April 28, 2016
The government has asked its agencies dealing with economic offences to study the loopholes in the country’s banking laws to prevent ill-gotten money from leaving the country’s shores and facilitate the return of black money stashed away abroad, well informed sources said.
With the quantum of black money held by Indians abroad variously estimated at between $466 billion and $1.4 trillion, the idea is to get a fix on how the network operates so that the government is able to crack the nexus and deliver on its promise of getting back such ill-gotten assets.
“Pervading secrecy, cut-throat competition among private and international banks, along with the organised crime models, have all resulted in giving a boost to money laundering both in India and abroad,” said a government source, requesting anonymity.
Sources explained that such an exercise also became necessary after preliminary reports from the agencies and departments under the finance ministry reported that private banks in large numbers failed to present case studies by themselves about the modus operandi.
“Privacy is at the core of the functioning of private banks. So the government is left with few options when it wants to crack down on leads — also because money laundering involves multiple transactions to disguise the source of funds,” said the source. The move also comes against the backdrop of the recent global expose of International Consortium of Investigative Journalists (ICIJ) and over 100 global media organisations on off-shore funds of some powerful people globally, based on millions of leaked documents of a Panama law firm.