Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday said not every off-shore company opened by an Indian national need to be illegitimate and that this will be primary the task of the probe team in which the central bank has also been co-opted.
The Reserve Bank of India (RBI) is investigating the recently leaked Panama files of law firm Mossack Fonseca, where about 500 Indians, including business people and Bollywood actors were found to have accounts in offshore locations.
"We are in the investigation team on 'Panama Papers'. We will have to see what is legitimate and what is not. That is a part of the investigation process," Rajan told a press conference here after presenting the monetary policy for this fiscal.
RBI Governor Raghuram Rajan in the post-policy conference on Tuesday said having foreign accounts was not an offence per se. Under the liberalised remittance scheme (LRS), any Indian can legally take out up to $250,000 per financial year for various purposes.
"It's important to remember that there are legitimate reasons, too, to have accounts overseas."
Deputy Governor H.R. Khan said the primary investigation into the matter will only determine if any violation has taken place.
"A lot of things are permitted, a lot of things aren't. There are grey areas too," Khan said. "All of it will be known once the investigation is complete."
The comments come a day after Prime Minister Narendra Modi ordered a multi-agency probe team on the expose, conducted by the International Consortium of Investigative Journalists (ICIJ) along with over 100 global media organisations, dubbed the "Panama Papers".
"A multi-agency group is being formed to monitor the black money trail," Finance Minister Arun Jaitley had told reporters after he met with the prime minister.
The team will comprise officers from the Central Board of Direct Taxes' Financial Intelligence Unit, the board's Tax Research Unit, and also officials from the Reserve Bank of India, the finance ministry said in a statement.