Under the PMLA, the verification of identity of clients

Solution

Under the Prevention of Money Laundering Act and the rules made thereunder, reporting entities are required to verify the identity of their clients through the Know Your Customer (KYC) process before establishing a business relationship and to undertake ongoing due diligence. KYC norms require the collection and verification of identity and address proof and the monitoring of transactions. These measures help prevent the misuse of financial channels for money laundering and are a cornerstone of the anti-money-laundering compliance framework.