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,…
A deposit generally refers to money held in a customer’s bank account. Banks offer different types of deposit accounts to their customers with diverse features. Let us understand the types of accounts available to Bank customers Savings account Savings Bank (SB) accounts are opened mainly for saving purposes. Customers cannot open an SB account for…
Indemnity is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims. There are generally two parties in indemnity contracts. Someone who promises to protect or compensate another person if he suffers any loss or damage is the indemnifier…
A lease is a contractual arrangement where one party, called the lessor, provides an asset for use by the other party, referred to as the lessee, based on the lease agreement. For example, when a customer hires a safe deposit locker from the bank, the relation between the bank and the customer is lessor and…
Section 182 of the Indian Contract Act, of 1872 defines the relationship between Agent and principal. According to the said section, an agent is a person employed to do any act for another or to represent another in dealings with third persons. The person acting on behalf of the other is called an agent, and…
Bailment and Pledge are two special contracts that are often confused. Every pledge is a bailment but every bailment is not a pledge. Bailment means the delivery of goods from one person to another for a special purpose. A Pledge means the delivery of goods as security for the payment of a debt or the…
A trustee is an entity that manages wealth, assets, or property on behalf of the owner of the estate. The owner also called the trustor, appoints a trustee to act in the trustor’s (original owner’s) best interests. Section 3 of the Indian Trust Act 1882 provides that “A Trust is an obligation annexed to the…