Observing that terrorists primarily use hawala channels to route their funds, the government on Wednesday said even the banking channels were a 'significant route' for movement of money by these elements.

"As per available reports, terrorists and terrorist organisations active in India are using different channels to fund their operations. They route their funds mainly through hawala and other informal means. Banking channels are also a significant route for movement of funds by such elements," Minister of State for Home Sriprakash Jaiswal said in reply to questions in the Rajya Sabha.

He said the government was pursuing a multi-dimensional approach to deal with terrorist operations and supporting states to neutralise their activities.

To a question on the recent observations of National Security Advisor M K Narayanan on the matter, Jaiswal said the NSA had recently recounted the methods adopted by terror outfits to generate funds and had pointed towards the reported 'misuse' of the formal financial system by them.

He said the revenue, security and law enforcement agencies were regularly sensitised to pursue an inter-agency approach to detect these channels the use of funds received by the terror groups.

"There is continuous coordination between Home, Defence, Finance and other Ministries, which are the administrative ministries of security sensitive sectors," he said, adding that proposals relating to such sectors were referred to the Home and Defence Ministries for vetting from the security angle.