Prevention of money laundering is the legal frame of FEMA designed to regulate foreign exchange markets and transactions in India. PMLA framework combats against money laundering and brings ample opportunities for the financial sector. PMLA Act applies to all financial institutions like banks, including RBI, mutual fund, insurance companies, and their intermediaries. The earlier law FERA has been replaced by FEMA to comply with the framework of the World Trade Organisation. However, disobeying and violating these laws attracts heavy penalties.
