India may soon get details of questionable fund diversions made via Gulf countries

The government of India is planning to sign information-sharing agreements with key countries of Middle East to gain access to financial records and various details about firms that are owned or founded by Indian firms or promoters and functioning in those countries. 

After growing evidences of local promoters indulging in questionable transactions routed through Gulf countries, the government of India has decided to enter into an agreement with the key Middle East nations; the Economic Times quoted a government official as saying. Since, most of these shell companies and accounts are operating in place like, Dubai Free Trade Zone and similar establishments; it is hard to get information for the government. 

If such an agreement is signed then it would be easy for investigating and law enforcement agencies in India to access the financial details of the suspected shell companies and nab loan defaulters, the report quoted industry experts. 

According to the report, agencies in India with some help from various forensic investigators have unveiled many suspicious transactions – fraud, round-tripping, siphon off money while examining loan defaulters’ cases. 

The banking channels of the Gulf countries are misused by many Indian promoters to divert their money and an agreement is much needed to ensure that Indian agencies can access the information and transaction details. At present, the local laws in these countries are preventing India’s agencies to access the information. 

Officials from finance ministry will be participating in the discussions regarding this agreement and it is expected to be signed sometime this year itself, the daily quoted an official as saying.

• Financial transaction
• Dubai fund transfer