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Financial Crime Probe: Govt. to Crack Down on Non-Compliance

In a bid to curb financial crimes and ensure transparency in banking transactions, the government has introduced new measures to penalize institutions that fail to comply with regulations.

Compliance Requirements for Banks and Financial Institutions

According to Section 12 of the Financial Act, banks, financial institutions, and intermediaries are required to maintain accurate records of their transactions. However, if an institution fails to do so, the Director may impose a fine of up to Rs. 1 lakh for each failure.

• The Director is empowered to make inquiries or cause such inquiries to be made as he deems fit.
• If an investigation reveals that an institution has failed to comply with regulations, the Director can order the institution to pay a fine.

Procedures for Maintaining and Furnishing Information

The government has prescribed procedures and manners for maintaining and furnishing information by banking companies, financial institutions, and intermediaries. The Central Government, in consultation with the Reserve Bank of India, will regulate these procedures to ensure compliance with the law.

New Powers for Financial Crime Probe

The government has also introduced new powers to investigate and prosecute financial crimes. Under Section 16 of the Act, authorities can conduct surveys and searches to gather evidence of money laundering and other financial crimes.

• An authority conducting a survey or search may enter any place where an offence is believed to have been committed.
• The authority may inspect records, check for proceeds of crime, and require individuals to provide information.
• The authority may also seize records and property found during the investigation.

Enhanced Investigatory Powers

Section 17 of the Act allows the Director to authorize officers to conduct searches and seizures in cases where there is reason to believe that a person has committed money laundering or is in possession of proceeds of crime.

The new measures are aimed at strengthening the government’s ability to investigate and prosecute financial crimes, and ensuring greater transparency and accountability in banking transactions.