Additionally, Chapter IX of the PMLA aids the extraterritorial implementation of the PMLA by enabling reciprocal arrangements with foreign countries to enforce the provisions of PMLA.

Is there corporate criminal liability for money laundering offences, or is liability limited to individuals?

Under the PMLA, both individuals and legal persons or entities^[9] can be prosecuted for money laundering. In terms of section 70 of the PMLA, if a company violates the provisions of the PMLA or its rules, both the company and any person responsible for its operations or actions at the time of the violation may be deemed guilty and will be subject to legal action under the PMLA. As such, while natural persons face liability for contraventions, legal entities can also be held accountable and fined.

Which government authorities are responsible for investigating violations of the money laundering laws?

By way of the enactment of the PMLA in 2002,^[10] the central government was empowered to appoint persons it deems fit to be authorised for the purposes of the PMLA. On 1 July 2005, the Directorate of Enforcement (ED) was appointed to exercise the exclusive powers conferred under the PMLA.

The ED is responsible for enforcing the provisions of the PMLA by, among other things:

• conducting investigations into money laundering offences;
• tracing the property derived from proceeds of crime;
• provisionally attaching tainted property;
• ensuring prosecution of the offenders; and
• confiscating property confirmed as proceeds of crime by the special courts established under the PMLA.

State police officers, officers working with various government departments and agencies or body corporates established under central or state statutes are empowered and required to assist the ED in enforcing the PMLA.^[11]

Separately, the Financial Intelligence Unit-India (FIU-IND) collects, analyses and disseminates information relating to suspicious financial transactions to law enforcement agencies and foreign financial intelligence units (FIUs). It is also empowered to compel entities designated as reporting entities^[12] under the PMLA to comply with PMLA regulations and to adjudicate and impose monetary penalties for non-compliance with PMLA regulations.

Additionally, there are sectoral regulators, such as the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority of India (IRDAI), that are empowered to lay down guidelines on anti-money laundering (AML) measures for the relevant sectors in relation to entities regulated by them.^[13]

Which government agencies are responsible for the prosecution of money laundering offences?

The ED is the authority responsible for prosecution of money laundering offences. Offences under the PMLA are prosecuted before a special court^[14] established under the PMLA, upon a prosecution complaint being filed by the ED.^[15] If, after an investigation, the ED concludes that there is no offence of money laundering, it will submit a closure report before the relevant special court.^[16]

What is the statute of limitations for money laundering offences?

The PMLA is a special statute governing the offence of money laundering, and it does not prescribe any limitation period for initiating an investigation into or a prosecution against money laundering.

Under general criminal laws, which may apply where the special statute does not prescribe any limitation, there is no prescribed limitation period for offences punishable with imprisonment for three years or more,^[17] although section 4 of the PMLA provides a minimum term of three years’ imprisonment. As such, there is arguably no specific limitation period for investigating and prosecuting offences related to money laundering In any event, money laundering is a continuing offence that persists until the enjoyment of the proceeds of crime, whether direct or indirect, ceases.^[18]

What are the penalties for a criminal violation of the money laundering laws?

The penalty for commission of an offence of money laundering is “rigorous imprisonment”^[19] for a minimum period of three years, which may be extended to up to seven years, and the perpetrator is also liable to receive a fine.^[20] Further, if the proceeds of crime relate to any of the offences under the NDPS Act, the penalty is rigorous imprisonment for a minimum period of three years, which may be extended to up to 10 years with a fine.^[21]

The PMLA does not prescribe any minimum or maximum quantum of fine that can be imposed; the quantum is left to the discretion of the special courts.

Fines may be imposed on both legal persons and entities (eg, companies) that are found guilty of money laundering.

Are there civil penalties for violations of the money laundering laws? What are they?

Yes, there are civil penalties for violations of money laundering laws in India.

