What changed
The Prevention of Money Laundering (Amendment) Act, 2012 revised Section 13(2), empowering the Director to impose fines on reporting entities for non-compliance. Authorised Persons under MTSS must now nominate a designated Director on their Board to ensure adherence to PMLA obligations.
What it means for you
Banks and other authorised persons acting as Indian Agents under MTSS face stricter accountability. The designated Director is personally responsible for compliance, and failures can lead to written warnings, specific directives, reporting requirements, or fines ranging from ₹10,000 to ₹1 lakh per instance.
What you must do
- Nominate a designated Director on your Board for PMLA compliance under MTSS.
- Ensure the designated Director oversees KYC/AML/CFT obligations as per the amended Act.
- Update internal policies to reflect the new penalty structure for non-compliance.
- Train staff on the enhanced powers of the Director under Section 13(2).
Who it affects
Authorised Persons acting as Indian Agents under MTSS, Designated Directors on Boards of reporting entities
What is the penalty range for non-compliance under the amended Section 13(2)?
The fine shall not be less than ₹10,000 but may extend up to ₹1 lakh for each failure.
Who needs to be nominated as a designated Director?
Authorised Persons under MTSS must nominate a Director on their Board to ensure compliance with PMLA obligations.