Reporting Entities are required to carry out #AntiMoneyLaundering measures under #PMLA.
As Per Section 2 (wa) of the #PMLAact, "reporting entity" means a banking company, #financialinstitution, intermediary or a person carrying on a designated business or profession.
• Banking company: Banking company under PMLA means a banking company or a co-operative bank to which the #BankingRegulationAct, 1949 applies and includes any bank or banking institution referred to in section 51 of the Act.
• Banking company includes all nationalized banks, private Indian Banks and private foreign banks, all co-operative banks, State Bank of India and its associates and subsidiaries and Regional Rural Banks.
• Financial Institution: Financial Institution under PMLA means a financial institution as defined in section 45-I(C ) of the Reserve Bank of India Act, 1934 and includes a chit fund company, a co-operative bank, a housing finance institution, insurance companies, hire purchase companies, Non-Banking Financial Companies (NBFCs as defined in section 45-I of the #RBI Act) and the Department of Posts.
• Intermediary: Intermediary under PMLA includes the following persons registered under Section 12 of SEBI Act- Stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees to trust deed, registrars to issue, merchant bankers, underwriters, portfolio managers, investment advisers, depositories and depository participants, custodian of securities, foreign institutional investors, credit rating agencies, venture capital funds, collective investment schemes including mutual funds, an association recognised/ registered under the Forward Contracts (Regulation) Act, 1952 or any member of such association, an intermediary registered by the #PensionFundRegulatoryDevelopmentAuthority, and a recognized stock exchange.
“(i) a person carrying on activities for playing games of chance for cash or kind, and includes such activities associated with casino;
(ii) a Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908(16 of 1908), as may be notified by the Central Government;
(iii) real estate agent, as may be notified by the Central Government;
(iv) dealer in precious metals, precious stones and other high value goods, as may be notified by the Central Government;
(v) person engaged in safekeeping and administration of cash and liquid securities on behalf of other persons, as may be notified by the Central Government; or
(vi) person carrying on such other activities as the Central Government may, by notification, so designate, from time to time.”
That under the Section 12 of the PMLA Act, it is obligatory on the reporting entity to maintain the records of the business as per the provisions of the PMLA Act and #PMLARules, 2005.
The PMLA and the Rules there under require every reporting entity to furnish FIU-IND (Financial Intelligence Unit-India) information relating to-
i. All cash transactions of the value of more than rupees ten lakhs or its equivalent in #foreignCurrency;
ii. All series of cash transactions integrally connected to each other which have been valued below rupees ten lakhs (Rs. 10,00,000) or its equivalent in foreign currency where such series of transactions have taken place within a month;
iii. All transactions involving receipts by non-profit organizations of value more than rupees ten lakh (Rs. 10,00,000) or its equivalent in foreign currency.
iv. All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions.
v. All suspicious transactions whether or not made in cash.
vi. All cross-border wire transfers of the value of more than five lakh rupees (Rs. 5,00,000) or its equivalent in foreign currency where either the origin or destination of fund is in India.
vii. All purchase and sale by any person of immovable property valued at fifty lakh rupees or more that is registered by the reporting entity, as the case may be.
As per section 14 of the PMLA provides that Reporting Entities and their officers shall not be liable to any civil or criminal proceedings against them for furnishing information under clause (b) of sub-section (1) of section 12.
Section 13 of the PMLA empowers the Director, FIU-IND to impose a fine on Reporting Entities for failure to comply with the obligations of maintenance of records, furnishing information and verifying the identity of clients. The sanctions include both administrative action and monetary fine, which may vary between INR 10,000 and INR 1,00,000 for each failure.
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