Financial Intelligence Units (FIUs) exist in many developed and developing countries. India will have one very shortly. The purpose of an FIU is to prevent terrorist financing and any other illicit use of money. It is the duty of the banks and financial institutions to report any suspicious transactions under KYC (know your customers) norms. The Institution or individual, who reports the suspicious transaction is not liable to any civil proceedings, however, they will be liable to pay a fine if they don't report suspicious transactions.
India will finally have a Financial Intelligence Unit (FIU) for tracking money laundering offences. The cabinet, on November 11, 2004 finalized its decision to set up a "Financial Intelligence Unit - India" (FIU-IND).
Money launderers manipulate their illicit proceeds to hide or disguise their true nature of origin, location, disposition and movement, with the ultimate intention of integrating these proceeds from criminal activity into and through the legitimate economy. The illicit source can be many from arms trade and smuggling to drug trafficking, prostitution, activities of organized crimes, embezzlement, insider trading/security related scams, bribery, kidnapping, extortion rings and computer fraud, which generate substantial amounts of profits.
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