AML/CFT

Meaning & Definition

Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) are collective terms used to describe the laws, procedures and policies that exist to prevent the movement of illegally obtained funds as well as prevent the use of such funding to support terrorist activities. Within an organisation, the AML/CFT controls help to confirm the identity of individuals and companies, supervise the transactions performed by those individuals and companies, and report any suspicious activity to the appropriate authorities.

Important aspects of AML/CFT:

• These services help keep your organisation safe from financial crime and safeguard its reputation.
• These services promote compliance with banking regulations, fintech, NBFCs, and all other regulated sectors.
• These services enable organisations to enhance their customer and employee due diligence processes.
• These services may help avoid heavy fines and legal actions against your organisation.
• These services help to establish and maintain relationships of trust with regulators, partners, and customers.

Legal Compliance / Policy / Regulation (India):

The Indian legal framework for AML/CFT compliance is based on:

• Prevention of Money Laundering Act (PMLA), 2002.
• Regulatory directives and guidelines from the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and other regulators.

This compliance framework primarily targets:

• Banks, Non-Banking Financial Companies (NBFCs), Financial Technology (fintech).
• Insurance companies, as well as designated business and professional sectors.

To assist in AML/CFT compliance, Human Resources (HR) teams conduct background checks, Know Your Customer (KYC) processes and provide professional training. For more info, visit: Payroll Software