FATF status
FATF Member (since 2010)
Supervisors and authorities
Key legislation
  • Prevention of Money Laundering Act 2002 (PMLA)
  • PMLA Rules 2005 (as amended)
  • Unlawful Activities (Prevention) Act 1967 (UAPA)
  • Foreign Exchange Management Act 1999 (FEMA)

Overview of Indian AML regulations

India's AML framework centres on the Prevention of Money Laundering Act 2002 (PMLA), enforced by the Enforcement Directorate (ED). The Financial Intelligence Unit - India (FIU-IND) receives and analyses suspicious transaction reports. India became a FATF member in 2010.

Key legislation

India's regime is anchored in a single statute, supported by rules and sector-specific directions.

PMLA 2002

The PMLA defines money laundering offences and establishes the framework for investigation, prosecution, and confiscation of proceeds of crime. The PMLA Rules 2005 (as amended) prescribe CDD and record-keeping requirements for reporting entities.

RBI KYC directions

The Reserve Bank of India issues Master Direction on KYC requirements for regulated entities, prescribing customer identification, verification, and ongoing monitoring procedures.

Enforcement Directorate

The ED investigates money laundering offences under PMLA. The ED has significantly increased enforcement activity, with provisional attachments and prosecutions rising substantially in recent years.

Implications for international businesses

Businesses dealing with Indian counterparties should ensure screening covers Indian sanctions and PEP databases. India's growing economy and increasing integration into global financial markets mean that risk assessments should account for India-specific factors.