FinCEN files: Major Indian banks figure in suspicious transactions list

Banks say they themselves red-flagged the transactions to RBI, authorities

Between 2010 and 2017, several transactions went through Indian banks that were flagged as top-secret ‘Susp­icious Activity Reports’ or SARs by the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for suspected money laundering, terror financing, drug dealing, and financial fraud. 

Such transactions were part of $2 trillion suspicious transfers flagged by the top US authority in the FinCEN list. The International Consortium of Investigative Journalism (ICIJ) obtained the data that traces these global transactions, which happened between 1999 and 2017. Part of this data was released by the consortium on its website. 

Almost all major banks in India — public, private, and foreign — witnessed these transactions. Banks say they themselves red-flagged the transactions as suspicious to the Reserve Bank of India (RBI) and relevant authorities. And that's how their names reached the FinCEN list. 

It must be noted that these transactions are not outright evidence of fraud or proof of nefarious activities. The FinCEN Files most likely accumulated the transaction information provided by global banking regulators as part of their coordinated effort to fight suspicious transactions, say bankers. So far, the ICIJ has meticulously tracked down 18,153 transactions, totaling $35 billion, in which links between both sending and beneficiary banks have been established. 

In India’s case, the FinCEN Files, so far, have established sender-receiver connections for 406 transactions involving all major banks, including the country's largest, State Bank of India. According to the FinCEN Files, Indian banks received $482,181,226 from outside the country and transferred $406,278,962 from the country. These transactions were flagged to the US authorities. 

 So far, ICJI has named these Indian banks in the dubious transactions: State Bank of India, Punjab National Bank, Union Bank of India, HDFC Bank, IndusInd Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, Indian Overseas Bank, Canara Bank, Bank of Maharashtra, Karur Vysya Bank, Tamilnad Mercantile Bank, Standard Chartered Bank (India operations), Bank of Baroda, Bank of India, Allahabad Bank, Indian Overseas Bank, Indian Bank, Deutsche Bank (India operations), UCO Bank, Karnataka Bank, RBS, Andhra Bank, and Vijaya Bank.  

Standard Chartered Bank, in a single transaction, transferred Merrill Lynch Bank Suisse $8,173,378 on July 9, 2011. Bank of India received $119,548,135 in 19 transactions from DBS Bank between November 4, 2015, and April 14, 2016.  

HDFC Bank sent Standard Chartered Bank $327,999,890 through 11 transactions between September 24, 2012, and February 15, 2013.  IndusInd Bank transferred HSBC $8,260,868 between June 13, 2008, and November 7, 2012, in 55 transactions. 

SBI transferred $5,791,055 to DNB ASA in nine transactions between January 25, 2012, and October 9, 2012. SBI received $ 23,325,000 from Rak Bank through six transactions between March 2, 2014, and March 23, 2014.   

State-owned Canara Bank received $2,761,523 from National Bank of Ras Al-Khaimah between July 24, 2013, and November 7, 2013, through 20 transactions. Bank of India received $11,214,476 from Rizal Commercial Banking Corporation in 16 transactions between January 13, 2010, and December 23, 2010.