The ED is empowered to provisionally attach properties (after passing an order) if it has reason to believe that a person is in possession of proceeds of crime, or proceeds of crime are likely to be concealed, transferred or dealt with in any manner that may frustrate proceedings relating to confiscation of the proceeds.^[22]

Upon provisional attachment of a property, the ED must immediately forward the order of attachment to the adjudicating authority constituted under the PMLA and file a complaint with the adjudicating authority within 30 days of the date of order of attachment setting out the facts relating to the attachment.^[23] The adjudicating authority must either confirm or set aside the order^[24] after providing the person concerned with an opportunity to be heard.^[25]

If the order is confirmed, the attachment may continue during the investigation or until proceedings under the PMLA (before the special court) are pending.^[26] Upon conclusion of a trial in which the jurisdictional court renders a finding that a money laundering offence has been committed, an order to confiscate the attached property may be made.^[27] Once confiscated, the property vests with the government.

Fines and monetary penalties may also be imposed on regulated entities for non-compliance with PMLA regulations and AML guidelines issued by relevant sectoral regulators. In addition to monetary penalties, the regulators are also empowered to impose sanctions such as suspension or cancellation of licences or registrations obtained by the regulated entities.

Is asset forfeiture possible under the money laundering laws? Is it part of the criminal prosecution? What property is subject to forfeiture?

The PMLA permits pretrial attachment of property; however, it does not permit confiscation or forfeiture without conviction.^[28] If the jurisdictional special court acquits a person for the offence of money laundering, that person’s property that may have been attached must be restored to the person.^[29]

The PMLA also permits forfeiture proceedings to be maintained against a person who assisted or engaged in the money laundering independently, even if they did not participate in the underlying scheduled offence. While pretrial attachment proceedings are treated as civil proceedings, confiscation of property can only be done upon conviction for commission of the offence of money laundering, which is a result of a criminal trial.

The properties or assets subject to forfeiture under the PMLA include those derived or obtained, directly or indirectly, by any person as a result of criminal activities relating to a scheduled offence. “Property” under the PMLA encompasses assets of every description (ie, corporeal or incorporeal, movable or immovable, and tangible or intangible) and includes deeds and instruments evidencing title to or interest in such property or assets, regardless of the location.^[30] Only properties that appear to be proceeds of crime, based on evidence available to the authorised officer, can be subject to attachment or confiscation.

Certain properties that may have been obtained and acquired without any connection to criminal activity may also be liable to be attached based on the principle of “value equivalent”, if the original “tainted properties” are not traceable or available for attachment to the extent of the value of the tainted property.

The Supreme Court has clarified that the term “proceeds of crime” is wide enough to refer not only to property derived or obtained as a result of criminal activity relating to a scheduled offence, but also to the value of that property;^[31] therefore, in a situation where “tainted property” is taken out of the country, value of property equivalent to that property held within the country or abroad can be attached. Even property that is derived or obtained out of the crime and is “parked with” another person can be attached or seized even if the third person is not accused of committing any offence.^[32]

Anti-money laundering

Which laws or regulations in your jurisdiction impose AML compliance requirements on financial institutions and other businesses?

In India, the PMLA is the primary legislation imposing AML compliance requirements on reporting entities. Reporting entities under the PMLA have been defined to include banking companies, financial institutions and intermediaries.^[33]

Sections 11A to 15 of the PMLA impose various obligations on reporting entities, such as verification of identities of clients and beneficial owners, maintenance of records and enhanced due diligence. The primary rules applicable to reporting entities are the Prevention of Money Laundering (Maintenance of Record) Rules 2005 (the PML Rules).

Further, AML guidelines are issued by sectoral regulators (collectively referred to as “AML rules and guidelines”), which include guidelines in relation to “know your customer” (KYC) and client due diligence (CDD), reporting of suspicious transactions. AML compliance is an obligation of all reporting entities^[34] in relation to their clients.^[35]

In August 2025, the RBI issued consolidated KYC norms, which replaced various past circulars on the issue and streamlines the processes to be followed by regulated entities.^[36]

What types of institutions are subject to the AML rules?

The PMLA applies to “persons”, which includes individuals, companies, firms, associations of persons or bodies of individuals, artificial juridical persons, Hindu undivided families, and any agency, branch or office controlled by any of those persons.^[37]

Under the PMLA, reporting entities include banking companies, financial institutions and intermediaries. The government also periodically notifies entities and persons who may be designated as reporting entities. These presently include:

• intermediaries;^[38]
• insurance brokers;^[39]
• registrars and sub-registrars appointed for the purposes of registration of documents pertaining to immovable property, wills and other documents under the provisions of the Registration Act 1908;^[40]
• multi-state cooperative societies;^[41]
• real estate agents that have an annual turnover of over 2 million rupees;
• persons dealing with precious stones and metals where individual or linked transactions amount to over 1 million rupees;^[42]
• non-profit organisations;^[43]
• chartered accountants and company secretaries;^[44] and
• persons involved in company formation, the running of the company and trusts, among other things.^[45]

Must payment services and money transmitters be licensed in your jurisdiction? Are payment services and money transmitters subject to the AML rules and compliance requirements?

Yes. In India, under the Payment and Settlement Systems Act 2007 (PSSA), no person other than India’s central bank (the RBI) may operate or commence a payment system without authorisation from the RBI. Any individual or entity intending to operate a payment system must apply for authorisation to the RBI.^[46] There is no bar on foreign entities operating payment systems, and the PSSA makes no distinction between foreign and domestic entities.^[47]

In addition to the licensing requirements under the PSSA, payment services and money transmitters are subject to and must comply with AML rules and guidelines and compliance obligations under the PMLA. The PMLA explicitly includes “payment system operators within its purview, defining them as persons who operate systems facilitating payments between a payer and a beneficiary.^[48]

Are digital assets subject to the AML rules and compliance requirements?

Yes, digital assets are subject to AML rules and compliance requirements in India.^[49] Intermediaries dealing with virtual digital assets (VDAs) have been categorised as reporting entities, and the following activities and transactions concerning VDAs are subject to AML rules and compliance requirements:

• exchanges between VDAs and fiat currencies;
• exchanges between one or more forms of VDA;
• transfers of VDAs;
• safekeeping or administration of VDAs or instruments enabling control over VDAs; and
• participation in and provision of financial services relating to an issuer’s offer and sale of a VDA.^[50]

The FIU-IND has issued guidelines relating to KYC norms, CDD, enhanced due diligence, record-keeping and reporting of suspicious transactions, among other things.^[51] On 8 January 2026, it issued updated AML and combating the financing of terrorism (CFT) guidelines, requiring strict, technology-driven compliance for virtual digital asset service providers (VDASPs). These rules mandate rigorous registration, live system audits, enhanced customer due diligence and advanced monitoring of high-risk transactions.^[52]

What are the specific AML compliance requirements for covered institutions?

The PMLA and the PML Rules primarily provide for common compliance requirements for all reporting entities, which include the following:

• CDD: reporting entities must establish and implement thorough CDD procedures to verify the identity of their clients, obtain information on the purpose and intended nature of the business relationship, determine the beneficial owner of the client and verify the identity of the beneficial owner.^[53]
• Enhanced due diligence: enhanced due diligence is mandated for specified transactions, which refer to transactions where withdrawals or deposits in cash exceeding a value as may be prescribed by the government, transactions in foreign exchange exceeding a value as may be prescribed by the government, transactions in any high-value imports or remittances and other transactions or classes of transactions that may be prescribed by the government as having a high risk of involvement in money laundering or terrorist financing.^[54]
• Maintenance of records and reporting of suspicious transactions: reporting entities are required to maintain records of all transactions, including the nature, amount, date and parties involved, and furnishing relevant information to the Director of ED or the FIU-IND, including in respect of suspicious transactions.^[55]
• Appointment of principal officer and designated director: the PML Rules require every reporting entity to designate a principal officer, who is mandated to furnish information to the FIU-IND, and a designated director to ensure overall compliance with AML obligations.^[56]
• Internal policies and procedures: reporting entities must establish and implement internal policies, procedures and controls to comply with the AML rules and guidelines.^[57]
• Ongoing monitoring: reporting entities have an obligation to exercise ongoing due diligence with respect to business relationships with every client to ensure that transactions are consistent with client risk and business profile.^[58]
• Risk assessment: reporting entities must conduct risk assessments to identify, assess and take effective measures to mitigate the risks of money laundering and terrorist financing. The risk assessment must be documented, consider all risk factors and determine an overall level of risk and the appropriate level of mitigation to be applied, update the risk assessment routinely and make the risk assessment available to competent authorities and regulators.^[59]

Are there different AML compliance requirements for different types of institutions?

