Suspicious Transaction Reports (STR): What Banks and NBFCs Must Report to FIU-IND
Every bank account in India sits under a quiet, continuous monitoring obligation most customers never see — and the specific trigger for a report isn't the transaction amount, but whether it has a plausible economic explanation.
What FIU-IND is
The Financial Intelligence Unit – India (FIU-IND) is the central national agency responsible for receiving, processing, analysing, and disseminating information relating to suspicious financial transactions — it sits at the centre of India's anti-money-laundering reporting architecture, receiving reports from banks, financial institutions, and other reporting entities across the country.
The reports reporting entities must file
- Suspicious Transaction Report (STR) — the core discretionary report, based on a reporting entity's own assessment that a transaction is suspicious (detailed below).
- Cash Transaction Report (CTR) — for cash transactions above a specified threshold (commonly cited around ₹10 lakh, or a series of integrally connected cash transactions aggregating to that level within a month).
- Non-Profit Organisation Transaction Report (NTR) — covering specified transactions involving non-profit organisations, given the historical concern about NPOs being used as a channel for illicit fund movement or terrorist financing.
- Cross-Border Wire Transfer Report (CBWTR) — for cross-border wire transfers above a specified threshold.
What actually makes a transaction "suspicious"
Unlike the CTR (which is triggered by a simple, objective rupee threshold), an STR is a judgment-based determination by the reporting entity. A transaction is generally treated as suspicious where it:
- Gives rise to a reasonable ground of suspicion that it may involve proceeds of crime, regardless of the amount involved — a small transaction can trigger an STR just as readily as a large one, if the pattern is suspicious.
- Appears to have no economic rationale or bona fide purpose.
- Appears designed to give a legitimate purpose facade to what is actually an illegal purpose.
The confidentiality requirement — "tipping off" is prohibited
Reporting entities are prohibited from informing the customer or any third party that an STR has been (or is about to be) filed concerning their account or transaction — this "no tipping off" rule exists specifically to prevent a suspected launderer from being alerted and moving funds or destroying evidence before authorities can act. Bank staff handling STR filings operate under strict internal confidentiality protocols precisely because of this legal prohibition.
Reporting timeline
Reporting entities are required to file STRs with FIU-IND within a specified period of forming the suspicion (commonly referenced as within 7 days of the internal determination that a transaction is suspicious, following the entity's own internal escalation and review process) — the exact prescribed timeline should be confirmed against the current PMLA Rules.
What happens after an STR is filed
FIU-IND analyses the report (often alongside other reports and intelligence it holds) and, where warranted, disseminates relevant information to law enforcement and investigative agencies, including the Enforcement Directorate, for further action — filing an STR is the start of an intelligence and investigative process, not itself an accusation or legal action against the customer.