Legal Tips on Notification on Money Laundering Amendment

In February 2010, the Government of India amended the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005.

Here are some legal tips on the salient features of this amendment and what it requires banks and financial institutions to follow:

• Maintain records of all transactions including the records of transactions detailed in rule 3 sub-rule (1).
• Ensure that the records referred to in rule 3 should contain all necessary information specified by the Regulator to permit reconstruction of individual transactions including the information detailed in rule 4.
• urban cooperative banks are advised to strictly follow the amended provisions of PMLA Rules and ensure meticulous compliance to these Rules.

Further,  in rule 9 in sub-rule (1A), an explanation of ‘beneficial owner’ has been inserted in terms of which “ ’beneficial owner’ shall mean the natural person who ultimately owns or controls a client and or the person on whose behalf a transaction is being conducted, and includes a person who exercise ultimate effective control over a juridical person.”

[The information in this post has been compiled and shared with us, courtesy S DHANAPAL & ASSOCIATES, Chennai.]