Internal and Forensic Audit · Forensic Audit: Laws and Regulations

Inter-ministerial Co-ordination Committee under Section 72A PMLA

Updated 11 October 2026 · Fact-checked

The Inter-ministerial Co-ordination Committee is a body the Central Government may constitute by notification under section 72A of the Prevention of Money-Laundering Act, 2002. It coordinates government departments, law enforcement agencies, FIU-India and regulators on anti money-laundering and counter-terrorist-financing operations and policy. It is not found in the Companies Act, 2013.

Understand Inter-ministerial Co-ordination Committee under the Companies Act, 2013

Start with a caution. Students search for this topic as "under the Companies Act, 2013". The Committee is not created by that Act. It comes from section 72A of the Prevention of Money-Laundering Act, 2002 (PMLA), inserted by Act 23 of 2019 with effect from 1 August 2019. In an answer, say this clearly and then link it to company law.

The problem it solves is simple. Corporate fraud and money laundering touch many bodies at once: the Ministry of Corporate Affairs, SEBI, the RBI, investigating agencies, the Financial Intelligence Unit, India (FIU-IND) and others. If each acts alone, information gets stuck and action is slow. The Committee gives one forum for them to work together.

Section 72A says the Central Government may, by notification, constitute the Committee. It is an enabling power, not a duty. The Committee is for inter-departmental and inter-agency coordination. It does not investigate, prosecute or punish anyone.

The Act lists the purposes: operational co-operation between the Government, law enforcement agencies, FIU-IND and regulators or supervisors; policy co-operation and co-ordination across all relevant or competent authorities; consultation among authorities, the financial sector and other sectors on AML/CFT laws, regulations and guidelines; development and implementation of AML/CFT policies; and any other matter the Central Government specifies by notification.

For a forensic auditor, the link to companies is practical. Section 70 of the PMLA makes persons in charge of a company liable when the company contravenes the Act, and section 177 of the Companies Act, 2013 gives the Audit Committee a role in internal financial controls, risk management and the vigil mechanism. These are different bodies. The Audit Committee is a board committee inside a company. The Inter-ministerial Co-ordination Committee sits in government.

Key rules to remember

Source and power: PMLA s. 72A: Central Government MAY, by notification, constitute the Committee; Enabling power. Inserted by Act 23 of 2019, w.e.f. 1-8-2019. It is not a Companies Act body.
Purposes (a) to (e): (a) operational co-operation; (b) policy co-operation and co-ordination; (c) consultation with authorities, financial and other sectors; (d) developing and implementing AML/CFT policy; (e) other matters notified; Operational co-operation is between the Government, law enforcement agencies, FIU-IND and regulators or supervisors.
Nature of the Committee: Coordination body, not an investigating or punishing authority; The section gives no power to investigate, prosecute or penalise.
Company officers under PMLA: s. 70(1): persons in charge of and responsible for the company's business, with the company, are deemed guilty; defence if no knowledge or all due diligence exercised; Section 70(2) adds directors, managers, secretaries or officers where consent, connivance or neglect is proved.
Audit Committee composition: Companies Act s. 177(2): minimum 3 directors, independent directors in majority; Do not confuse this internal board committee with the Inter-ministerial Co-ordination Committee.

How to solve Inter-ministerial Co-ordination Committee under the Companies Act, 2013 questions

Use this method for any question on the Committee, whether it asks for a description, a comparison or a case analysis.

1Identify the source. State that the Committee arises under section 72A of the PMLA, 2002, not under the Companies Act, 2013.
2State the power. The Central Government may constitute it by notification. Mention that it was inserted in 2019.
3List the purposes (a) to (e) in your own words, grouping them as operational, policy, consultation and policy development.
4Name the bodies being coordinated: Government departments, law enforcement agencies, FIU-IND, regulators and supervisors, and the financial sector.
5Link to the facts. For a company fraud case, show how coordination helps, for example sharing information between the regulator, FIU-IND and the investigating agency.
6Apply company-side law if asked: section 70 PMLA on liability of company officers and section 177 Companies Act on the Audit Committee and vigil mechanism.
7Conclude. Say what the Committee does and does not do. It coordinates; it does not investigate or punish.

Quickest way: Source, Power, Purpose, Limit

When to use it: Use it for short notes and 5 to 8 mark questions when time is tight.

Source: PMLA section 72A, inserted 2019.
Power: Central Government may constitute by notification.
Purpose: operational co-operation, policy co-ordination, consultation, AML/CFT policy, other notified matters.
Limit: coordination only, no investigation or punishment, and not a Companies Act body.

