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PMLA DETAILED NOTES | PAPER 1 – PRINCIPLES & PRACTICES OF BANKING | MODULE A – INDIAN FINANCIAL SYSTEM | KYC/ AML/ CFT norms | PMLA Act | PART 1

PMLA DETAILED NOTES PART 1 | PPB MODULE A 

This article covers the detailed provisions of PMLA DETAILED NOTES Prevention of Money-Laundering Act, 2002 to help in JAIIB Exam 2023.

Dear JAIIB Candidates, how are you doing?

Hopefully, all fine, energetic & magnetic!

Well, keep your energy intact because we are going to go through all the PMLA Act 2022 to get done with this one topic to effectively cover the Syllabus of Junior Associate of the Indian Institute of Bankers Exams 2023. We will be going through the act in parts. So, worry not if you find this article ending with a quick break in the topic. Keeping the text short & brief, we will go through the Principles & Practices of Banking Syllabus 2023 & successfully complete the upcoming JAIIB Attempts!

CLICK TO CLEAR JAIIB 2023 EXAM IN FIRST ATTEMPT

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Today, we will just take an overview of the sections & go through the introduction of PMLA i.e. why there was a need of PMLA & how the Act provides the solution & why as a banker, you need to understand the provisions of this Act.

This is the whole of the act contained in 75 sections & 1 schedule.

THE PREVENTION OF MONEY-LAUNDERING ACT, 2002
CHAPTER I
PRELIMINARY
Sections
Section – 1 contains the Short title, extent and commencement
Section – 2 contains the Definitions
CHAPTER II
OFFENCE OF MONEY-LAUNDERING
Section – 3 contains the Offence of money-laundering
Section – 4 contains the Punishment for money-laundering
CHAPTER III
ATTACHMENT, ADJUDICATION AND CONFISCATION
Section – 5 contains the Attachment of property involved in money-laundering
Section – 6 contains the Adjudicating Authorities, composition, powers, etc
Section – 7 contains the Staff of Adjudicating Authorities
Section – 8 contains the Adjudication
Section – 9 contains the Vesting of property in Central Government
Section – 10 contains the Management of properties confiscated under this Chapter
Section – 11 contains the Power regarding summons, production of documents and evidence, etc
Section – 11A contains the Verification of identity by reporting entity
CHAPTER IV
OBLIGATIONS OF BANKING COMPANIES, FINANCIAL INSTITUTIONS AND INTERMEDIARIES
Section – 12 contains the Reporting entity to maintain records
Section – 12A contains the Access to information
Section – 12AA contains the Enhanced due diligence
Section – 13 contains the Powers of Director to impose fine
Section – 14 contains the No civil or criminal proceedings against reporting entity, its directors and employees in certain cases
Section – 15 contains the Procedure and manner of furnishing information by reporting entities
CHAPTER V
SUMMONS, SEARCHES AND SEIZURES, ETC
Section – 16 contains the Power of survey
Section – 17 contains the Search and seizure
Section – 18 contains the Search of persons
Section – 19 contains the Power to arrest
Section – 20 contains the Retention of property
Section – 21 contains the Retention of records
Section – 22 contains the Presumption as to records or property in certain cases
Section – 23 contains the Presumption in inter-connected transactions
Section – 24 contains the Burden of proof
CHAPTER VI
APPELLATE TRIBUNAL
Section – 25 contains the Appellate Tribunal
Section – 26 contains the Appeal to Appellate Tribunal
Section: 27 to 34 have been omitted
Section – 35 contains the Procedure and powers of Appellate Tribunal
Section – 36 contains the Distribution of business amongst Benches
Section – 37 contains the Power of Chairperson to transfer cases
Section – 38 contains the Decision to be by majority
Section – 39 contains the Right of appellant to take assistance of authorised representative and of Government to appoint presenting officers
Section – 40 contains the Members, etc
Section – 41 contains the Civil court not to have jurisdiction
Section – 42 contains the Appeal to High Court
CHAPTER VII
SPECIAL COURTS
Section – 43 contains the Special Courts
Section – 44 contains the Offences triable by Special Courts
Section – 45 contains the Offences to be cognizable and non-bailable
Section – 46 contains the Application of Code of Criminal Procedure, 1973 to proceedings before Special Court
Section – 47 contains the Appeal and revision
CHAPTER VIII
AUTHORITIES
Section – 48 contains the Authorities under Act
Section – 49 contains the Appointment and powers of authorities and other officers
Section – 50 contains the Powers of authorities regarding summons, production of documents and to give evidence, etc
Section – 51 contains the Jurisdiction of authorities
Section – 52 contains the Power of Central Government to issue directions, etc
Section – 53 contains the Empowerment of certain officers
Section – 54 contains the Certain officers to assist in inquiry etc
CHAPTER IX
RECIPROCAL ARRANGEMENT FOR ASSISTANCE IN CERTAIN MATTERS AND PROCEDURE FOR
ATTACHMENT AND CONFISCATION OF PROPERTY
Section – 55 contains the Definitions
Section – 56 contains the Agreements with foreign countries
Section – 57 contains the Letter of request to a contracting State in certain cases
Section – 58 contains the Assistance to a contracting State in certain cases
Section – 58A contains the Special Court to release the property
Section – 58B contains the Letter of request of a contracting State or authority for confiscation or release the property
Section – 59 contains the Reciprocal arrangements for processes and assistance for transfer of accused persons
Section – 60 contains the Attachment, seizure and confiscation, etc
Section – 61 contains the Procedure in respect of letter of request
CHAPTER X
MISCELLANEOUS
Section – 62 contains the Punishment for vexatious search
Section – 63 contains the Punishment for false information or failure to give information, etc
Section – 64 contains the Cognizance of offences
Section – 65 contains the Code of Criminal Procedure, 1973 to apply
Section – 66 contains the Disclosure of information
Section – 67 contains the Bar of suits in civil courts
Section – 68 contains the Notice, etc
Section – 69 contains the Recovery of fine or penalty
Section – 70 contains the Offences by companies
Section – 71 contains the Act to have overriding effect
Section – 72 contains the Continuation of proceedings in the event of death or insolvency
Section – 72A contains the Inter-ministerial Co-ordination Committee
Section – 73 contains the Power to make rules
Section – 74 contains the Rules to be laid before Parliament
Section – 75 contains the Power to remove difficulties
THE SCHEDULE

 

Now lets talk about why the Prevention of Money-Laundering Act, 2002 was enacted. 

The PMLA is here to combat money laundering in India and has 3 main objectives: 

  1. To prevent and control money laundering activities. 
  2. To confiscate and seize the property obtained using laundered money; &
  3. To deal with any other issue connected with it in India. 

And the above objectives are achieved by casting the following obligations on all Reporting Entities (duly defined, will discuss in the second part of the Act):

  • verifying and maintaining records of the identity of all clients including beneficial owners
  • maintaining record of all transactions and submit timely reports to prescribed authorities at prescribed intervals
  • furnishing FIU-IND information

This is all you need to begin the PMLA 2023 preparation. Do let me know, if you have any query in regard to topic or study material.

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