SIT asks RBI to share data with agencies to check black money

Concerned over gaps in monitoring of trade payments, the Special Investigation Team (SIT) on black money has asked Reserve Bank of India (RBI) to establish an institutional mechanism to track illicit financial flows and share data with other law enforcement agencies, like the Enforcement Directorate (ED), the Directorate of Revenue Intelligence (DRI) and the Central Board of Direct Taxes (CBDT).

In a letter to RBI governor on August 11, the SIT headed by Justice M B Shah (retd) underlined the need for creating a data warehouse from where various agencies can gather relevant information for taking early appropriate action.

The SIT has emphasised on these aspects with the RBI in light of gaps in the regulatory framework.

 

"The data available with RBI could be cross checked with other information available with enforcement authorities and illicit financial flows could be curbed," the SIT said.

The Supreme Court appointed SIT had in the past asked the RBI to provide data on advance remittances and export outstanding of more than one year.

However, the SIT said the the data provided clearly showed that there are gaps in monitoring trade flows which are used by unscrupulous elements to take out precious capital outside the country, damaging the fabric of the Indian economy.

SIT feels that the data can be shared only by having one agency such as Central Economic Intelligence Bureau or any other agency, as a data warehouse.

"From the said data warehouse, various agencies can gather the relevant information for taking early appropriate action. This is so since the data available with one agency can be relevant to action expected to be taken by other Law enforcement agency," the finance ministry said .

At present, the RBI holds the information with respect to all types of foreign exchange transactions.

SIT has also asked the Revenue Department to identify a single point agency which could access the database relating to foreign exchange transactions and trade related payments and thereafter disseminate them to various enforcement agencies.

It feels that for controlling and tracking illicit financial flows out of the country, use of the RBI data by various law enforcement agencies, like the ED, DRI and CBDT, is of critical importance.

SIT has suggested that RBI gives access to foreign exchange transactions data of all authorised dealers available in Foreign Exchange Transactions Electronic Reporting System (FET-ERS) with other law enforcement authorities.

FET-ERS should capture the PAN (permanent account number) number of the importer or exporter and that the RBI should take necessary steps to get this done on an urgent basis.

As regards 'Exports Outstanding data', the SIT said huge amounts were found outstanding beyond a period of one year in violation of the Foreign Exchange Management Act and suggested that companies might have wrongly claimed duty drawbacks. The RBI maintains export realisation data in its Export Data Processing and Monitoring System (EDPMS) database.

"SIT has asked the ED, DRI and Ministry of Commerce to analyse the data of export outstanding and take necessary action in this regard," the finance ministry statement said.

RBI maintains export realisation data in its EDPMS database. The SIT has asked the RBI to impress upon the banks to inform regarding realisation of export proceeds on the EDPMS.

In the wake of the Bank of Baroda scam, the SIT had asked the RBI to institutionalise a mechanism for cross checking of advance remittances against 'Bill of Entry' irrespective of value of advance remittances sent.

RBI had informed the SIT that huge advance remittances running into billions of dollars were outstanding as on September 30, 2015, for which 'Bill of Entry' correlation has not been done.

SIT has now asked the RBI to get this co-relation completed at the earliest and inform it back.

It, however, expressed satisfaction over the IDPMS (Import Data Processing and Monitoring System) being set up by RBI by September, which will enable cross checking of each advance remittance against the Bill of Entry.

"Chairman, SIT in his letter requested RBI to develop, in consultation with Department of Revenue, an institutional online mechanism for sharing of data of all the above three databases being managed by the RBI i.. FET-ERS, IDPMS and EDPMS," the statement said.