What changed
The Prevention of Money Laundering (Amendment) Act, 2012 amended Section 13 of the Act, granting the Director powers to levy fines on reporting entities or their designated directors/employees for non-compliance. RBI advises payment system operators to nominate a designated director on their board to oversee PMLA compliance.
What it means for you
Payment system providers must formally assign a board-level director to take responsibility for anti-money laundering compliance. Non-compliance can now result in fines ranging from ₹10,000 to ₹1 lakh per failure, increasing accountability at the highest level.
What you must do
- Nominate a director on your board as the 'designated director' for PMLA compliance.
- Ensure the designated director oversees adherence to KYC/AML/CFT obligations under PMLA.
- Update internal compliance policies to reflect the new penalty framework for failures.
- Communicate the designation and responsibilities to the RBI as required.
Who it affects
Payment system operators, System participants, Prepaid payment instrument issuers
What is the penalty for non-compliance under the amended Section 13(2)?
The Director can levy a fine of not less than ₹10,000 and up to ₹1 lakh for each failure to comply with PMLA obligations.
Who needs to be appointed as the designated director?
Payment system operators must nominate a director on their board to ensure compliance with the Prevention of Money Laundering (Amendment) Act, 2012.