Now, banks set to monitor remittance accounts closely

NEW DELHI: The banking industry, hit by rising number of fraud cases and mounting level of bad assets, has decided to strengthen its compliance by keeping a close watch on accounts registering sudden remittances — inward and outward — as well as new ones. The move aims to prevent cases similar to the ₹6,000-crore foreign exchange scam at Bank of Baroda.

Banks would also closely monitor suspicious transaction reports issued by the income tax department. These reports were earlier ignored by lenders, sources said.

Accounts which see a sudden jump in deposits would also be scrutinised, a senior executive at a public sector bank said.

India topped the chart in global remittances in 2014 receiving $70 billion from immigrants abroad, according to World Bank.

“Banks have been taking necessary steps but will further monitor accounts where there are sudden remittances to ensure there are no discrepancies,” Ashwani Kumar, chairman, Indian Banks Association, told HT.

The Reserve Bank of India and the Central Vigilance Commission are also looking to put in place stringent whistle-blowing guidelines and know your employee norms to strengthen compliance. Banks would also have to report cases involving multiple transactions that take place from a single account in a day, even if they are lower than the $1-lakh threshold.