The Financial Intelligence Unit (FIU-IND) and the National Housing Bank (NHB) have signed an MoU as part of efforts in effective implementation of requirements of the Prevention of Money Laundering Act and Rules.
About the Prevention of Money Laundering Act (PMLA)
- The Prevention of Money Laundering Act (PMLA) is a law in India that was enacted in 2002 to prevent money laundering under Article 253.
- It also provides for the confiscation of property that is derived from money laundering.
- Objective: PMLA empowers implementation of the international conventions and to give effect to the Recommendations of the Financial Action Task Force (FATF) on addressing the problem of money laundering.
- Authority: The Director of the FIU-IND and the Director (Enforcement) have the power to enforce the PMLA.
- Prescribed Obligation: The Act obligates banking companies, financial institutions and intermediaries to verify and maintain records of the identity of all its clients and all transactions.
- Special Courts: Under PMLA, Special Courts are used to try the offenses punishable under PMLA and offenses with which the accused may, under the Code of Criminal Procedure 1973, be charged at the same trial.
- Bail Provision: Under Section 45 of the PMLA, bail conditions under the The Prevention of Money Laundering Act (PMLA) has been specified,
- The accused must prove that there is no prima facie case against them
- The accused must prove that they are unlikely to commit another offense while on bail
- The public prosecutor must be given an opportunity to oppose the bail application
- The court must be satisfied that there are reasonable grounds for believing the accused is not guilty
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About Financial Intelligence Unit – India (FIU-IND)
- It was set up as the central national agency in 2004 responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
- Reporting Authority: FIU-IND is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.
- Function:
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- Collection of Information: FIU is the central reception point for receiving Cash Transaction reports (CTRs), Non-Profit Organisation Transaction Report(NTRs), Cross Border Wire Transfer Reports (CBWTRs), Reports on Purchase or Sale of Immovable Property (IPRs) and Suspicious Transaction Reports (STRs) from various reporting entities.
- Sharing of Information: Share information with national intelligence/law enforcement agencies, national regulatory authorities and foreign Financial Intelligence Units.
- Act as Central Repository: Establish and maintain national data base on the basis of reports received from reporting entities.
- Coordination: Coordinate and strengthen collection and sharing of financial intelligence through an effective national, regional and global network to combat money laundering and related crimes.
- Research and Analysis: Monitor and identify strategic key areas on money laundering trends, typologies and developments.
National Housing Bank (NHB)
- NHB is a regulatory body for overall regulation and licensing of housing finance companies in India.
- NHB is an apex financial institution for housing and was set up by an Act of Parliament in 1987.
- Nodal Ministry: NHB is under the jurisdiction of Ministry of Finance
- Objective: NHB aims to build a strong, healthy, cost-effective, and viable Housing Finance System.
- Supervision: Housing Finance Companies (HFCs) are regulated by the Reserve Bank of India, whereas NHB has the power of registration and supervision of Housing Finance Companies (HFCs)
- Functions:
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- Supervision and grievance redressal regarding Housing Finance Companies (HFCs).
- Surveillance of HFC through On-site & Off-site Mechanisms and co-ordinates with regulators.
- Financing and promotion and development of HFCs
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