Financial Crime World

India Cracks Down on Money Laundering with Strengthened AML Policies

Overview of the Latest Regulations and Enforcement Measures

India, the world’s sixth- largest economy, is taking a stand against money laundering through the enforcement of stringent Anti-Money Laundering (AML) policies. This article provides a comprehensive review of India’s latest regulatory framework, AML amendments, the roles of SEBI, RBI, and FIU-IND, and the enforcement and penalties related to India’s AML policies.

Regulatory Framework

There are various laws and regulators that comprise India’s regulatory framework against money laundering:

  • Prevention of Money Laundering Act 1998 (PMLA)
  • Securities and Exchange Board of India (SEBI)
  • Reserve Bank of India (RBI)
  • Financial Intelligence Unit-India (FIU-IND)

PMLA Amendments

  • Broaden the scope of crimes that can give rise to money laundering
  • Harsh penalties
  • Increased powers for law enforcement agencies

SEBI’s Role

  • Maintains the integrity of India’s financial markets
  • Enforces AML regulations in the securities market
  • Introduced the Securities and Exchange Board of India (SEBI) (Procedure for Investigation and Imposition of Penalty) Regulations, 2014

Implementation of FATF Recommendations

  • Strengthening the identity verification process for customers
  • Increasing reporting requirements
  • Improving communication and coordination between various agencies

RBI’s AML Guidelines

  • Guidelines for financial institutions and intermediaries to comply with AML norms
  • Circulars on Know-Your-Customer (KYC) and Customer Due Diligence (CDD) requirements

FIU-IND’s Role

  • Receives, analyzes, and disseminates financial intelligence
  • Works closely with domestic and international law enforcement agencies

Enforcement and Penalties

  • Strong commitment to holding perpetrators accountable
  • Penalties for non-compliance include fines, imprisonment, and suspension or cancellation of licenses for financial institutions

Challenges Remain

  • Collaboration between regulatory agencies, law enforcement, and the financial sector needed

Conclusion

India’s AML policies have become more stringent in recent years, with the regulatory framework, enforcement measures, and cooperation with international bodies aiming to combat money laundering and strengthen India’s financial integrity.