White-collar and financial crime in India is addressed through a cluster of specific statutes -- the Prevention of Money Laundering Act, 2002 (enforced by the Enforcement Directorate), the Prevention of Corruption Act, 1988, and Section 447 of the Companies Act, 2013 for corporate fraud (investigated by the Serious Fraud Investigation Office) -- alongside general Bharatiya Nyaya Sanhita offences like cheating and criminal breach of trust.
Money laundering -- PMLA, 2002
The Prevention of Money Laundering Act, 2002 (PMLA) criminalizes projecting or claiming proceeds of crime
as untainted property, and is enforced by the Enforcement Directorate (ED), which has powers of attachment,
search and seizure, and arrest under the Act. PMLA Rules have been periodically amended to widen the
definition of “reporting entity” -- entities required to maintain records and report suspicious
transactions -- to cover certain virtual digital asset (cryptocurrency) service providers, an area that
continues to evolve and should be checked for the current scope if it is directly relevant to a specific
matter, such as NRI crypto remittances.
Corruption -- Prevention of Corruption Act, 1988
The Prevention of Corruption Act, 1988, as amended by the Prevention of Corruption (Amendment) Act, 2018,
criminalizes bribery of public servants. The 2018 amendment added Section 8, which makes the act of giving a
bribe to a public servant a distinct offence in its own right (not merely abetment of the public servant’s
offence), and Section 17A, which requires prior government approval before investigating a public servant for
an alleged offence relating to a recommendation or decision made in the discharge of official functions.
Corporate fraud -- Section 447, Companies Act
Section 447 of the Companies Act, 2013 defines “fraud” broadly -- covering any act, omission, or
concealment by a person, or with their connivance, intended to deceive, gain undue advantage, or injure the
interests of a company, its shareholders, or creditors -- and prescribes imprisonment (from six months up to
ten years depending on whether the public interest is involved) along with a fine of up to three times the
amount involved in the fraud. Serious corporate fraud cases are investigated by the Serious Fraud Investigation
Office (SFIO) under Sections 211-212 of the Companies Act. The BNS separately supplements these statutes
through general offences like forgery (Section 336), cheating (Section 318), and criminal breach of trust
(Section 316), and introduces a distinct offence of organized crime, a category not present under the old
IPC.
What is the difference between the Enforcement Directorate and the Serious Fraud Investigation Office?
The Enforcement Directorate (ED) primarily investigates offences under the Prevention of Money Laundering
Act, 2002 and FEMA. The Serious Fraud Investigation Office (SFIO) investigates corporate fraud specifically
under the Companies Act, 2013 (Section 447 and related provisions) -- the two agencies have different
statutory mandates, though a single set of facts can sometimes attract scrutiny from both.
Does giving a bribe carry criminal liability in India, or only accepting one?
Both -- since the Prevention of Corruption (Amendment) Act, 2018 added Section 8 to the Prevention of
Corruption Act, 1988, giving a bribe to a public servant is a distinct criminal offence in its own right, not
merely a form of abetting the public servant’s offence of accepting it.
Is cryptocurrency activity covered under India’s money laundering law?
PMLA Rules have been amended to bring certain virtual digital asset service providers within the definition
of “reporting entity,” subjecting them to record-keeping and suspicious-transaction-reporting
obligations -- but the exact current scope moves quickly in this area, so anyone with a specific crypto-related
question should verify the current PMLA Rules rather than rely on a general statement.
