Anti-money laundering, or AML, is a general term covering rules and regulations enacted to prohibit criminals from making or moving unlawful monies. While AML regulations target a wide range of illicit behaviors, some of the most significant are tax evasion, public corruption, and market manipulation via wash trading.
AML standards are established by various governmental entities and pieces of legislation. Money laundering is prohibited in India by agencies such as the Enforcement Directorate and the Financial Intelligence Unit, which protect the provisions and the public interest. AML regulations are continually being imposed on broker-dealers and futures commission merchants.
The Prevention of Money Laundering Act of 2002 and the Prevention of Money Laundering (Maintenance and Records) Act of 2005 have both contributed to anti-money laundering requirements in India.
Many financial institutions utilize AML software to detect dubious conduct due to the intricacy of the related legislation. These software solutions handle various tasks, including matching client identities to government lists of forbidden users and creating records required for compliance.
AML is inextricably tied to Know Your Customer (KYC) standards, which entail confirming clients’ identities and income sources. KYC also compels financial firms to monitor their users’ activities continuously.
