's largest, State Bank of India

loss — The FinCEN files so far have established sender-receiver connections for 406 transactions worth over $482 million involving all major banks in the country

2 min read Last Updated : Sep 21 2020 | 3:49 PM IST

Shares of IndusInd Bank, Bandhan Bank, and State Bank of India fell like a pack of cards after Financial Crimes Enforcement Network (FinCEN) leaks said almost all Indian banks could be part of the suspicious transactions.

Between 2010 and 2017, a number of Indian banks, irrespective of ownership – public, private and foreign -- helped facilitate transactions red-flagged by the US Treasury Department's Financial Crimes Enforcement Network (FinCEN) for suspected money laundering, terrorism, drug dealing and financial fraud, latest leaks suggest.

The FinCEN files so far have established sender-receiver connections for 406 transactions involving all major banks, including the country's largest, State Bank of India. According to the leaks Indian banks received $482,181,226 from outside the country and transferred from India $406,278,962. These transactions were red flagged to the US authorities. READ DETAILS HERE

International Consortium of Investigative Journalism (ICIJ) obtained the top-secret Suspicious Activity Reports or SARs, worth more than $2 trillion globally. These transactions are not outright evidence of frauds or proof of nefarious activities, but are red-flagged by the US authority as suspicious.

While the data dump is available on the organisation’s website, so far it has meticulously tracked down 18,153 transactions totaling $35 billion, in which links between both sending and beneficiary banks have been established. The transactions were done between 2000 and 2017.

Among the Nifty Bank constituents, IndusInd Bank tumbled 8.3 per cent to hit an intra-day low of Rs 562 per share. Besides, Bandhan Bank tanked 7 per cent, RBL Bank (6.6 per cent), Punjab National Bank (5.6 per cent), and IDFC First Bank (6.4 per cent). That apart, HDFC Bank, Federal Bank, SBI, Bank of Baroda, Axis Bank, and ICICI Bank were down between 0.3 per cent and 4.5 per cent at 2:45 pm. In comparison, the Nifty50 index was down 2 per cent, or 222 points, at 11,283 level. The index eventually closed 2.46 per cent lower.

At the index level, Nifty Bank closed 3.36 per cent lower. Meanwhile, Nifty Private Bank index and Nifty PSU bank index settled 3.7 per cent and 4.39 per cent lower, respectively.