Insolvency, Debt Recovery & PMLA

Reporting Entities Under PMLA: Which Businesses Are Covered Beyond Banks

CA Nikhil Gupta·July 2026· PMLA (Reporting Entity) Rules — 2023 Amendments PMLA / AML

Reviewed by CA Nikhil Gupta · Last reviewed 17 July 2026

PMLA reporting obligations were never limited to banks — but a 2023 amendment specifically pulled certain client-facing activities of chartered accountants, company secretaries and cost accountants into scope, a change that directly affects how many finance professionals in India now need to think about their own compliance obligations, not just their clients'.

The traditional core: financial institutions

The original, foundational category of PMLA reporting entities covers banking companies, financial institutions, and intermediaries — this includes banks, NBFCs, and SEBI-regulated intermediaries such as stockbrokers, mutual funds, portfolio managers, and depository participants.

Designated non-financial businesses and professions

Beyond pure financial institutions, PMLA has progressively extended reporting-entity status to specified non-financial businesses and professions where their activities present money-laundering risk:

Real estate agents — for transactions above specified value thresholds, given real estate's well-documented use as a money-laundering vehicle.
Dealers in precious metals and precious stones — for cash transactions above specified thresholds, for the same underlying reason.
Casino operators.
Virtual Digital Asset (cryptocurrency) service providers — brought within the reporting-entity framework through a 2023 notification, extending AML obligations to crypto exchanges and related VDA service providers operating in India.

The 2023 amendment affecting CAs, CS and CMAs

⚠ This is directly relevant to Finin2min's professional audience: A 2023 notification brought specified activities carried out by practising Chartered Accountants, Company Secretaries, and Cost and Management Accountants, on behalf of a client, within PMLA's reporting-entity framework — specifically covering activities such as (i) buying and selling of immovable property, (ii) managing client money, securities or other assets, (iii) management of bank, savings or securities accounts, (iv) organising contributions for the creation, operation or management of companies, and (v) creation, operation or management of companies, LLPs or trusts, and buying/selling of business entities, when carried out on behalf of a client. This does not cover every routine professional service (ordinary tax filing, audit, and compliance work in the usual course is generally understood to sit outside this specific scope), but professionals whose practice includes these specified client-representative activities should assess their own reporting-entity status directly, not just their clients'.

What being a reporting entity actually requires

A business or professional falling within reporting-entity scope takes on obligations including: KYC verification of clients (including beneficial ownership identification for entity clients), maintenance of records of transactions for a specified retention period, and filing of STRs/CTRs with FIU-IND where the relevant thresholds or suspicion criteria are met — essentially the same core AML compliance architecture that has long applied to banks, now extended to these specific non-financial activities.

Why the scope keeps expanding

India's PMLA reporting-entity framework has been progressively broadened partly in response to FATF (Financial Action Task Force) international standards and mutual evaluation feedback — FATF's global AML/CFT framework specifically identifies designated non-financial businesses and professions (including legal/accounting professionals engaged in specified client activities) as a recognised money-laundering risk category, and India's amendments have moved to align domestic law with this international standard.

What a professional in a newly-covered category should do

A CA, CS, or CMA whose practice includes any of the specified activities should establish (or confirm their firm has established) proper client due diligence procedures, recordkeeping, and an internal process for identifying and escalating potentially suspicious client activity — treating this as a genuine compliance obligation attached to their own practice, not merely an issue that concerns their clients' own PMLA exposure.

Frequently Asked Questions

Does routine tax return filing or statutory audit work bring a CA within PMLA reporting-entity scope? ▼

Ordinary tax compliance, audit, and similar routine professional services in the usual course of practice are generally understood to sit outside the specific 2023-notified activities (company formation/management, managing client funds/accounts, buying/selling business entities on a client's behalf) — but professionals with a mixed practice covering both routine work and any of the specified activities should assess their specific service lines individually rather than assuming blanket exclusion.

Are law firms covered by similar reporting obligations? ▼

The scope of PMLA reporting-entity notifications for legal professionals has been a distinct, separately-evolving area from the CA/CS/CMA notification, and the current position for legal professionals should be checked independently rather than assumed to mirror the accounting-profession notification exactly.

What happens if a reporting entity fails to comply with its PMLA obligations? ▼

Non-compliance by a reporting entity — failure to maintain records, failure to file required reports, or other lapses — can attract penalties under PMLA's reporting-entity compliance framework, enforced through FIU-IND's regulatory oversight of reporting entities, separate from any money-laundering liability that might attach to the entity's own conduct.

Source and review trail

Use the current official instrument, portal or regulator publication before acting.

Primary category: Insolvency, Debt Recovery & PMLA
Official starting point: ibbi.gov.in