The government has now engaged multiple agencies, including Enforcement Directorate (ED) and Directorate of Revenue Intelligence (DRI), to carry out further investigation of the ‘clients’ of these 19 forex dealers and trail the source of cash flows.
The ban on forex dealers comes ahead of India’s scrutiny of anti-money laundering infrastructure later this month by the Financial Action task Force (FATF), the Paris-based inter-governmental body that sets standards and monitors each country’s effectiveness in combating money laundering and terror financing.
While ED investigated the Mumbai forex dealer involving illegal forex transactions worth Rs 2,000 crore, the DRI busted a similar syndicate where it detected forex smuggling of more than Rs 180 crore out of the country. These foreign currencies were provided by money changers in cash based on bogus documents, according to an assessment report prepared by the Central Economic Intelligence Bureau (CEIB).
“Forged travel documents and photocopies of passports were used to obtain foreign exchange. Further investigation revealed that persons in whose name such forex cards and foreign currency were obtained had never travelled abroad,” the CEIB report said. The CEIB is also a member of a joint working group for monitoring and ensuring that India meets the FATF guidelines.
