Introduction to the Prevention of Money Laundering Act, 2002

The Prevention of Money Laundering Act, 2002 (PMLA) lays down the legal framework to combat money laundering cases in India. The act imposes obligation on banking companies, financial institutions and many other organisations to verify their clients’ identity, keep the records, and furnish information to the FIU-IND. Section 3 of the Act defines offence of money laundering as, “Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering.” 

There is no doubt that government is doing its best to combat money laundering; there is, however, a lot that needs to be done by various banking and financial institutions to prevent and detect any possible pattern of money laundering. Besides being aware of the rules and regulations prescribed under the Prevention of Money Laundering Act, 2002, the institutions should also make the most of technology; anti-money laundering systems are out there to help almost every business to shield itself from the potential threats of money laundering.

There is no dearth of anti-money laundering solutions in the market, which cater to different industries; your job is to adopt the technology, which fits the nature of your business in the best way possible. There are experienced players like Aithent, which have a range of products to offer to meet the varying needs of different business sectors. The technology will be of immense help in preventing and detecting fraudulent activities so adequate measures can be taken to reduce the impact to the least extent possible. The technology is especially useful for the banking and financial institutions.

Though there is no dearth of companies which make software for preventing and detecting money laundering patterns, a business should take utmost care while opting for one particular system. The technology should easily integrate into your systems so the business can function properly. Cost of installing software like case management software should also be kept in mind.

There is a lot that needs to be understood and done to put an end to the very practice of money laundering. It’s not just India, which is facing the regular threats of money launderers; in fact, money laundering is all pervasive.