Mumbai: Banks will now have to report to the Reserve Bank of India (RBI) all cash transactions over Rs 10 lakh. This is being done to monitor unaccounted cash flows mainly for terrorist activities through the banking channels.
''We are already monitoring individually transactions above Rs 10 lakh. There is no problem in reporting it to the RBI,'' State Bank of India chairman Janki Ballabh said while affirming the bank's decision to comply with the apex bank's instructions last week.
RBI deputy governor GP Muniappan, in a meeting last week, asked bankers to follow the instructions on monitoring high-value transactions in line with the principles of ''know-your-customers'' followed by bankers internationally.
The RBI had asserted that banks are required to keep a close watch of cash withdrawals and deposits for Rs 10 lakh and above in deposit, cash credit or overdraft accounts and keep record of details of these large cash transactions in a separate register.
The central bank decided to implement this practice in India especially after the terrorist attacks in the US and India followed by large-scale movement of funds by banned terrorist outfits world over.