Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2023

Recently, the Ministry of Finance, India, issued a notification amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.

The Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2023 amends the definition of “Non-Profit Organization” and inserts the definition for the phrase “Politically Exposed Person”. Moreover, the amendment notification makes a critical change around identification of the Ultimate Beneficial Owner (UBO). Earlier, the threshold prescribed for UBO was 25%, which has now been reduced to 10%, mandating the regulated entities to identify more controlling parties going down till 10% of the ownership interest.

Further, the rules now require the entities to collect the information pertaining to directors and senior management as well as the registered/principal place of business in the case of legal person.

Additional obligation has been imposed vide this amendment on the banks, financial institutions, and intermediaries, requiring these entities to report the details of all their Non-Profit Organizations (NPO) clients and customers, on the DARPAN Portal of NITI Aayog.