SIT asks RBI to share black money data with govt agencies

The Special Investigation Team on black money has asked Reserve Bank to develop an institutional mechanism to share data with enforcement agencies to track illicit fund flows out of the country.

The SIT headed by Justice M B Shah (retd), in an August 11 letter to the RBI governor, impressed upon need to establish an institutional mechanism for sharing of data and stressed on effective sharing of information between various government departments.

"Chairman SIT has asked RBI for an institutional mechanism for sharing of data in its various databases with the enforcement authorities," a Finance Ministry tweet said today.

It has asked banking regulator RBI to develop an institutional mechanism to track illicit financial flows out of the country. The Supreme Court appointed SIT was set up to suggest methods to curb black money in the economy.

The SIT feels that the data can be shared only by having one agency such as Central Economic Intelligence Bureau (CEIB) 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," the SIT said. It said since the data would be available with one agency, it can be relevant to action expected to be taken by other law enforcement agencies.

At present, RBI holds the information with respect to all types of foreign exchange transactions under various categories. "SIT feels that for controlling and tracking illicit financial flows out of the country, use of RBI data by various law enforcement agencies, like Enforcement Directorate, Directorate of Revenue Intelligence and CBDT is of critical importance," the Finance Ministry further added in a statement today.

SIT feels that for controlling and tracking illicit financial flows out of the country, use of RBI data by various law enforcement agencies, like Enforcement Directorate, Directorate of Revenue Intelligence and CBDT, is of critical importance.

The 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 number of the importer or exporter and that 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 FEMA and suggested that companies might have wrongly claimed duty drawbacks. RBI maintains export realisation data in its EDPMS database.

"The SIT has asked the Enforcement Directorate, Directorate of Revenue Intelligence 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. SIT has asked 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 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 RBI i.e. FET-ERS, IDPMS and EDPMS," the statement said.