Ministry of Finance 

On 7-3-2023, the Ministry of Finance notified the Prevention of Money- laundering (Maintenance of Records) Amendment Rules, 2023 to amend the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. The provisions came into effect on 7-3-2023.

Key Points:

  1. The definition of “Group” has been inserted. It includes a parent entity and all the entities in respect of which, for the reason of ownership or control, a consolidated financial statement for financial reporting purposes,—

    (i) is required to be prepared under any law for the time being in force or the accountingstandards of the country or territory of which the parent entity is resident; or

    (ii) would have been required to be prepared had the equity shares of any of the enterprises were listed on a stock exchange in the country or territory of which the parent entity is resident.

  2. Definition of “Politically Exposed Persons” has been introduced.

  3. Rule 3A relating to Implementation of Policies by groups has been introduced which says that groups are required to implement group-wide policies for the purpose of discharging obligations under the provisions of Chapter IV (Obligations of Banking Companies, Financial Institutions and Intermediaries) of the Prevention of Money-laundering Act, 2002.

  4. Earlier, the “Controlling ownership interest” meant ownership of/ entitlement to more than 25% of shares/capital/profits of the company. Now, it has been reduced to 10% of shares/ capital/ profits.

  5. In Rule 9, sub-rule (9-A) has been inserted which states that every Banking Company/ Financial Institution/ intermediary will have to register the details of a client on the DARPAN Portal of NITI Aayog in case the client is a non-profit organization and maintain the registration records for a period of 5 years.

  6. In Rule 9, sub-rule (9-B) has also been inserted which states that where the client has submitted any documents, the client is also supposed to submit to the reporting entity any update of such documents within 30 days of updating.

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