Table of Contents
- Compliance Reporting Methods With Financial Intelligence Unit – india
- Governance & Compliance Responsibility
- Pml (maintenance Of Records) Rules, 2005 – Key Provisions
- Ctr (cash Transaction Report) & Str (suspicious Transaction Report) Under Reporting Process Under Pmla, 2002
- Types Of Reports Filed On Fingate 2.0
Compliance Reporting Methods with Financial Intelligence Unit – India
Financial Intelligence Unit – India is the central national agency responsible for:
- Receiving financial intelligence from reporting entities
- Analysing information relating to Money Laundering (ML) and Terrorist Financing (TF)
- Sharing actionable intelligence with law‑enforcement agencies and foreign FIUs
- Acting as a central repository of AML/CFT information
- Researching ML/TF trends and typologies
Governance & Compliance Responsibility
- Designated Director: Oversight & compliance assurance
- Principal Officer: Operational reporting to FIU‑IND
- Robust internal AML monitoring & verification mechanisms must exist
FINGate 2.0 is the mandatory reporting portal maintained by Financial Intelligence Unit – India, All Reporting Entities (REs) under PMLA must Register on FINGate 2.0 and File prescribed reports electronically morover that Portal is designed for ease of use and quick accessibilit
PML (Maintenance of Records) Rules, 2005 – Key Provisions
- Rule 2 – Key Functionaries & Client Identification: Appointment of Designated Director (DD) – overall responsibility for PMLA compliance and Principal Officer (PO) – responsible for reporting to Financial Intelligence Unit – India and CKYCR compliance of Reporting entities to upload KYC records to Central KYC Records Registry (CKYCR) and CKYC Identifier to be obtained and used for each client
- Rule 3 Maintenance of Records (MOR) of Transactions : Reporting entities must maintain records of Cash transactions exceeding ₹10 lakh (single or aggregated); Transactions involving non-profit organizations (NPOs) above prescribed limits; and Suspicious Transactions (STRs), irrespective of amount or threshold
- Rule 4 Record of Information : Records must contain the nature of the transaction, amount and currency, and parties involved. Date of transaction. Records must be sufficient to Establish an audit trail and Reconstruct individual transactions
- Rule 5 Internal Mechanism & Role of Designated Director : Establish an internal mechanism for monitoring and reporting transactions under Rule 3 and the designated director's duty. Periodic review of compliance, and Oversight of reporting framework and internal controls
- Rule 7 – Financial Intelligence Unit – India Registration & Reporting : Mandatory registration with Financial Intelligence Unit – India, Principal Officer responsible for Timely reporting of transactions specified under Rule 3 and Ensuring accuracy and completeness of reports
- Rule 7 (Continued)—Internal Verification Mechanism: The reporting entity must have an internal verification system to Examine transactions reportable under Rule 3 and Identify suspicious patterns before reporting to Financial Intelligence Unit – India
- Rule 8 Time Limits for Reporting: Cash Transactions / NPO / Property Transactions, On or before the 15th day of the succeeding month. and Suspicious Transaction Reports (STRs) Within 7 working days of establishing suspicion
- Rule 9 Client Due Diligence (CDD): Before commencing a business relationship Conduct KYC verification, Assess financial status / source of funds and Apply enhanced due diligence where required
- Rule 10 CKYCR Reporting: Mandatory Registration of the reporting entity with CKYCR, Uploading of client KYC records to CKYCR within prescribed timelines
- Rule 10A Financial Intelligence Unit – India Inquiry Action Taken Report: Action Taken Report (ATR) to be submitted: By 10th of the succeeding month and In response to queries / feedback received from FIU IND
- Annexure Digital KYC Process: Introduced due to COVID‑19 disruptions, allows a digital / Video‑based Customer Identification Process (V‑CIP) subject to safeguards prescribed by regulators (RBI / SEBI / IRDAI)
CTR (Cash Transaction Report) & STR (Suspicious Transaction Report) under Reporting Process under PMLA, 2002
Types of Reports Filed on FINGate 2.0
Core Report Types
| Report | Description |
|---|---|
| CTR | Cash Transactions above prescribed limits |
| STR | Suspicious Transactions (no threshold) |
| CBWTR | Cross Border Wire Transfers |
| CCR | Counterfeit Currency |
| NTR | Non Profit Organisation Transactions |
| PTR | Property Transactions |
I. Compliance Reporting Methods (CTR)
Meaning of Cash Transaction Report (CTR) : Reportable Transactions is A cash transaction report is required where any of the following occur during a calendar month are as follow like Single cash transaction exceeding INR 10 lakh; a series of interconnected cash transactions where the monthly aggregate exceeds INR 10 lakh, All cross‑border wire transfers exceeding INR 5 lakh; and All transactions involving cash receipts by NPOs exceeding INR 10 lakh. As far as the cash transaction report time limit is concerned, it is 15th day of the succeeding month (SM)
Cash Transaction Report The objective of cash transaction reporting is to enable the Financial Intelligence Unit – India to track high‑value cash transactions that may pose money‑laundering risks.
Cash transaction reporting – Step‑by‑Step Process
Step -1 : Transaction Monitoring: Whenever a customer deposits or withdraws cash, the bank / non-banking financial company records the transaction. And monitoring is done through core banking / anti-money laundering software.
Step -2 : Identification of Threshold Exceedance: A Cash Transaction Report is triggered when, during a calendar month A single cash transaction exceeds INR 10 lakh, or multiple cash transactions aggregate to more than INR 10 lakh. Aggregation covers multiple transactions by the same customer across accounts or branches.
