Money laundering is the process wherein the criminals attempt to conceal their booty and make an attempt to cover them as legitimate source of income. The bill on money laundering described it as an offence (i) when crime has been committed. (ii)There are proceeds or gains from the crime. (iii) There is a transaction in respect of the proceeds of the gains.
As for as, banking and financial transactions are concerned money laundering has three distinct stages.
Obligations of financial institutions under money laundering and prevention bill: for details read “What is prevention of money laundering
(i) The financial institutions and intermediaries are required to maintain records of all transactions-irrespective of whether it was a single transactions or series of integrally connection transactions connected to IT department.
(ii) All such records should be maintained for five years from the date of transactions (Closing of account). This is a legal obligation, failure to adhere to the above stipulations may attract penalty ranging from Rupees ten thousand to Rupees one lakh.
(iii) Financial institutions get immunity from civil proceedings under other laws for disclosure of transaction details.
For more details, read “What is prevention of money laundering?
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