Common mistakes in Inter-ministerial Co-ordination Committee under the Companies Act, 2013

Saying the Committee is constituted under the Companies Act, 2013.
The search phrase and the chapter on company fraud suggest a Companies Act source.
Fix: Write that it is under section 72A of the PMLA, 2002, and relate it to company-related offences only as context.
Writing that the Central Government must constitute the Committee.
Students assume statutory bodies are mandatory.
Fix: Use the word "may". The power is enabling and exercised by notification.
Giving the Committee powers of investigation, search or prosecution.
It is confused with SFIO or the Enforcement Directorate.
Fix: Say it only coordinates agencies, regulators and policy. Investigation powers sit with other authorities.
Confusing it with the Audit Committee under section 177.
Both have "Committee" in the name.
Fix: The Audit Committee is a company board committee. The Inter-ministerial Committee is a government coordination body.
Omitting FIU-IND from the list of coordinated bodies.
Students remember only ministries and regulators.
Fix: Remember that clause (a) names the Government, law enforcement agencies, FIU-IND and regulators or supervisors.
Inventing the Committee's membership or meeting frequency.
Students try to add detail to fill the answer.
Fix: The section specifies none. Say the composition is as notified by the Central Government.

Worked examples

Example 1

Explain the Inter-ministerial Co-ordination Committee and its purposes. Is it a body under the Companies Act, 2013? (6 marks)

Show the solution

Source: it is under section 72A of the PMLA, 2002, inserted by Act 23 of 2019 with effect from 1 August 2019. It is not created by the Companies Act, 2013.
Power: the Central Government may, by notification, constitute it for inter-departmental and inter-agency coordination.
Purposes: (a) operational co-operation between the Government, law enforcement agencies, FIU-IND and regulators or supervisors; (b) policy co-operation and co-ordination across relevant authorities; (c) consultation among authorities, the financial sector and other sectors on AML/CFT laws, regulations and guidelines; (d) developing and implementing AML/CFT policies; (e) any other matter notified.
Link to companies: company-related fraud often involves laundering of proceeds, so coordination between regulators and agencies helps.
Limit: it coordinates and does not investigate or punish.

Answer: The Committee is a coordination body under section 72A of the PMLA, 2002, constituted at the Central Government's option by notification. It is not a Companies Act body. Its purposes are operational co-operation, policy co-ordination, consultation, AML/CFT policy development and other notified matters.

Example 2

Meridian Components Pvt Ltd, a Pune company, routed funds from a fraudulent invoicing scheme through several accounts. A regulator, an investigating agency and FIU-IND each hold part of the information but act separately. Advise how section 72A of the PMLA can help and who in the company may face liability. (8 marks)

Show the solution

Provision: section 72A allows the Central Government to constitute the Committee for operational co-operation between the Government, law enforcement agencies, FIU-IND and regulators or supervisors.
Analysis: the facts show fragmented information across a regulator, an agency and FIU-IND. This is the gap the Committee addresses through coordination.
Caveat: the Committee exists only if the Central Government has constituted it by notification, and it does not itself investigate Meridian.
Company liability: if the company contravened the PMLA, section 70(1) deems every person in charge of and responsible for the business, and the company, guilty.
Defence: a person is not liable if they prove the contravention took place without their knowledge or that they exercised all due diligence to prevent it.
Under section 70(2), a director, manager, secretary or other officer is also liable if the contravention is proved to have occurred with their consent or connivance or to be attributable to their neglect.
Governance point: the Audit Committee under section 177 of the Companies Act, 2013 evaluates internal financial controls and risk management, and the company's vigil mechanism supports early reporting of concerns.

Answer: Section 72A supports coordination among the regulator, the agency and FIU-IND, subject to the Committee being notified, but it does not investigate. Meridian and the persons in charge of its business may be liable under section 70 of the PMLA, with the due diligence and no-knowledge defence available. Officers are also liable on proof of consent, connivance or neglect.

Exam tips

Open every answer with the source: PMLA section 72A. This shows you have read the law and avoids the Companies Act trap.
Learn the five purposes (a) to (e) as a list. Examiners reward complete lists.
In case questions, follow provision, analysis, conclusion. Add section 70 PMLA and section 177 Companies Act only when the facts raise company liability or governance.
Use the word "may" and the phrase "by notification". Do not state membership details the section does not give.

Practice questions from Forensic Audit: Laws and Regulations

Inter-ministerial Co-ordination Committee under the Companies Act, 2013 in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Inter-ministerial Co-ordination Committee under the Companies Act, 2013: frequently asked questions

Is the Inter-ministerial Co-ordination Committee part of the Companies Act, 2013?

No. It is provided in section 72A of the Prevention of Money-Laundering Act, 2002. It matters for company fraud because laundering often follows corporate offences, but the source is the PMLA.

What does the Inter-ministerial Co-ordination Committee do?

It coordinates the Government, law enforcement agencies, FIU-IND and regulators or supervisors on operations and policy. It also supports consultation with the financial and other sectors and the development of AML/CFT policies. It does not investigate or punish.

Is the Central Government bound to constitute the Committee?

No. Section 72A says the Central Government may constitute it by notification. It is an enabling provision.

How is it different from the Audit Committee under section 177?

The Audit Committee is a board committee of a listed public company or prescribed class of company. It must have at least three directors with independent directors in a majority. The Inter-ministerial Co-ordination Committee is a government body for coordinating authorities on AML/CFT.