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Govt, RBI plan setting up database to track all non-cash transactions: Report

The move is aimed at widening the government's crackdown on black money and will help RBI establish money trails

July 09, 2018 / 12:47 PM IST

The Centre and the Reserve Bank of India (RBI) are planning to set up a database or a 'search engine' to track  all non-cash financial transactions in the country, the Times of India reported.

The move is aimed at widening the government's crackdown on black money and will help RBI establish a money trail to investigate money laundering cases and operations of shell companies.

The new platform will allow RBI to record all non-cash transactions and share them on a need-to-know basis, a senior government officer told the newspaper.

"It is not going to be available on tap but will be shared based on a specific request," the officer was quoted as saying.

The RBI has reportedly held preliminary discussions on the matter after the finance ministry, income tax department and some investigating agencies deliberated on it in order to widen their scope of cracking down on shell companies and money laundering.

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It is not clear whether the proposed tool will be sufficient to help investigating agencies track transactions meant to siphon off money. Tracking all transactions related to an entity and its key functionaries may be difficult in the current setup, officials told the paper.

Also read — What are shell companies? All you need to know

The government feels that a trail of transactions is crucial to get rid of shell companies. Theoretically, shell companies are companies without active business operations or significant assets. They can be set up by business people for both legitimate and illegitimate purposes.

These entities may route funds through a maze of companies and earn a commission for it.

As of now, the Financial Intelligence Unit tracks suspicious transactions and all cash transactions of over Rs 10 lakh.
Moneycontrol News
first published: Jul 9, 2018 12:47 pm
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