Suggesting strong measures to track black money, accounting regulator the Institute of Chartered Accountants of India (ICAI) today said new foreign banks should be granted licences only if they agree to furnish details on "investment made by Indian people outside India".
Apart from this, the ICAI also pitched for making it compulsory for revealing the source of funds of foreign donations coming into India to prevent money laundering.
The ICAI has constituted a group to provide necessary inputs on addressing the issue of black money, 'benami' transactions and money laundering and it is expecting to submit recommendations to the Central Board of Direct Taxes by September or October.
"If any foreign bank comes to India we should get a declaration [from it] that any investment made by Indian people outside India, they [bank] have to provide details about it and they have to agree for it if they want a licence [to operate in India]," ICAI President G Ramaswamy told reporters on the sidelines of annual convocation held here.
Stating that ICAI is working how banking sector could respond to the grave problem of black money, he said information which is in the interest of nation must be shared by the foreign financial institutions with Indian authorities.
The accounting regulator is also of the view that access should be allowed to know about the source of funds of any donation flowing from abroad into India.
"We must have right to collect information about who is giving money [donation]... How this money is utilised ... If not then why it is not utilised. The main idea is that the foreign donation should not act as a case of money laundering," he stressed.