The PMLA and the PML Rules provide for common compliance requirements for all reporting entities. In addition to the PMLA and related rules, AML compliance requirements are supplemented by various rules and guidelines by sectoral regulators, such as the RBI, SEBI and the IRDAI, which have detailed frameworks regulating persons and reporting entities.

The RBI has issued a master direction applicable to RBI-regulated financial institutions relating to AML standards and CFT (the RBI Master Direction).^[60] These master directions contain guidelines on CDD, KYC norms, reporting requirements to the FIU-IND, and requirements and obligations under international agreements, among other things. Similarly, SEBI has issued guidelines AML, CFT and obligations of intermediaries (the SEBI AML Guidelines),^[61] which apply to stock exchanges and intermediaries registered with it, and the IRDAI has issued AML/CFT guidelines for all insurers.^[62]

Which government authorities are responsible for the examination and enforcement of compliance with the AML rules?

The ED and the FIU-IND are the primary agencies responsible for examination and enforcement of AML rules. The ED is allowed to share information about economic offenders with 25 government agencies, including other law enforcement agencies and regulators.^[63] While the ED primarily investigates and prosecutes money laundering offences, the FIU-IND is tasked with receiving, processing, analysing and disseminating information relating to suspicious financial transactions. It also coordinates the efforts of both national and international intelligence, investigative and enforcement agencies in combating money laundering and related financial crimes.

Sector regulators are also empowered to impose monetary fines and penalties, and sanctions on their regulated entities for violation of AML rules.

Are there requirements to monitor and report suspicious activity? What are the factors that trigger the requirement to report suspicious activity? What is the process for reporting suspicious activity?

Yes, reporting entities must monitor and report suspicious transactions. The PML Rules impose an obligation on reporting entities to report any transaction that falls withing the meaning of “suspicious transaction”.

Suspicious transactions refer to transactions, including attempted transactions, that, to a person acting in good faith:

• gives rise to a reasonable ground of suspicion that it may involve proceeds of crime, regardless of the value involved;
• appears to be transacted in unusual circumstances or with unjustified complexity, or appears to be without economic rationale or a bona fide purpose; or
• gives rise to reasonable grounds of suspicion that it may involve terrorist financing.^[64]

Reporting entities must maintain records of all suspicious transactions made in cash and through cheques, deposits and credits, withdrawals into or from any accounts, traveller’s cheques, bank transfers, credits and debits from non-money accounts, money transfers and remittances, among other methods.^[65]

The PML Rules mandate that every reporting entity maintain information in the manner specified by its regulator and evolve internal mechanisms to maintain that information in accordance with the guidelines of the relevant regulator.^[66]

In terms of the process for reporting suspicious activity, all reporting obligations under the PMLA and the PML Rules are routed through the principal officer of the reporting entity.^[67] Significantly, the PML Rules only define a principal officer as an officer designated by the reporting entity; however, the RBI Master Direction and the SEBI AML Guidelines, which apply to stock exchanges and intermediaries registered with SEBI, provide further guidance on the issue. The RBI Master Direction requires that the principal officer be an employee or officer at the management level,^[68] while the SEBI AML Guidelines require that a principal officer be an officer who has access to and can report to senior management at the next reporting level or the board of directors.^[69]

A duty is placed on all reporting entities, its designated director, officers and employees to observe the procedure and manner in which information is to be provided.^[70] Information relating to suspicious transactions must be reported by the principal officer to the FIU-IND director within seven working days.^[71] Delay in reporting constitutes a violation of the rules.^[72]

Are there confidentiality requirements associated with the reporting of suspicious activity? What are the requirements? Who do the confidentiality requirements apply to? Are there penalties for violations of the confidentiality requirements?

