Reporting Entities Under PMLA: Which Businesses Are Covered Beyond Banks
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
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.