DoT, FIU-IND ink MoU to combat cybercrimes and financial frauds

• The Department of Telecommunications (DoT) and the Financial Intelligence Unit-India (FIU-IND) signed a comprehensive Memorandum of Understanding (MoU) to enhance information sharing and coordination on September 25.

• It will mark a new era of collaborative intelligence sharing between the Digital Intelligence Unit (DIU) of DoT and the country’s apex financial intelligence agency.

• DIU of Department of Telecom is a specialised wing established to devise comprehensive systems for curbing the misuse of telecom resources for cybercrime and financial fraud. 

Highlights of the partnership:

• This partnership represents a significant milestone in India’s comprehensive approach to cybersecurity, complementing existing initiatives such as the Sanchar Saathi, which have already helped disconnect 2.84 crore fraudulent mobile connections.

• The MoU will facilitate the development of Standard Operating Procedures for information sharing, enable feedback mechanisms to strengthen fraud detection analytics at the national level, and support the issuance of guidelines and red flag indicators to financial institutions for improved fraud prevention.

• Both agencies will maintain continuous consultation to adapt to evolving cyber threats and ensure the framework remains effective in protecting India’s growing digital economy.

• By combining DoT’s telecom intelligence with FIU-IND’s financial intelligence, authorities can now identify and act against fraudulent mobile connections before they cause financial damage to citizens.

• The FRI, developed through multi-dimensional analysis using inputs from various sources including DoT’s Chakshu platform (Sanchar Saathi), intelligence from financial institutions and law enforcement agencies, will provide early warning signals about potentially fraudulent mobile numbers.

• The shared FRI data will enable financial institutions to implement enhanced risk checks for mobile numbers flagged as high-risk during digital payment transactions.

Financial Intelligence Units (FIUs)

• Financial Intelligence Units (FIUs) are specialised government agencies created to act as an interface between the financial sector and law enforcement agencies for collecting, analysing and disseminating information, particularly about suspicious financial transactions, pertaining to money laundering, financing of terrorism and proliferation financing.

• FIUs are also responsible for disseminating analysis results.

• An FIU should obtain additional information from reporting entities and have timely access to required financial, administrative, and law enforcement information to undertake its functions properly. 

A few major considerations shape an FIU’s creation: 

i) Anti-money laundering and counter-terrorism financing laws.

ii) Existing law enforcement.

iii) The need for an authority that will receive, assess, and share financial information.

• FIUs have to conform to international standards, particularly the recommendations of the Financial Action Task Force (FATF).

• The Egmont Group is the international organisation for stimulating cooperation amongst FIUs across the globe.

Financial Intelligence Unit – India

• Financial Intelligence Unit–India (FIU-IND) was established by the government in November 2004 as the central national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions. 

• FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and financing of terrorism. 

• FIU-IND is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Union Finance Minister.

• FIU-IND is headed by the director, who is an officer of the rank of additional secretary to the government of India. It is an administrative FIU and does not investigate cases.

FIU-IND is a member of following International groups to partner with other countries in countering money laundering, terror and proliferation financing:

i) Financial Action Task Force

ii) Eurasian Group on Combating Money Laundering (EAG)

iii) Asia / Pacific Group On Money Laundering (APG)

iv) Egmont Group.

Functions of FIU-IND:

• Collection of Information: Act as the central reception point for receiving Cash Transaction reports (CTRs), Non-Profit Organisation Transaction Report(NTRs), Cross Border Wire Transfer Reports (CBWTRs), Reports on Purchase or Sale of Immovable Property (IPRs) and Suspicious Transaction Reports (STRs) from various reporting entities.

• Analysis of Information: Analyse received information in order to uncover patterns of transactions suggesting suspicion of money laundering and related crimes.

• Sharing of Information: Share information with national intelligence/law enforcement agencies, national regulatory authorities and foreign Financial Intelligence Units.

• Act as Central Repository: Establish and maintain national data base on the basis of reports received from reporting entities.

• Coordination: Coordinate and strengthen collection and sharing of financial intelligence through an effective national, regional and global network to combat money laundering and related crimes.

• Research and Analysis: Monitor and identify strategic key areas on money laundering trends, typologies and developments.

(The author is a trainer for Civil Services aspirants.)