India Post global money transfer comes under ED scanner

ED looking at funds transfer for suspected terror-financing and Hawala-like scams

PTI | July 6, 2010



Global money transfer and banking operations of the country's postal department are being scanned by the Enforcement Directorate and other agencies for suspected terror-financing and Hawala-like transactions.

At present, there are no other official channels, besides the pure banking route, to transfer or receive money from abroad.

The Department of Posts had started this service in association with US-based Western Union Financial Services in April 2001 and customers can send or receive money from 205 countries.

According to top Finance Ministry sources, the ED and the Financial Intelligence Unit (FIU) -- an agency to monitor suspect financing in Indian financial channels -- have initiated steps to check the remittances and transactions on the wires on a "real time basis".

In 2008-09, the 'India Post' had delivered remittances to the tune of more than Rs 7,649 crore.

While the ED has asked 'India Post' to keep a check on all "kinds of transactions" and inform it of suspect transactions, the FIU has asked the service provider to strictly comply with the reporting norms.

Under the provisions of the Prevention of Money Laundering Act (PMLA), all banking entities or financial intermediaries who facilitate telegraphic or wire transfers or electronic remittances have to report the nature and value of the transactions to the FIU.

"Also, the banking operations conducted by the India Post have been largely unregulated. There are many small accounts with a lot of money. The enforcement agencies are now tracking the remittances and withdrawals," a source said.

The international money transfer service is currently available from 8,511 post offices.

Enforcement agencies believe that this step to monitor India Post network would help them track down suspect financial transactions and further share it with internatioanl agencies to combat money laundering and financing of terror.

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