Although, there are several cheque bounce reasons to be considered such as incorrect date mentioned on the cheque, signature mismatch, mismatch of the amount and figures, damaged cheque, overwriting of the cheque, etc. The principal reason for a cheque bounce is insufficient funds. If a cheque is dishonoured because of insufficient funds in the payer’s…
Maintaining client identity records is a core compliance obligation for banks and financial institutions under the Prevention of Money Laundering Act (PMLA). This requirement is designed to promote transparency, accountability, and support for law enforcement in the fight against money laundering and financial crimes. What Records Must Be Maintained Banks and financial institutions must maintain…
In today’s banking environment, verifying client identity under the Prevention of Money Laundering Act (PMLA) is more than a regulatory requirement—it is a cornerstone of financial integrity. By ensuring robust identity verification and record-keeping, banks not only comply with the law but also safeguard themselves against criminal misuse, build customer trust, and strengthen the resilience…
Under the Prevention of Money Laundering Act (PMLA), reporting entities are required to furnish transaction and client-related information to the Director, Financial Intelligence Unit – India (FIU-IND), through procedures defined in consultation with their regulators. Typically, this process is handled via the institution’s Principal Officer, who acts as the nodal point for compliance. Strict timelines…
The Prevention of Money Laundering Act (PMLA) places significant compliance responsibilities on banks, financial institutions, and other reporting entities. These entities must maintain robust systems for Client Due Diligence (CDD) and record-keeping, while ensuring timely reporting to the Financial Intelligence Unit – India (FIU-IND). Below is a structured overview of the core requirements under PMLA.…
The Prevention of Money Laundering Act (PMLA), 2002 places strict obligations on banks, financial institutions, and other reporting entities to maintain transaction records and client information. These requirements are critical for ensuring transparency, detecting suspicious activities, and enabling investigators to trace the origins of funds when necessary. Under PMLA, records must be kept in such…
The Prevention of Money Laundering Act (PMLA), 2002 is India’s primary legislation to combat money laundering and safeguard the integrity of the financial system. To operationalize its provisions, several rules have been framed—most notably the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, which place specific obligations on banks, financial institutions, and other reporting entities.…
Enhanced Due Diligence (EDD) is a critical compliance requirement under the Prevention of Money Laundering Act (PMLA), 2002, designed to safeguard the financial system against money laundering and terrorism financing. It applies when customers, transactions, or jurisdictions pose higher risks, demanding stricter scrutiny beyond routine checks. What Is Enhanced Due Diligence? While Customer Due Diligence…
Money laundering is among the gravest financial crimes worldwide, carrying strict penalties that extend beyond imprisonment to fines, asset confiscation, and even political disqualification. In India, the Prevention of Money Laundering Act (PMLA), 2002, forms the cornerstone of anti-money laundering enforcement, while globally, regulators impose equally stringent measures to deter such crimes. Legal Penalties in…
Money laundering is one of the most serious financial crimes, threatening the integrity of financial systems worldwide. In India, the Prevention of Money Laundering Act (PMLA), 2002 defines and criminalizes this offence under **Section 3**, prescribing strict punishments, including imprisonment and fines. What is Money Laundering? At its core, money laundering is the process of…