Original IDs mandatory for bank transactions above 50,000

The Department of Revenue under the administrative control of the Finance Ministry has issued a notification making an amendment to the Prevention of Money-laundering (Maintenance of Records) Rules.

The new rule now requires the reporting entity to compare the copy of the officially valid identification document produced by the client with the original and record it on the copy. The Prevention of Money Laundering Act (PMLA) forms part of the legal framework put in place by the government to combat money laundering and generation of black money.

The PMLA and its rules impose obligation on reporting entities like banks, financial institutions and intermediaries such as stock brokers to verify the identity of clients, maintain records and furnish information to the Financial Intelligence Unit of India (FIU-IND).

According to Rule, every reporting entity shall at the time of commencement of an accountbased relationship, identify its clients, verify their identity and obtain information on the purpose and intended nature of the business relationship.

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