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CS Executive · Economic, Commercial and Intellectual Property Laws · Prevention of Money Laundering

Mehta Finserv, a non-banking lender, discovers that a client's repeated large deposits are linked to an offence and the client keeps showing the money as legitimate business income. Under the official text of the PMLA, 2002, which activity connected with proceeds of crime is expressly listed as making a person guilty of money-laundering?

Projecting or claiming proceeds of crime as untainted property is one of the listed activities under Section 3 of the PMLA. Along with concealment, possession, acquisition and use, it makes a person guilty of money-laundering, whereas ordinary banking or compliance acts are not listed.

  1. AProjecting or claiming the proceeds as untainted propertyCorrect
  2. BMaintaining a savings account in the person's own name
  3. CFiling an income tax return on time
  4. DOpening a branch in a new city

Explanation

Section 3 lists concealment, possession, acquisition, use, and projecting or claiming proceeds of crime as untainted property. Ordinary activities like holding an account or filing returns are not listed. Only the first option matches the text.

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