DECODING MONEY LAUNDERING: A COMPREHENSIVE ANALYSIS OF INDIA’S REGULATORY FRAMEWORK

AUTHOR – BIJAY AGARWAL, STUDENT AT AMITY LAW SCHOOL, AMITY UNIVERSITY, NOIDA

BEST CITATION – BIJAY AGARWAL, DECODING MONEY LAUNDERING: A COMPREHENSIVE ANALYSIS OF INDIA’S REGULATORY FRAMEWORK, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (7) OF 2025, PG. 509-518, APIS – 3920 – 0001 & ISSN – 2583-2344

ABSTRACT

Money laundering poses a significant threat to the integrity of financial systems and national security worldwide, with India facing unique challenges due to its large informal economy, complex financial networks, and emerging digital assets. This research paper provides a comprehensive analysis of India’s anti-money laundering (AML) regulatory framework, tracing its evolution from the enactment of the Prevention of Money Laundering Act (PMLA) in 2002 to recent amendments addressing cryptocurrencies and enhanced compliance requirements. Through qualitative case studies of high-profile scams such as the Punjab National Bank fraud and the 2G spectrum scandal, alongside quantitative data on enforcement outcomes, the study evaluates the effectiveness of India’s legislative and institutional mechanisms. While India has made significant strides in aligning with global standards set by the Financial Action Task Force (FATF), challenges remain in enforcement efficiency, technological adaptation, and inter-agency coordination. The paper concludes with targeted recommendations emphasizing policy reforms, capacity building in digital forensics, and public-private partnerships leveraging fintech innovations. Strengthening these areas is critical for India to modernize its AML framework, effectively counter emerging risks, and enhance cooperation in the global fight against money laundering.

Keywords: Anti-Money Laundering, Financial Intelligence Unit, Blockchain analytics