FIU-India reporting: STR, CTR & CDD Guide for Exams

FIU-India reporting sits at the heart of every bank's anti-money-laundering machinery. And it is one of the most heavily tested areas in the IIBF KYC, AML and CFT certification. The Financial Intelligence Unit-India (FIU-IND) is the central national agency that receives.

Processes, analyses and disseminates information about suspect financial transactions to enforcement and intelligence agencies. For a banker. Understanding FIU-India reporting means knowing exactly which reports to file, the data each report must carry, and the strict statutory deadlines that flow from the Prevention of Money Laundering Act, 2002 (PMLA).

Get these basics wrong in an examination and you lose easy marks; get them wrong on the job and the bank faces penalties.

This guide breaks down the four principal report types, the PMLA framework that mandates them, the role of the Principal Officer, and the customer due diligence steps that feed the reporting pipeline. Use it alongside our JAIIB course and CAIIB course material to build a complete compliance foundation.

What Is FIU-India and Why It Matters

FIU-India was set up by the Government of India in November 2004 as the central. Independent body responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions. It functions as the nodal agency for coordinating and strengthening national and international efforts against money laundering and the financing of terrorism. FIU-IND is an administratively independent unit reporting directly to the Economic Intelligence Council headed by the Finance Minister.

Every reporting entity — banks, financial institutions and intermediaries — is obliged under Section 12 of the PMLA to furnish prescribed reports to the Director, FIU-IND. The reports are filed electronically through the FINnet (Financial Intelligence Network) gateway. Key points the exam tests:

• Mandate: Receive, analyse and disseminate financial intelligence, not to investigate or prosecute.
• Reports to: Economic Intelligence Council via the Department of Revenue, Ministry of Finance.
• Filing channel: FINnet 2.0 portal in a prescribed electronic format.
• Legal basis: Section 12 of PMLA read with the PML (Maintenance of Records) Rules, 2005.

Because FIU-India reporting underpins the entire AML/CFT regime, the official source material from FIU-India and the Reserve Bank of India Master Direction on KYC are the definitive references candidates should cross-check.

The Four Core Reports Under FIU-India Reporting

The backbone of FIU-India reporting is a set of mandatory reports, each with its own trigger, threshold and timeline. Memorising the table below is one of the highest-yield study activities for this paper.

Additional reports include the Cross-Border Wire Transfer Report (CBWTR) for inbound/outbound wire transfers above Rs 5 lakh. A crucial exam nuance: an STR has no monetary threshold — suspicion alone triggers it, and even a single attempted transaction that is not completed must be reported. Reinforce these distinctions with our mock tests and the interactive match game to lock the timelines into memory.

PMLA Framework and the Principal Officer's Role

FIU-India reporting does not happen in a vacuum — it is mandated by the Prevention of Money Laundering Act. 2002 and operationalised through the PML (Maintenance of Records) Rules, 2005. Section 12 of the PMLA imposes three core obligations on every reporting entity:

• Maintain records of all prescribed transactions for a minimum period of five years from the date of the transaction.
• Furnish information (the CTR, STR, CCR, NTR and related reports) to the Director, FIU-IND within the prescribed timelines.
• Verify and preserve the identity records of clients for five years after the business relationship ends.

To coordinate this, each bank must designate a Principal Officer (PO) and a Designated Director. The Principal Officer is responsible for monitoring transactions, ensuring the alerts generated by the AML system are reviewed, and filing reports with FIU-IND. The Designated Director (usually an MD or whole-time director) bears overall responsibility for compliance. The PO acts as the single point of contact between the bank and FIU-India.

The exam frequently tests the confidentiality (no tipping-off) rule: once an STR is filed or contemplated, the bank and its staff must never reveal to the customer that a report has been or may be made. Tipping off is itself an offence. Penalties under Section 13 of PMLA for failure to comply can range from Rs 10,000 to Rs 1 lakh per failure, imposed by the Director, FIU-IND. Candidates should review the official FATF recommendations, since India's PMLA framework is closely aligned with the 40 FATF recommendations on AML/CFT.

CDD, EDD and How They Feed FIU-India Reporting

Customer Due Diligence (CDD) is the front line that generates the intelligence behind FIU-India reporting. Without robust CDD, suspicious activity goes undetected and no STR is ever raised. The RBI Master Direction on KYC prescribes a risk-based approach with three intensity levels:

• Simplified Due Diligence (SDD): for low-risk customers such as small or basic savings accounts.
• Customer Due Diligence (CDD): the standard process — identify and verify the customer and beneficial owner, understand the purpose of the relationship, and conduct ongoing monitoring.
• Enhanced Due Diligence (EDD): for high-risk customers, including Politically Exposed Persons (PEPs), non-face-to-face customers, and complex or unusual large transactions with no apparent economic purpose.

For PEPs — individuals entrusted with prominent public functions in a foreign country — banks must obtain senior management approval before opening the account, establish the source of funds and source of wealth, and apply ongoing enhanced monitoring. The beneficial owner in a company is generally the natural person holding more than 10% of shares or capital (25% for certain entities under earlier norms; candidates should confirm current thresholds in the live Master Direction). Ongoing monitoring of these accounts is what surfaces the red flags — structuring, smurfing, rapid movement of funds, or trade-based money laundering (TBML) — that culminate in an STR being filed with FIU-India. Keep current on rule changes via our IIBF news feed and study blog.

Frequently Asked Questions

Conclusion: Turn FIU-India Reporting Into Exam Marks

FIU-India reporting rewards precise recall of report types, thresholds, timelines and the PMLA duties that bind every reporting entity. Master the STR-versus-CTR distinction, the seven-working-day STR rule, the five-year record-retention period, and the Principal Officer's role, and you will comfortably clear this section of the KYC, AML and CFT paper. Put your knowledge to the test now with our timed IIBF practice tests and reinforce the concepts until the timelines become second nature on exam day.