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CS Professional · Internal and Forensic Audit · Forensic Audit: Laws and Regulations

Following a bank fraud, officials from the Financial Intelligence Unit, India, a regulator, and law enforcement agencies need a structured forum for operational and policy co-operation on anti money-laundering. Under the Prevention of Money-Laundering Act, 2002, which statement about the Inter-ministerial Co-ordination Committee is correct?

The Central Government may constitute the Committee by notification. Section 72A of the PMLA, 2002 gives it a coordination role, covering operational co-operation among the Government, law enforcement agencies, FIU-India and regulators, and policy co-operation on anti money-laundering and countering terrorist financing. It does not try offences or hear appeals.

  1. AIt is a standing court that tries money-laundering offences and passes convictions
  2. BIt must be constituted by the Reserve Bank of India with the consent of all banks
  3. CIt adjudicates appeals against attachment orders passed by the Director
  4. DThe Central Government may constitute it by notification for inter-departmental and inter-agency coordination, including operational and policy co-operation on anti money-laundering and countering terrorist financingCorrect

Explanation

Section 72A permits the Central Government, by notification, to constitute the Committee for coordination purposes such as operational co-operation among the Government, law enforcement agencies, the FIU-India and regulators, and policy co-operation. It has no judicial or appellate function, and the RBI does not constitute it.

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