The Prevention of Money-Laundering Act, 2002 came into effect on 1 July 2005.

Section 12 (1) prescribes the obligations on banks, financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month; (b) to furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed and t records of the identity of all its clients. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above, must be maintained for ten years after the transactions finished. It is handled by the Indian Income Tax Department.

The provisions of the Act are frequently reviewed and various amendments have been passed from time to time.

The recent activity in money laundering in India is through political parties, corporate companies and share market. It is investigated by the Indian Income Tax Department.

Bank accountant must record all the transactions whose amount will be more than Rs. 10 Lakhs. Bank accountant must maintain this records for 10 years. Banks will also make cash transaction report (CTR) and Suspicious transactions.

Be careful..