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Possible al Qaeda funds were routed through banks in Kerala'

Possible al Qaeda funds were routed through banks in Kerala'

Publication: The New Indian Express
Date: October 27 2004

It was the American intelligence agencies probing into the  9/11 terrorist attacks that first intercepted the rampant misuse of  Indian banking channels for transferring huge chunks of money from  one country to another.

Top sources told this website's newspaper that the US investigators  had zeroed in on a transaction amounting about Rs 600 crore that had  been sent to the New York branch of the State Bank of India from the  UAE in violation of laid down guidelines.

Though there was no conclusive evidence to prove that this amount  had reached the al Qaeda network, US agencies strongly believe that  this amount was part of the terror funding funnelled into America by  Laden men.

Following this, a huge fine was slapped on the SBI for not following  strict norms that would possibly have prevented the transaction,  sources said. The fine is estimated to be around US$ 100,000. An  alert was also sent to India spurring intelligence agencies to  launch a probe into the issue, which eventually led to the  unearthing of transactions through five leading banks and several co- operative banks in North Kerala.

The Reserve Bank of India, sources said, has already completed its  investigation into the role played by banks in Kerala. ``They've  definitely erred. Even basic norms were not followed while  entertaining huge transactions. The RBI will have to issue more  stringent norms to insulate the system from similar possible  misuse,'' sources said.

The RBI, while pulling up officials of all banks that figure in the  Centre's list, has also penalised them with huge fines. ``All banks  have paid the fine. They've also given an undertaking that  henceforth RBI guidelines would be strictly adhered to,'' sources  said.

The RBI, meanwhile, has introduced an elaborate `know your customer'  format with a view to preventing any more goof-up.

SEAFOOD COMPANIES NOT REGISTERED: In a related development, the  Marine Products Export Development Authority (MPEDA) has found out  that none of the seafood companies that figure in hawala list has  been registered with it. The Home Ministry had revealed the names of  Good Luck Seafood, Mumbai, and Kozhikode-based National Seafood,  Western Seafood, Oasis Corporation, United Seafood, and Asiatic  Agency as those figuring in the list.

``We've checked through our offices in Mumbai and Kozhikode. None of  these companies is registered. The MPEDA is not a regulatory  authority. We'll come into the picture only if any export-related  complaints are raised,'' MPEDA sources said.

``The practice of laundering money through front companies is a time- tested strategy. We've inputs that this was resorted to even during  the days of the Soviet Union to bring in funds for the Communist  parties. But this episode once again shows how such devices can  still be relied on for laundering money,'' sources pointed out.

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