Anti-Money Laundering(AML)/Combating Financing Terrorism(CFT) - India in the Global Context

  KYC Obligation-Revision Jan 2026 In legal parlance, crypto currency is called Virtual Digital Asset (VDA) and the exchanges that trade them are called VDA Service Providers (VDA SPs). The Financial Intelligence Unit,(FIU-Ind) operating under the Ministry of Finance, Govt of India has classified all virtual digital asset service providers as “reporting entities” under the Prevention of Money Laundering Act, 2002. The designation took effect following a notification issued on March 7, 2023. Crypto exchanges, wallet providers, and related platforms, whether based in India or offshore, are now subject to the same compliance standards as banks and other regulated financial institutions, according to the new framework. All virtual digital asset service providers must register with FIU-IND to legally operate in the country. Platforms that fail to register face enforcement action, including financial penalties and potential criminal liability. The rules apply to centralized exchanges, cu...

  The Guidelines on Anti-Money laundering /Counter Financing of Terrorism (AML/CFT) were issued under Section 34 of the Insurance Act, 1938 on 31st March 2006. The Guidelines were made applicable to general insurance companies in the modified form effective from 1st January 2007. These were revised from time to time subsequent to respective amendments in PMLA 2002 Key Obligations for Insurance Companies Customer Due Diligence : Verify identities (KYC)at policy issuance, during claims, and for significant transactions, especially with large single premiums or unusual funding sources. Transaction Monitoring:  Continuously watch transactions for suspicious patterns indicative of money laundering or terrorism financing. Record Keeping:  Maintain client records and transaction details for five years after the business relationship ends. Reporting:  Report suspicious transaction reports(STRs) and cash transactions (CTRs) above thresholds to FIU-IND Designated Di...

The red flags in the capital market may be grouped into following classes: A. Based on type of intermediary 1. Stock Exchanges 2. Brokers 3. Depository Participants 4. Mutual Funds 5. Others B. General  1. Financial and Business Red Flags 2. Investment and Fraud-Related Red Flags  Some examples of above are given for familiarizing the kind of red flags in the capital market activities for the uninitiated: A.1. Stock Exchanges Client Identification & Behavioural Red Flags   These indicators typically relate to unusual client behavior, transaction patterns, and the nature of the funds involved.     Reluctance or refusal to provide complete Know Your Customer (KYC) details , or providing vague/changing explanations when asked about the purpose of transactions. Frequent changes in contact details  or an unusual level of nervousness/aggression during routine verification. Use of nominee or proxy shareholders  and complex structures (e.g., shell companie...