A person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is involved in one or more of the following processes or activities connected with proceeds of crime, namely:— (a) concealment; or (b) possession; or…
Correspondent banking refers to a banking relationship between two banks, where one bank (the “correspondent bank”) provides banking services to another bank (the “respondent bank”), allowing the respondent banks to access services in foreign markets. Correspondent Banking relationships are essential in facilitating the cross-border payment system and vital to international trade and investments. A risk-based…
The Financial Action Task Force (FATF) is an international policy-making and standard-setting body dedicated to tackling money laundering, terrorist, and proliferation financing. It is a global money laundering and terrorist financing watchdog that sets international standards that aim to prevent these illegal activities and the harm they cause to society. The FATF constantly identifies and…
Enhanced due diligence (EDD) is a set of additional measures that financial institutions have to implement to check and monitor high-risk customers and unusual transactions for potential money laundering and terrorist financing (ML/TF) activities. Enhanced due diligence (EDD) is an in-depth KYC process that can help to identify high-risk customers including politically exposed persons (PEPs).…
Money laundering is the process wherein criminals attempt to conceal their booty and make an attempt to cover them as a legitimate source of income. The bill on money laundering described it as an offence (i) when a crime has been committed. (ii)There are proceeds or gains from the crime. (iii) There is a transaction…
Section 2[(wa) of PMLA Act 2002, states that a “reporting entity” means a banking company, financial institution, intermediary, or a person carrying on a designated business or profession. The Ministry of Finance vide notification dated May 03, 2023 (‘Notification’) has widened the ambit of the term “Reporting Entity” as defined in Section 2(1)(wa), read with…
The Prevention of Money Laundering Act, 2002 (PMLA) forms the core of the legal framework put in place by India to combat money laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005. Director, FIU-IND, and Director (Enforcement) have been conferred with exclusive and concurrent powers under relevant…
In the realm of risk management and compliance, Customer Due Diligence (CDD) is a pivotal player. The Customer Due Diligence meaning, often abbreviated as CDD, is a process that financial institutions, businesses, and other organisations use to gather information about their customers and clients to identify and mitigate risks such as money laundering, financing terrorism,…
Anti-Money Laundering (AML) regulations in India are governed by the PMLA (Prevention of Money Laundering Act, 2002), which requires financial institutions and other entities to implement robust measures to detect and prevent money laundering activities. The PMLA lays down the broad framework for AML compliance requirements applicable to banking companies, financial institutions, and other intermediaries.…
Banks in India offer a wide range of banking services to their customers, such as savings and Current Accounts, loans (personal, business, and mortgages), debit cards, ATMs, credit cards, export credits, corporate and retail lending, investment services, Treasury operations, and electronic banking options like UPI, ECS, mobile banking, NEFT, and RTGS, SWIFT & ISO 20022 messages,…