Enhanced Due Diligence (EDD) under PMLA: Strengthening AML Safeguards
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…
Read article Punishment for Money Laundering: Legal, Financial, and Banking Implications
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…
Read article Offence of Money Laundering under PMLA, 2002
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…
Read article Prevention of Money Laundering Act (PMLA), 2002 – Key Provisions Explained
The Prevention of Money Laundering Act (PMLA), 2002 is a cornerstone of India’s legal framework to fight financial crimes. It aims to **curb money laundering, tackle black money, and strengthen financial transparency**. By making money laundering a criminal offense, the Act provides for confiscation of illegally acquired assets (proceeds of crime) and imposes stringent punishments,…
Read article
Co-Lending by Banks and NBFCs: A Win-Win for Priority Sector Lending
Co-lending between banks and Non-Banking Financial Companies (NBFCs) is a strategic partnership model designed to expand credit access in underserved segments while ensuring efficient risk-sharing. Under this framework, both banks and NBFCs jointly finance loans to Priority Sector Assets (PSAs), with each contributing a pre-agreed share and managing the process collaboratively. For banks, this model…
Obligations of Banks and Financial Institutions in Combating Money Laundering
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…
Read article