Terrorist groups and drug mafias often use middlemen, who open several accounts in a bank under a number of assumed identities, says Vicky Nanjappa
The HSBC case has revealed exactly how vulnerable financial institutions are to the subversive plans of a crime cartel.
The Intelligence Bureau points out that parking money in reputed financial institutions is a way of hoodwinking security agencies.
While HSBC has been accused of exposing the United States to terror funding and money laundering risks, Indian banks have been grappling with this issue for a while.
Banks are often chosen by terror elements, drug traffickers, money launderers etc as these institutions don't attract too much attention from the authorities and many transactions go unscrutinised because of the large number of customers.
Banks often don't quiz their customers too much about their accounts or track fund transfers, unless they receive a specific intelligence input. Banks guard the account details of their customers zealously and have even demanded court orders in specific cases before handing over such data.
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