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UPSC Notes

Prevention of Money Laundering Act (PMLA), 2002

PYQs

11

Articles

4

Momentum

32

Phase IFoundation

Background

Overview

Essential for understanding India's legal framework against financial crimes, its international commitments (FATF), and the powers of enforcement agencies like ED. Frequently amended and debated.

The Prevention of Money Laundering Act (PMLA), 2002, is a comprehensive legislation enacted by the Indian Parliament to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering. It forms the legal backbone for combating financial crimes and illicit financial flows in India.

Phase IIStatic core

Facts & tables

Key facts

Objective

To combat money laundering, confiscate property derived from money laundering, and deal with related matters.

Enforcement Agency

Enforcement Directorate (ED) under the Department of Revenue, Ministry of Finance.

Predicate Offence

Money laundering is not a standalone crime; it requires a 'predicate offence' (scheduled offence) from which the proceeds of crime are generated.

Key Powers of ED

Provisional attachment of property, search and seizure, arrest, and investigation.

Enactment

Enacted in 2002, came into force in 2005.

Purpose

Defines 'money laundering' and prescribes punishment for it.

Enforcement

Empowers ED to investigate, attach, and confiscate properties linked to money laundering.

Obligations

Mandates reporting obligations for financial institutions to FIU-IND.

Reference table

Static syllabus anchors

TypeReference
Conceptual areaIndian Polity & Governance
Conceptual areaAnti-Corruption Laws
Conceptual areaFinancial Crimes
Conceptual areaConstitutional & Statutory Bodies

Reference table

Institutions & roles

BodyRole
Enforcement Directorate (ED)Implements
Enforcement DirectorateEnforces pmla
Financial Intelligence Unit - India (FIU-IND)Receives reports under pmla
Directorate of Enforcement (ED)Implements
Principal Sessions CourtAdjudicates
Phase IIIExam lens

Prelims angle

Overview

Prelims angle: Statement-based questions

Prelims angle: Conceptual understanding

Quick revision

  • Enacted in 2002 to combat money laundering.
  • Enforced by the Enforcement Directorate (ED).
  • Requires a 'predicate offence' for money laundering charges.
  • ED has powers of arrest, search, seizure, and property attachment.
  • Judicial scrutiny often focuses on due process and evidence standards.

Elimination traps

Constitutional vs statutory — PMLA is a statutory law, not a constitutional provision. ED is a statutory body.

Check if created by Constitution or by Parliament.

High-confidence PYQs

2026Multi-statement analysis, Factual recall

Which of the following statements about a Zero First Information Report (Zero FIR) under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 is/are correct? ...

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With reference to the organisations under the Government of India, consider the following details: | Sl. No. | Organisation | Function | Controlling Union M...

Indian PolityOpen question
2026Factual recall, Institutional roles and functions

Which of the following statements about a Zero First Information Report (Zero FIR) under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 is/are correct? ...

Indian PolityOpen question

With reference to the organisations under the Government of India, consider the following details: | Sl. No. | Organisation | Function | Controlling Union M...

Indian PolityOpen question
2025Multi-statement analysis, Factual recall

With reference to the Government of India, consider the following information: | Organization | Some of its Functions | It Works Under | |--...

Indian PolityOpen question

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹4,800...

EconomyOpen question
2025Multi-statement analysis, Institutional roles and functions

With reference to the Government of India, consider the following information: | Organization | Some of its Functions | It Works Under | |--...

Indian PolityOpen question

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹4,800...

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2024Factual recall, Institutional roles and functions

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Indian PolityOpen question
2022Statement-based questions, Institutional roles and functions

With reference to India, consider the following statements: 1. Government law officers and legal firms are recognised as advocates, but corporate lawyers an...

Indian PolityOpen question
2021Statement-based questions, Conceptual understanding

With reference to Indian Judiciary, consider the following statements: 1. Any retired judge of the Supreme Court of India can be called back to sit and act ...

Indian PolityOpen question

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EconomyOpen question
2021Statement-based questions, Factual recall

With reference to Indian Judiciary, consider the following statements: 1. Any retired judge of the Supreme Court of India can be called back to sit and act ...

Indian PolityOpen question

Consider the following statements: 1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Co...

EconomyOpen question
2019Multi-statement analysis, Factual recall

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Science & TechnologyOpen question
2018Multi-statement analysis, Institutional roles and functions

How is the National Green Tribunal (NGT) different from the Central Pollution Control Board (CPCB)? 1. The NGT has been established by an Act whereas the CPC...

Environment & EcologyOpen question

Consider the following statements 1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954. 2. The Food Safety and ...

Indian PolityOpen question
2018Multi-statement analysis, Institutional roles and functions

How is the National Green Tribunal (NGT) different from the Central Pollution Control Board (CPCB)? 1. The NGT has been established by an Act whereas the CPC...

Environment & EcologyOpen question

Consider the following statements 1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954. 2. The Food Safety and ...

Indian PolityOpen question

Topic timeline

Indian Polity & GovernanceAnti-Corruption LawsFinancial CrimesConstitutional & Statutory Bodies
Prelims 2018· Multi-statement analysis, Institutional roles and functions

How is the National Green Tribunal (NGT) different from the Central Pollution Control Board (CPCB)? 1. The NGT has been established by an Act whereas the CPC...

Open question

Consider the following statements 1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954. 2. The Food Safety and ...

Open question
Prelims 2018· Multi-statement analysis, Institutional roles and functions

How is the National Green Tribunal (NGT) different from the Central Pollution Control Board (CPCB)? 1. The NGT has been established by an Act whereas the CPC...