Step -3 : Preparation of Cash Transaction Report : The Reporting Entity prepares a structured report containing customer identification details, Account number(s), Date(s) and amount(s) of transaction, Mode (cash deposit / withdrawal) and Branch/location details (Source of funds is captured if available)
Step -4 : Filing with Financial Intelligence Unit – India : The Cash Transaction Report is filed electronically on the Financial Intelligence Unit – India portal. The time limit is On or before 15th day of the succeeding month
Step -5 : Record Keeping : A copy of the Cash Transaction Report and underlying records must be retained for at least 5 years, and Records should be available for audit, inspection, or investigation
II. SUSPICIOUS TRANSACTION REPORT (STR)
Meaning of Suspicious Transaction Report (STR) : What Constitutes a Suspicious Transaction : A transaction is reportable as a suspicious transaction reporting where there is reasonable ground of suspicion that it Involves proceeds of crime, appears unusual or unjustified, or lacks economic / bona fide purpose and raises doubts of involvement in terrorist financing. The value of the transaction is irrelevant : suspicion alone triggers reporting. The time limit is within 7 working days of the reporting entity being satisfied that the transaction is suspicious. The objective of suspicious transaction reporting focuses on suspicion, not value, and is the most critical AML reporting obligation.
Suspicious transaction reporting – Step‑by‑Step Process
Step -1 : Detection of Suspicious Activity : Suspicion may arise from staff observation or automated alerts due to unusual transactions inconsistent with the customer profile, structuring (smurfing) to avoid cash transaction report thresholds, or dealings with high‑risk jurisdictions. Sudden increase in volume or complexity, transactions lacking economic or lawful purpose, and indicators of terrorist financing.
Step -2 : Assessment & Internal Investigation: The compliance/AML team reviews alerts, additional documents, and explanations may be examined, and the decision is based on “reasonable grounds of suspicion."
Step -3 : Preparation of , Suspicious Transaction Report : If suspicion persists, the Suspicious Transaction Report includes customer details, a complete transaction trail, clear grounds for suspicion, and supporting documentation / narrative analysis. The transaction amount is irrelevant for a suspicious transaction report.
Step -4 : Filing with the Financial Intelligence Unit – India : A suspicious transaction report is filed electronically only, and the time limit is within 7 working days of forming suspicion. Tipping off is prohibited – customer must not be informed.
Step -5 : Post‑Filing Follow‑up : Financial Intelligence Unit – India may analyze or share information with enforcement agencies. The reporting entity must continue enhanced monitoring of the account
Key Differences – Cash Transaction Report vs Suspicious Transaction Report
|
Particulars |
Cash Transaction Report |
Suspicious Transaction Report |
|
Basis |
Monetary threshold |
Suspicion |
|
Threshold |
INR 10 lakh (cash) |
Not applicable |
|
Periodicity |
Monthly |
Event‑based |
|
Timeline |
15th of succeeding month |
Within 7 working days |
|
Customer Intimation |
Not required |
Strictly prohibited |
Counterfeit Currency Report (CCR):
Reportable Transactions of Cash Transactions involving forged or counterfeit currency notes or bank notes. Time Limit for filling is 15th day of the succeeding month
Immovable Property Transaction Report (IPTR) :
Reportable transactions are the purchase or sale of immovable property valued at INR 50 lakh or more, and the time limit for filing is the 15th day of the succeeding month.
Summary Compliance Reporting Methods with Financial Intelligence Unit India
|
Report Type |
Key Coverage |
Threshold |
Reporting Timeline |
|
Cash Transaction Report |
High‑value cash & wire transfers, NPO receipts |
INR 10L / INR 5L |
15th of SM |
|
Suspicious Transaction Report |
Suspicious transactions (value irrelevant) |
NA |
Within 7 working days |
|
Counterfeit Currency Report |
Counterfeit currency transactions |
NA |
15th of SM |
|
Immovable Property Transaction Report |
Immovable property transactions |
≥ INR 50 lakh |
15th of SM |
Reporting is transaction‑based, not merely entity‑based. One entity may file multiple report types depending upon services offered.
Entity wise Indicative Reporting Matrix
- Banks : CTR, STR, CBWTR, CCR and NTR
- Insurance Companies : CTR, STR, CCR, CBWTR and NTR
- Department of Posts : CTR, STR, CCR, CBWTR and NTR
- Mutual Funds : STR, CBWTR and NTR
- Card System Operators : CTR, STR and CBWTR
- Casinos : CTR, STR and CBWTR
- Real Estate Agents : CTR, STR, CCR
- Brokerage Firms : STR, NTR
- Money Transfer Service Schemes (MTSS): CTR and STR
- NBFCs / Other Financial Institutions : CTR and STR
- Property Registrars : PTR, STR,
- Exchange Houses : STR
- Depositories : STR
- Payment Aggregators / Gateways : STR
- Dealers in Precious Metals & Stones : STR
- Virtual Digital Asset Service Providers : STR
In summary
Suspicious Transaction Report overrides. Cash Transaction Report even if amount is small, A suspicious transaction report must be filed if suspicious. Failure to report can attract penalties under Prevention of Money-Laundering Act, 2002. All reports must be filed by the principal officer. Robust anti-money laundering systems and internal controls are mandatory
A suspicious transaction report is judgment‑based, not threshold‑based. Multiple small cash transactions can still trigger a cash transaction report if aggregated. No tipping off: The client must not be informed about the suspicious transaction report filing. And reporting is done electronically on the Financial Intelligence Unit India (FIU IND) portal by the Principal Officer. FIU‑IND reporting is mandatory, technology‑driven and risk‑based FINGate 2.0 is the single national reporting gateway, STR has no monetary threshold, Multiple reporting obligations may arise from a single transaction, Non‑compliance attracts PMLA penal consequences
Helpdesk – FINGate / FINNet is email: helpdesk-re@fiuindia.gov.in & phone: 011‑23463691 / 011‑23463692 / 011‑23463693