Yes, there are confidentiality requirements under the provisions of the PMLA and its related rules. Section 12(2) of the PMLA mandates that reporting entities maintain confidentiality regarding every piece of information maintained, furnished or verified under the provisions of the PMLA and PML rules. These confidentiality requirements extend to all reporting entities and the information maintained and provided by the reporting entities, including suspicious transactions.

All reporting entities, including those operating as part of a group, must implement group-wide programmes against money laundering and terrorist financing, which must incorporate policies for sharing information necessary for CDD, money laundering risk management and terrorist financing risk management. These programmes must have adequate safeguards in place to ensure the confidentiality and appropriate use of shared information, including measures to prevent tipping off. Such confidentiality requirements are also incorporated into sectoral guidelines of SEBI and RBI.

While there are no specific penalties relating to violations of confidentiality requirements, section 13(2) of the PMLA generally provides for fines and penalties that can be imposed on reporting entities for any violation of the obligations placed on reporting entities under the PMLA and its related rules.

Are there requirements for reporting large currency transactions? Who must file the reports, and what is the threshold?

Under Rule 3 of the PML Rules, reporting entities must maintain records relating to various transactions, including:

• cash transactions of more than 1 million rupees or the equivalent value in foreign currency;
• all transactions that may be integrally connected to each other though individually coming below reporting thresholds but that cumulatively are more than 1 million rupees;
• transactions involving receipts by non-profit organisations of an amount of more than 1 million rupees or the equivalent in foreign currency;
• all cash transactions involving forged or counterfeit currency notes or bank notes being used as genuine;
• all cross-border wire transfers of a value of more than 500,000 rupees;
• all purchases and sales of immovable property by any person valued at 5 million rupees or more; and
• suspicious transactions, regardless of whether the transactions are effected in cash.

The principal officer of a reporting entity is required to, among other things, furnish the information in respect of transactions set out above to the ED at specified intervals.^[73] The thresholds provided in Rule 3 of the PML Rules are specific to the nature of the transaction.

Are there reporting requirements for cross-border transactions? Who is subject to the requirements and what must be reported?

Yes. Reporting entities must maintain records pertaining to “all cross border wire transfers of the value of more than five lakh rupees [500,000 rupees] or its equivalent in foreign currency where either the origin or destination of fund is in India”.^[74] The principal officer of the reporting entity must submit this information to the FIU-IND by the 15th day of the succeeding month.

Reporting entities are also required to maintain information on all cross-border transactions that are deemed suspicious. The principal officer must promptly submit this information – either in writing or through fax or email – to the director of the ED within seven working days once they determine that a cross-border transaction is suspicious.

Is there an FIU or other government agency responsible for analysing the information reported under the AML rules?

Yes. The FIU-IND was set up by the government on 18 November 2004 to serve as the central national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions. It also plays a critical role in coordinating and strengthening the efforts of both national and international intelligence, investigative and enforcement agencies and in combating money laundering and related financial crimes.

What are the penalties for failing to comply with your jurisdiction’s AML rules, and are they civil or criminal?

The penalties for failing to comply with AML rules are monetary penalties and directions to ensure compliance. These are civil in nature.

The FIU-IND is empowered to conduct an inquiry with regard to obligations of reporting entities under the PMLA and penalise violations by reporting entities. As part of its inquiry, the FIU-IND can pass various directions,^[75] including:

• issue a written warning;
• direct the reporting entity or its designated director or any employee to comply with specific instructions;
• direct the reporting entity or its designated director or any employee to send the FIU-IND reports at specified intervals on the measures taken by it; or
• impose a monetary penalty on the reporting entity or its designated director or any employee.

The FIU-IND also provides summaries of compliance orders issued by it on its website. The compliance orders issued indicate that significant monetary penalties have been imposed by the FIU-IND on reporting entities in certain cases for failure to report suspicious transactions, failure to undertake ongoing CDD and failure to put in place internal mechanisms as mandated in the PML Rules, among other things.

