RBI to share information on FDI inflows with IB, RAW

07 March 2016

The Reserve Bank of India (RBI) will share information related to inflows of foreign funds by way of foreign direct investments (FDI) with country's intelligence agencies, including the Intelligence Bureau (IB) and Research and Analysis Wing (RAW), to check black money from entering the country.

The decision was taken during a recent meeting of a government group, headed by revenue secretary, to check economic crimes.

The move comes after the cabinet secretariat expressed concern over companies in tax havens investing in the country, which suggested that the Central Economic Intelligence Bureau (CEIB) under the finance ministry should maintain a database of such entities and investments, a move, which was later rejected, official sources said.

The RAW is under the administrative control the cabinet secretariat.

The "Working Group on Intelligence Apparatus", representatives of Intelligence Bureau felt that it is important to have the information. It was decided that RBI should share with IB and cabinet secretariat, information on FDI, which actually enters the country, the sources said.

The move is in line with the government's thinking of increasing FDI inflows to the country owing to its attempts to liberalise trade and promote ease of doing business. This will help keep a track of such companies' source of funding.

The FDI comes either through automatic route (which gets recorded by RBI) or through Foreign Investment Promotion Board (FIPB), an inter-ministerial body under the Department of Economic Affairs, which is responsible for processing of FDI proposals and making recommendations for government approval.

In either case, concerned government agencies will not know whether the investment has actually come into India. The only organisation which will know when the investment actually comes into the country is RBI.

The RBI has also been asked to consider displaying this information on its website, government officials said.


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