Top banks in India have reported a surge in suspicious transactions by companies in cash and overseas transfers since COVID-19. State Bank of India, Bank of Baroda, ICICI Bank, and HDFC Bank have started red-flagging such transactions that defy traditional company patterns.
Banks are keeping an eye on companies that have recorded a spike in trading, dealing with unrelated goods and services, or there’s a sudden outflow of money to other countries, said a report.
The Financial Intelligence Unit has been inspecting several transactions and even pulled up some of the large public sector banks for taking the mechanism of red flags “casually”, a senior bank official told ET. Regulations demand banks, non-banking finance companies and insurance companies to report suspicious transactions to FIU every month. The report suggests that there are around one million suspicious transactions reported to FIU annually.