Where a company has committed a contravention of, among other things, the AML rules, every person who, at the time the violation, took place, was in charge of or was responsible for the conduct of the company is deemed guilty of the violation, provided it can be shown that it was committed with the consent or connivance of any director, manager, secretary or officer of the company or is attributable to neglect on the part of those persons.

Are compliance personnel subject to the AML rules? Can an enforcement action be brought against an individual for violations?

Yes, compliance personnel are subject to AML rules. All reporting entities and their designated director, officers and employees are responsible for compliance with AML rules. The FIU-IND may initiate an inquiry against a reporting entity, its designated director or any employees for failure to comply with the obligations under the PMLA and its related rules. A monetary penalty can be imposed on the reporting entity, its designated director or any of its employees, which shall not be less than 10,000 rupees and may extend to 100,000 rupees for each failure.^[76]

What is the statute of limitations for violations of the AML rules?

The PMLA does not specifically prescribe a limitation period for the offence of money laundering or any violations of rules framed thereunder.

Does your jurisdiction have a beneficial ownership registry or an entity or office that collects information on the beneficial ownership of legal entities?

The PMLA requires reporting entities to maintain information relating to the ultimate beneficial owners of its clients.^[77] Depending on the nature of the client, the reporting entity must determine the nature of the beneficial owner as provided for in Rule 9(3) of the PML Rules.

Further, every company incorporated in India must file a return containing the details of its significant beneficial owners with the Registrar of Companies.^[78] A register of significant beneficial owners is maintained under the requirements of the Significant Beneficial Ownership Rules 2018.

Footnote

[1] Prevention of Money Laundering Act 2002 (PMLA), section 3.

[2] A scheduled offence is defined in section 2(y) of the PMLA and refers to the predicate offences incorporated in the Schedule to the PMLA.

[3] Vijay Madanlal Choudhary v Union of India [2023] 12 SCC 1, paragraphs 134, 150 and 382.8.

[4] PMLA, section 4.

[5] Act to Consolidate and Amend the Provisions Relating to Offences and for Matters connected Therewith or Incidental Thereto 2023 (Bharatiya Nyaya Sanhita (BNS)).

[6] PMLA, section 2(1)(ra).

[7] Adnan Nisar v Directorate of Enforcement, 2024 SCC OnLine Del 6498, paragraphs 51 to 58.

[8] PMLA, section 2 (1)(ra).

[9] id, section 2(s).

[10] id, section 49.

[11] id, section 54.

[12] Under section 2(1)(wa) of the PMLA, “reporting entities” refers to a banking company, financial institution, intermediary or a person carrying on a designated business or profession. The government also periodically issues notifications bringing in persons and entities that would fall within the definition of reporting entities.

[13] Such sector specific guidelines include the “Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) / Obligations of Securities Market Intermediaries” dated 6 June 2024, and the “Master Guidelines on Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT), 2022” dated 1 August 2022. Various circulars and master directions by the Reserve Bank of India require banks and financial institutions to implement robust customer due diligence, risk-based categorisation and transaction monitoring under the PMLA.

[14] Under sections 2(1)(z) and 43 of the PMLA, the government designates courts as special courts to try the offence of money laundering.

[15] PMLA, section 44(1)(b).

[16] id, proviso to section 44(1)(b).

[17] Act to Consolidate and Amend the Law Relating to Criminal Procedure 2023, Section 514.

[18] id, section 3.

[19] Under section 4 of the BNS, rigorous imprisonment refers to hard labour.

[20] PMLA, section 4.

[21] id, proviso to section 4 read with paragraph 2 of Part A to the Schedule.

[22] id, section 5(1).

[23] id, section 5, paragraphs 2 and 5.

[24] id, section 8(3).

[25] id, section 8(1).

[26] id, section 8(3).

[27] id, section 8(5).

[28] ibid.

[29] id, section 8(6).

[30] id, section 2(1)(v).

[31] Vijay Madanlal Choudhary v Union of India [2023] 12 SCC 1, paragraph 172.

