|
Delhi - Anti-money laundering act kicks off |
|
|
|
Friday, 15 July 2005 |
|
Banks, financial institutions and intermediaries including stock market professionals such as brokers will be required to maintain records of all cash transactions, exceeding Rs 10 lakh from the 8th July 2005. This would be a necessity under the Prevention of Money Laundering Act, ‘02 (PMLA) which comes into force from this date. For more information on this Act,
The Act makes it clear that even if the value of individual cash transactions is less than Rs 10 lakh each, but are seemingly between related parties and takes place in a month, records would have to be maintained.
The information would have to be provided to Financial Intelligence Unit, India (FIU-IND), a multi-disciplinary unit created by the Government to establish links between suspicious or unusual financial transactions and underlying criminal activities.
This means banks and financial institutions including chit funds, co-operative banks, housing finance companies and non-banking financial entities would also be required to keep records of every transaction that appears to be suspicious, even if it was not a cash transaction.
The PMLA aims to combat the rising incidence of money laundering in India and allow confiscation and seizure of the property obtained from laundered money, and to deal with any other issue connected with money laundering in India.
The punishment for offences under the Act is rigorous imprisonment for 3-7 years and a fine which may extend to Rs 5 lakh. Where the money laundering offence relates to a drug offence under the Narcotic Drugs and Psychotropic Substances Act (NDPS Act), the penalty can extend to a maximum of 10 years.
Article courtesy of Indiatimes.com |
