§ Section 2(1)(wa)

A reporting entity means a banking company, financial institution, intermediary, or a person carrying on a designated business or profession.

Banking companies

Banks and co-operative banks to which the Banking Regulation Act, 1949 applies

Financial institutions

Financial institutions as defined in the RBI Act, including NBFCs, chit fund companies, housing finance institutions, authorised persons, payment system operators and the Department of Posts

Intermediaries

Stock-brokers, sub-brokers, share transfer agents, bankers to an issue, registrars, merchant bankers, underwriters, portfolio managers, investment advisers and others registered with SEBI; recognised stock exchanges; and PFRDA-registered intermediaries

Designated businesses and professions, s. 2(1)(sa)

Casinos and games of chance; Inspectors-General of Registration as notified; real estate agents as notified; dealers in precious metals, precious stones and other high-value goods as notified; persons safekeeping cash and liquid securities for others as notified; and other activities notified by the Central Government

Casinos

Persons carrying on activities for playing games of chance for cash or kind, including casinos

Real estate agents

Brought in as notified by the Central Government; property is a favoured end point of laundering

Dealers in precious metals and stones

Notified in respect of cash transactions of ten lakh rupees or more

Trust and company service providers

Notified in 2023: persons who, for others, act as formation agents of companies, act or arrange for others to act as directors, secretaries, partners or nominee shareholders, provide registered offices, or act as trustees

Chartered accountants, company secretaries and cost accountants

Notified in 2023 when, on behalf of a client, they carry out specified financial transactions, such as buying and selling immovable property, managing client money, securities or accounts, organising contributions for companies, creating or operating companies, LLPs or trusts, and buying and selling business entities; ordinary audit and advisory work is not covered

Virtual digital asset service providers

Notified in March 2023: exchange between VDAs and fiat currencies; exchange between forms of VDAs; transfer of VDAs; safekeeping or administration of VDAs or instruments enabling control over them; and participation in financial services related to an issuer's offer and sale of VDAs

§ Foreign VDA service providers serving Indian users

Registration is required regardless of physical presence. An offshore VDA service provider serving users in India is expected to register with FIU-IND and comply with the Chapter IV obligations.

Enforcement. From December 2023, FIU-IND issued compliance notices to several offshore platforms operating without registration, and sought the blocking of their websites, prompting some to register.

The reason. Without registration, transactions by Indian users on offshore platforms would fall outside Indian anti-money laundering oversight entirely.

s. 11A

Verify the identity of clients and beneficial owners, including by Aadhaar authentication where permitted, offline verification, passport or other officially valid documents

s. 12

Maintain records of all transactions, and of documents evidencing identity, account files and business correspondence; furnish prescribed information to FIU-IND; keep records for five years after the transaction or the end of the relationship

s. 12A

The Director may call for records and information, which are kept confidential

s. 12AA

Enhanced due diligence before specified transactions: verifying the client, examining ownership and the sources of funds, and recording the purpose

s. 13

The Director, FIU-IND may inquire, direct an audit, and on failure issue a warning, direct compliance, require reports, or impose a monetary penalty of not less than ten thousand rupees and up to one lakh rupees for each failure, on the entity, its designated director or employees

s. 14

No civil or criminal proceedings lie against a reporting entity, its directors or employees for furnishing information under the Act in good faith

§ What is reported

• Cash transaction reports: cash transactions above ten lakh rupees, or integrally connected series of cash transactions in a month.

• Suspicious transaction reports: transactions that give rise to a reasonable ground of suspicion, appear to have no economic rationale, or appear to involve proceeds of crime, whatever the amount.

• Other reports as prescribed, such as counterfeit currency reports, non-profit organisation transaction reports, and cross-border wire transfer reports.

Designated Director

A person designated by the reporting entity to ensure overall compliance with Chapter IV, ordinarily the managing director or a whole-time director; may be penalised under s. 13

Principal Officer

A senior officer designated to furnish information to FIU-IND and to be the point of contact; commonly called the AML compliance officer or money laundering reporting officer

Staff and systems

Carry out client due diligence, monitor transactions, generate alerts, and receive training

Registration

The entity registers on FIU-IND's reporting portal and communicates the names and details of its Designated Director and Principal Officer