Key Terms & Concepts — UPSC Mains
FIU-IND (Financial Intelligence Unit-India)
"India's central national agency for receiving, processing, analysing and disseminating information on suspicious financial transactions, established in 2004 under the Department of Revenue."
The Financial Intelligence Unit-India is the national nodal intelligence agency for India's anti-money-laundering and counter-terror-financing framework, established by an office memorandum dated 18 November 2004, functioning within the Department of Revenue, Ministry of Finance. Its core function is to receive Suspicious Transaction Reports (STRs), Cash Transaction Reports (CTRs) and other prescribed reports from regulated entities, such as banks, financial institutions and designated non-financial businesses, analyse them for patterns indicating money laundering or terror financing, and disseminate actionable intelligence to law enforcement and intelligence agencies. FIU-IND is an intelligence and analytical body, not an investigating or prosecuting agency. Once it identifies a suspicious pattern warranting further action, it passes the intelligence to agencies with investigative and enforcement powers, principally the Enforcement Directorate, which investigates offences under the Prevention of Money Laundering Act, 2002. This division of function, intelligence gathering and analysis at FIU-IND, investigation and prosecution at the Enforcement Directorate, is a frequently tested distinction and a common source of confusion. FIU-IND reports to the Economic Intelligence Council, chaired by the Union Finance Minister, and coordinates with financial sector regulators including the Reserve Bank of India, SEBI and IRDAI, each of which prescribes reporting obligations for the entities it regulates under the framework FIU-IND administers centrally.
A high-value GS3 institutional fact, frequently confused with the Enforcement Directorate or wrongly placed under the RBI; central to any answer on India's anti-money-laundering architecture and financial intelligence.
- 1 FIU-IND established by office memorandum dated 18 November 2004, under the Department of Revenue, Ministry of Finance.
- 2 Central national agency for receiving, analysing and disseminating information on suspicious financial transactions.
- 3 Receives Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) from regulated entities.
- 4 An intelligence/analytical body, NOT an investigating agency, the Enforcement Directorate investigates PMLA offences.
- 5 NOT under the Reserve Bank of India, despite the common misconception; it sits under the Ministry of Finance (Department of Revenue).
- 6 Reports to the Economic Intelligence Council, chaired by the Union Finance Minister.
- 7 Coordinates with sectoral regulators (RBI, SEBI, IRDAI) who prescribe reporting obligations for entities under their jurisdiction.
A bank's compliance officer who flags an account for unusual transaction patterns files a Suspicious Transaction Report with FIU-IND, which analyses the report and, if warranted, forwards actionable intelligence to the Enforcement Directorate for investigation.
