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Friday, Nov 29, 2002

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Money Laundering Bill passed

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NEW DELHI, Nov. 28

PARLIAMENT has approved the long-pending legislation to prevent the offence of money laundering, with the Lok Sabha giving its nod to the technical amendments suggested by the Rajya Sabha.

The passage of the Prevention of Money Laundering Bill (PMLB), which allows for confiscation of property derived from or involved in money laundering, comes just four days after the issue found mention at the G-20 meet.

The Bill was originally passed in December 1999 by the Lok Sabha and sent to the Rajya Sabha. The Upper House approved the Bill in July 2002 with amendments suggested by the Select Committee.

The Bill in its modified form is, however, regarded as a diluted version of the original one. This is because the definition of the offence of money-laundering itself has been watered down.

Co-operative banks, non-banking financial companies, chit funds and housing financial institutions come under its ambit. These entities have been covered now following the Select Committee's view that there is every reasonable ground to assume that the NBFCs and chit funds, which are collecting huge amounts of money from the public, could provide a safe haven to money launderers.

The Bill also makes it mandatory for banking companies, financial institutions and intermediaries to maintain a record of all transactions of a prescribed value and to furnish information whenever sought within a prescribed time period. The committee had suggested a time limit of 10 years for maintaining a record of the transactions.

The minimum threshold limit for certain categories of offences under the Indian Penal Code and other legislations has been fixed at Rs 30 lakh in the Bill.

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