In plain words: the PMLA is not only about criminals and the ED — it imposes anti-money-laundering (AML) duties on many ordinary businesses, and getting them wrong brings penalties.
Who has AML duties
The PMLA places obligations on 'reporting entities' — banks, financial institutions, and various intermediaries and designated businesses. If you fall in this net, compliance is not optional.
The core obligations
- Know Your Customer (KYC) — verify the identity of customers and beneficial owners before and during the relationship.
- Record-keeping — maintain records of transactions and identity for the prescribed period.
- Monitoring — watch for unusual or suspicious activity.
- Reporting — file prescribed reports with FIU-IND.
The reports you may need to file
- Suspicious Transaction Reports (STRs) — where a transaction raises a red flag.
- Cash Transaction Reports (CTRs) — for high-value cash dealings above the threshold.
- Other reports as prescribed for your sector.
What is FIU-IND
The Financial Intelligence Unit - India (FIU-IND) is the national agency that receives and analyses these reports and shares intelligence with enforcement agencies. Your reports go to it.
Why compliance matters
Failures — weak KYC, missed reports, poor records — can attract penalties on the reporting entity and its officers, and reputational damage. A sound AML programme is both a legal duty and a protection.
Building a basic AML programme
- A written AML policy and a designated principal officer.
- Robust KYC and beneficial-ownership checks.
- Monitoring and red-flag procedures.
- Training and periodic review.
Frequently asked questions
Does my business need AML compliance? It depends on whether you are a reporting entity — many financial and designated businesses are.
What is an STR? A report of a suspicious transaction, filed with FIU-IND.
What if we don't comply? Penalties can be imposed on the entity and responsible officers.
How Vakil Help Desk helps
Vakil Help Desk advises and defends clients at every stage of a PMLA matter — summons, attachment, arrest, bail and trial. If the ED has contacted you or you fear action, we can help you protect your position.
This article is for general legal awareness, not individual legal advice. PMLA proceedings move fast and the law is evolving through court rulings and notifications, so the right step depends on your facts and the current position. If you have received an ED notice or fear action, consult a lawyer immediately.