International Transactions of more than Rs. 50,000 now comes under Scrutiny

The Indian government introduced a new amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, in an effort to improve record-keeping for international transactions exceeding Rs 50,000.

According to a report, the move aims to combat terror financing by scrutinising such transactions more closely.

The amended rules require reporting entities to identify their clients, verify their identities, and determine the purpose of the business if it is not clearly defined. This additional safeguard will ensure that international transactions exceeding Rs 50,000 are thoroughly scrutinised.

Furthermore, the most recent amendment requires reporting entities, particularly those that are part of a group, to put in place adequate safeguards to protect the confidentiality and use of information exchanged.

These safeguards are vital in preventing any leaks that could jeopardise ongoing investigations.

According to the official notice, each reporting entity has a duty of “identify its clients, verify their identity using reliable and independent sources of identification, get information on the purpose and intended nature of the business relationship, where applicable, and take reasonable steps to understand the nature of the customer’s business, as well as the company’s ownership and control.”

Furthermore, reporting entities must determine whether a client is acting on behalf of a beneficial owner and take the necessary steps to identify and verify the beneficial owner’s identity through the use of reliable and independent sources of identification.

The new amendment is part of India’s ongoing efforts to strengthen anti-money laundering measures and prevent funds from flowing to terrorist organisations. Authorities hope to reduce the risk of terrorist financing and keep the country’s financial system secure by tightening record-keeping requirements for international transactions.