IRDA’s Money Laundering Notification

In 2002 the Indian parliament passed the Prevention of Money Laundering Act 2002. The Act is applicable to every banking company, financial institution and intermediary. It extends to the insurance industry as well.

The implementation of the Act was deferred until 1^st July 2005 while issues raised by various parts of the financial services industry were addressed. Those issues primarily concerned practical problems in implementing the provisions of the Act. The issues raised by the insurance industry took longer to resolve, but on 31^st March 2006 the Indian insurance industry regulator, the IRDA, notified its Anti Money Laundering (AML) Guidelines effective from 1^st August 2006.

The thrust of the guidelines is essentially as follows: