India renews efforts to clamp down on terror funding

Indian Banks’ Association (IBA) has renewed efforts to tackle the menace of terrorism finance in India.

Though there are no figures available so far on how many transactions have been made through the country’s banks, IBA has taken it up seriously. IBA held an interaction with a high-level delegation from the US on September 11 to know how the country was tackling the issue. IBA is already working on Credit Information Bureau of India Ltd (CIBIL)’s pilot data sharing project.

IBA’s interaction was held with Patrick O’ Brien, who is the assistant secretary, office of terrorism and financial intelligence (TFI), US treasury department. Experts feel it was post ‘9/11’ that interest rates on home loans were slashed by banks in the US resulting in a phenomenal increase in the loanbook. This resulted in the present financial turmoil in the country.During a presentation, Brien had depicted the international approaches to combat illicit finance. The idea was to exchange information and gain a better understanding of the implementation of India’s framework for anti-money laundering and counter-financing of terrorism (AML/CFT).

Some of the Indian bankers, who interacted with the US delegation, told FE that bankers in the US were impressed with the banking system in India. IBA CEO K Ramakrishnan said that the American banking community was impressed after knowing that we in India have a well-regulated and strong banking sector. Still, the need was felt on ways to take our banking system to the next level. This would help avoid any terrorist group do any transaction through our banking system.

Terrorists need money to execute the sabotage activities. But their efforts can be thwarted through measures like know your customers and by strengthening the reporting system, feel experts. “More than terrorist finance, we also discussed how to strengthen ourselves on the security and compliance front,” said MV Nair, CMD, Union Bank of India, who was also present during the interaction. “We also discussed the coordinated approaches being made by the regulatory authorities in our countries, added Nair.

Source: Indian Express Newspapers