What records are to be maintained under PMLA, 2002

The Prevention of Money Laundering Act, 2002 mandates the reporting entity to maintain adequate records pertaining to AML that allow the entity and authorities to reconstruct the transaction (if required to substantiate the compliance or collect the evidence against the suspicious transaction).

The reporting entity must maintain complete details, capturing the nature of the transaction, the value and date of the transaction, and the parties involved. All this information must be retained in relation to the following transactions:

• Cash transactions exceeding INR 10 lakhs or its equivalent amount in foreign currency. This value threshold must be determined considering the connected transactions where the aggregate value exceeds INR 10 lakhs in a month.
• Transactions involving receipt of funds exceeding INR 10 lakhs or equivalent in foreign currency by a Non-Profit Organization.
• Transactions where counterfeit currency notes or bank notes have been used, including forged valuable security or similar valuable documents.
• All the Suspicious transactions, irrespective of whether conducted in cash or otherwise.
• All cross-border wire transfers exceeding INR 5 lakhs or its equivalent in foreign currency when the originating country is India, or the funds are destined to India.
• All the transactions related to the purchase and sale of immovable property of INR 50 lakhs or more, which are registered through the reporting entity.

Here is an infographic discussing the critical elements of AML record keeping required prescribed under PMLA, 2002.

When documents are maintained adequately, and in an organized manner, the efficiency of the AML efforts is enhanced.

AML India is one of the leading AML consultancy firms, assisting the reporting entities in India to design the comprehensive AML program in compliance with the PMLA and the IFSCA (AML, CFT, and KYC) Guidelines. We also impart training to the team on effectively implementing the AML program, including awareness of record-keeping requirements.