Home › Circulars › RBI/2013-14/643

MTSS Indian Agents Must Nominate Designated Director for PMLA Compliance

Current · Source: Reserve Bank of India · RBI/2013-14/643 · issued 16 Jun 2014 · ~2 min read
Quick answerRBI mandates Indian Agents under MTSS to nominate a Board Director as 'designated Director' for PMLA compliance, following the 2012 amendment empowering the Director to impose fines for non-compliance.
The rule, in the simplest words
How it plays out — a real example

Rajesh, the compliance head at a Mumbai-based bank that acts as an Indian Agent under MTSS, receives this circular. He immediately schedules a board meeting to nominate the bank's Executive Director as the designated Director, updates the AML policy to include the Director's oversight role, and informs the RBI of the nomination, ensuring the bank avoids potential fines.

What changed

The Prevention of Money Laundering (Amendment) Act, 2012 amended Section 13(2), giving the Director the power to issue warnings, direct compliance, require reports, or levy fines (₹10,000 to ₹1 lakh per failure) on reporting entities or their designated directors/employees. RBI now requires Authorised Persons acting as Indian Agents under MTSS to nominate a Director on their Boards as the 'designated Director' to ensure compliance with PMLA obligations.

What it means for you

Indian Agents under MTSS must formally appoint a Board-level Director responsible for AML/CFT compliance. This creates a clear accountability point for regulators, and non-compliance can lead to fines on the entity, the designated director, or employees. Banks and other authorised persons need to update their governance structures and ensure the designated director is actively overseeing compliance.

What you must do

Who it affects

Authorised Persons acting as Indian Agents under MTSS, Banks and financial institutions offering cross-border remittance services, Board of Directors of these entities

❓ Common questions

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 can be nominated as the designated Director?

Any Director on the Board of the reporting entity (Indian Agent under MTSS) can be nominated as the designated Director.

Does this circular apply to all authorised persons or only those under MTSS?

This specific circular applies to Authorised Persons who are Indian Agents under the Money Transfer Service Scheme (MTSS).

📜 Read the original circular — full text as issued by RBI
Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications Withdrawn with effect from November 16, 2021, February 18, 2022, May 02, 2022, May 13, 2022, May 21, 2024, July 12, 2024 & October 01, 2024 ( 500 kb ) Cross Border Inward Remittance under Money Transfer Service Scheme RBI/2013-14/643 A. P. (DIR Series) Circular No. 144 June 16, 2014 To, All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme (MTSS) Madam / Sir, Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/ Combating the Financing of Terrorism (CFT)/ Obligation of Authorised Persons under Prevention of Money Laundering Act (PMLA), 2002 - Amendment to Section 13(2) - Cross Border Inward Remittance under Money Transfer Service Scheme Please refer to our A.P. (DIR Series) Circular No.18 [A.P. (FL Series) Circular No. 05] dated November 27, 2009 on ‘Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009- Cross Border Inward Remittance under Money Transfer Service Scheme’, as amended from time to time. 2. With the enactment of Prevention of Money Laundering (Amendment) Act, 2012 and amendment to Section 13 of the Act which provides for “Powers of Director to impose fine”, the section 13(2) now reads as under: “If the Director, in the course of any inquiry, finds that a reporting entity or its designated director on the Board or any of its employees has failed to comply with the obligations under this Chapter, then, without prejudice to any other action that may be taken under any other provisions of this Act, he may— (a) issue a warning in writing; or (b) direct such reporting entity or its designated director on the Board or any of its employees, to comply with specific instructions; or (c) direct such reporting entity or its designated director on the Board or any of its employees, to send reports at such interval as may be prescribed on the measures it is taking; or (d) by an order, levy a fine on such reporting entity or its designated director on the Board or any of its employees, which shall not be less than ten thousand rupees but may extend to one lakh rupees for each failure.” 3. In view of the above amendment, Authorised Persons, who are Indian Agents under MTSS, may nominate a Director on their Boards as “designated Director” to ensure compliance with the obligations under the Prevention of Money Laundering (Amendment) Act, 2012. 4. The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and also under the, Prevention of Money Laundering Act, (PMLA), 2002, as amended from time to time and are without prejudice to permission /approvals, if any, required under any other law. Yours faithfully, (B. P. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/643 · issued 16 Jun 2014. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
⚙️ Operations
  • Maintain records of the nomination and any compliance reports submitted to the Director.
📜 Compliance
  • Nominate a Director on your Board as the 'designated Director' for PMLA compliance under MTSS.
  • Ensure the designated Director is aware of and oversees all AML/CFT obligations.
  • Review and update internal policies to reflect the designated Director's role and accountability.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Authorised Persons acting as Indian Agents under MTSS, Banks and financial institutions offering cross-border remittance services, Board of Directors of these entities), your first concrete step on “MTSS Indian Agents Must Nominate Designated Director for PMLA Compliance” is: “Nominate a Director on your Board as the 'designated Director' for PMLA compliance under MTSS.” (RBI issued this 16 Jun 2014).

  1. Circular: RBI/2013-14/643 -- MTSS Indian Agents Must Nominate Designated Director for PMLA Compliance
  2. Issued: 16 Jun 2014
  3. Action required: Nominate a Director on your Board as the 'designated Director' for PMLA compliance under MTSS.
  4. Action required: Ensure the designated Director is aware of and oversees all AML/CFT obligations.
  5. Action required: Review and update internal policies to reflect the designated Director's role and accountability.
  6. Action required: Maintain records of the nomination and any compliance reports submitted to the Director.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

💬 Banker Discussion

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8942&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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