[32] Ayush Kejriwal v Deputy Director, Directorate of Enforcement, Appeal No. FPA-PMLA-4358/KOL/2021, PMLA Appellate Tribunal (1 May 2024).

[33] id, section 2(1)(wa).

[34] Section 11A of the PMLA requires reporting entities to verify the identities of its clients and beneficial owners while section 12 requires that reporting entities maintain records of all transactions, documents evidencing the identity of its clients and beneficial owners, and account files and business correspondence relating to its clients. These documents and records must be made available to the director of the Financial Intelligence Unit-India. Further, section 12AA of the PMLA lays down enhanced due diligence requirements to be complied with by reporting entities.

[35] Section 2(1)( ha) of the PMLA defines a “client” to mean a person who is engaged in a financial transaction or activity with a reporting entity and includes a person on whose behalf the person who engaged in the transaction or activity is acting.

[36] Reserve Bank of India, Master Direction – Know Your Customer (KYC) Direction, 2016 (updated on 14 August 2025) (RBI Master Direction).

[37] PMLA, section 2(1)(s).

[38] Notification of 24 September 2014.

[39] Notification of 15 April 2015.

[40] Notification of 17 April 2015.

[41] Notification of 4 May 2018.

[42] Notification of 28 December 2020.

[43] Prevention of Money-laundering (Maintenance of Records) Amendment Rules 2023.

[44] Notification of 3 May 2023.

[45] Notification of 9 May 2023.

[46] Payment and Settlement Systems Act 2007, sections 4 and 5.

[47] id, sections 4 and 18.

[48] PMLA, section 2(1), paragraphs rb and rc.

[49] In March 2023, the Ministry of Finance issued Notification No. SO 1072(E) of 7 March 2023, categorising intermediaries trading in virtual digital assets as reporting entities.

[50] ibid.

[51] AML & CFT Guidelines For Reporting Entities Providing Services Related To Virtual Digital Assets. These rules came into effect on 10 March 2023.

[52] AML & CFT Guidelines for Reporting Entities Providing Services Related to Virtual Digital Assets (updated 8 January 2026).

[53] Prevention of Money Laundering (Maintenance of Record) Rules 2005 (the PML Rules), Rule 9.

[54] Section 12AA of the PMLA lays down the requirements and circumstances in which enhanced due diligence is required.

[55] PMLA, section 12, read with Rules 3 to 5.

[56] PML Rules, Rule 2(1), paragraphs ba and f, read with Rule 7 and 8.

[57] id, Rule 5.

[58] id, Rule 9(12).

[59] id, Rule 9(13).

[60] See, eg, RBI Master Directions (see footnote 36).

[61] Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money Laundering Act 2002 and Rules framed there under, Securities and Exchange Board of India (SEBI AML Guidelines).

[62] Master Guidelines on Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT) 2022, Insurance Regulatory and Development Authority of India.

[63] Notification of 27 June 2006; and Notification of 22 November 2022.

[64] PML Rules, Rule 2(1)(g).

[65] Id., Rule 3(D).

[66] Id., Rule 5.

[67] Every reporting entity must designate a principal officer (PML Rules, Rule 2(1)(f)) and a designated director (PML Rules, Rule 2(1)(ba)) and inform the director of the Financial Intelligence Unit-India of the same (PML Rules, Rule 7).

[68] RBI Master Direction (see footnote 36), Clause 3(xviii).

[69] SEBI AML Guidelines, Clause 76.

[70] PML Rules, Rule7(4).

[71] Id., Rule 8(2).

[72] Id., Rule 8(4).

[73] The procedure, manner and time frame for reporting transactions is provided in Rules 7 and 8 of the PML Rules.

[74] PML Rules, Rule 3(1)(E).

[75] PMLA, section 13.

[76] id, section 13(2)(d).

[77] PML Rules, Rule 9(1)(a).

[78] Companies Act 2013, section 90(2).

This article was originally published in Global Investigations Review on 30 June 2026 Co-written by: Pallavi Shroff, Managing Partner; Nishant Joshi, Partner; Aditya Malhotra, Partner; Aditya Mukherjee, Partner. Click here for original article

Read Less-