With an aim to crackdown on money laundering activities and detect corporate misdoings at an early stage, the Ministry of Corporate Affairs will work closely with the Financial Intelligence Unit besides developing an early warning system at SFIO to detect frauds. 

Further to strengthen its capabilities, the Serious Fraud Investigation Office would set up a "state-of-art forensic lab" at an estimated cost of Rs 3.80 crore. 

Three Memorandum of Understanding (MoUs) were inked today -- two by SFIO and one by the Corporate Affairs Ministry. 

According to government officials, these MoUs would be help in exchanging critical information related to money laundering. 

The Corporate Affairs Ministry and SFIO have separately entered into preliminary pacts with the Financial Intelligence Unit (FIU-IND), which comes under the Finance Ministry. 

FIU has been playing a key role in collection and dissemination of information related to suspicious banking transactions under Prevention of Money Laundering Act 2002. 

Besides, SFIO has entered into a pact with National Institute of Electronics and Information Technology (NIELIT) -- under Communications and Information Technology Ministry -- would set up a forensic lab within the premises of SFIO. 

It would cost about Rs 3.80 crore and the project would be completed in two phases. 

These initiatives would facilitate development of a comprehensive Early Warning System (EWS) for detection of fraud. 

With regard to the early warning system, SFIO is studying various models. 

"We are looking at various models including 'RoboCop' (tool) used in the United States," SFIO Director Nilimesh Baruah said. 

'RoboCop' helps in alerting about various corporate irregularities by analysing their filings, among others. 

Meanwhile, the Ministry said that FIU-IND has been helping it and SFIO from time to time by supplying information on suspicious banking transactions. 

"Having access to banking information as well as expertise of FIU, the MoU will help SFIO in conducting its investigation in a more effective manner," the Ministry said in a statement. 

As per plan, SFIO is anticipated to prepare a comprehensive framework for fraud prediction model by June this year. The IT infrastructure for the proposed system is expected to be ready by the end of this year, while the pilot testing is anticipated to begin in September. 

Corporate Affairs Minister Sachin Pilot and senior government officials were present while signing the MoUs. (PTI)