Open question

Consider the following statements 1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954. 2. The Food Safety and ...

Open question
Prelims 2019· Multi-statement analysis, Factual recall

Consider the following statements : 1. According to the Indian Patents Act, a biological process to create a seed can be patented in India. 2. In India, the...

Open question
Prelims 2021· Statement-based questions, Conceptual understanding

With reference to Indian Judiciary, consider the following statements: 1. Any retired judge of the Supreme Court of India can be called back to sit and act ...

Open question

Consider the following statements: 1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Co...

Open question
Prelims 2021· Statement-based questions, Factual recall

With reference to Indian Judiciary, consider the following statements: 1. Any retired judge of the Supreme Court of India can be called back to sit and act ...

Open question

Consider the following statements: 1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Co...

Open question
Prelims 2022· Statement-based questions, Institutional roles and functions

With reference to India, consider the following statements: 1. Government law officers and legal firms are recognised as advocates, but corporate lawyers an...

Open question
Prelims 2024· Factual recall, Institutional roles and functions

The North Eastern Council (NEC) was established by the North Eastern Council Act, 1971. Subsequent to the amendment of NEC Act in 2002, the Council comprises...

Open question
Prelims 2025· Multi-statement analysis, Factual recall

With reference to the Government of India, consider the following information: | Organization | Some of its Functions | It Works Under | |--...

Open question

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹4,800...

Open question
Prelims 2025· Multi-statement analysis, Institutional roles and functions

With reference to the Government of India, consider the following information: | Organization | Some of its Functions | It Works Under | |--...

Open question

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹4,800...

Open question
Prelims 2026· Multi-statement analysis, Factual recall

Which of the following statements about a Zero First Information Report (Zero FIR) under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 is/are correct? ...

Open question

With reference to the organisations under the Government of India, consider the following details: | Sl. No. | Organisation | Function | Controlling Union M...

Open question
Prelims 2026· Factual recall, Institutional roles and functions

Which of the following statements about a Zero First Information Report (Zero FIR) under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 is/are correct? ...

Open question

With reference to the organisations under the Government of India, consider the following details: | Sl. No. | Organisation | Function | Controlling Union M...

Open question

‘Gross abuse of process of law’: HC quashes Delhi Police, ED cases against NewsClick

11 Jun 2026 · PMLA, 2002, empowers the ED to investigate and prosecute money laundering cases, requiring a predicate offence for its application. Recent judicial pronouncements have clarified its scope and the powers of the ED.

Read article

ED files protest petition against DVAC’s attempt to close ₹27.90 crore bribery case against former Minister Vaithilingam

12 Jun 2026 · PMLA empowers the ED to combat money laundering by investigating scheduled offenses, attaching proceeds of crime, and prosecuting offenders, playing a vital role in India's financial integrity and anti-corruption efforts.

Read article

ED attaches 4 hotels, 2 flats in DA probe against ex-IPS officer from Assam

27 Jun 2026 · PMLA, 2002, is India's primary law to combat money laundering, enabling the ED to investigate, attach, and confiscate laundered assets and imposing reporting duties on financial entities.

Read article

DVAC launches probe into the alleged sand mining scam during the DMK government

06 Oct 2026 · PMLA is India's primary law against money laundering, enabling the confiscation of illicit assets and empowering the ED to investigate financial crimes.

Read article

Related topics

Current topic

Prevention of Money Laundering Act (PMLA), 2002

Often confused with

Judicial Review of Executive/Policy Decisions

Open notesOften confused with

Financial Action Task Force (FATF)

Open notesOften confused with

Enforcement Directorate (ED)

Open notesOften confused with

Inter-Agency Coordination in Anti-Corruption Investigations

Open notes
Often confused with

Money Laundering

Coming soon

Practice writing on this topic

UPSC has asked 11 linked questions on Prevention of Money Laundering Act (PMLA), 2002 in Mains. Write an answer to one — and get it evaluated.

See Mains PYQsEvaluate an answer

UPSC Prelims PYQs on Prevention of Money Laundering Act (PMLA), 2002

Practice official previous year questions asked by UPSC related to this concept.

With reference to Indian Judiciary, consider the following statements: 1. Any retired judge of the Supreme Court of India can be called back to sit and act ...

2021·Indian Polity
Solve

How is the National Green Tribunal (NGT) different from the Central Pollution Control Board (CPCB)? 1. The NGT has been established by an Act whereas the CPC...

2018·Environment & Ecology
Solve

Which of the following statements about a Zero First Information Report (Zero FIR) under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 is/are correct? ...

2026·Indian Polity
Solve

Consider the following statements : 1. According to the Indian Patents Act, a biological process to create a seed can be patented in India. 2. In India, the...

2019·Science & Technology
Solve

Consider the following statements 1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954. 2. The Food Safety and ...

2018·Indian Polity
Solve

With reference to the Government of India, consider the following information: | Organization | Some of its Functions | It Works Under | |--...

2025·Indian Polity
Solve

With reference to the organisations under the Government of India, consider the following details: | Sl. No. | Organisation | Function | Controlling Union M...

2026·Indian Polity
Solve

The North Eastern Council (NEC) was established by the North Eastern Council Act, 1971. Subsequent to the amendment of NEC Act in 2002, the Council comprises...

2024·Indian Polity
Solve

Consider the following statements: 1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Co...

2021·Economy
Solve

With reference to India, consider the following statements: 1. Government law officers and legal firms are recognised as advocates, but corporate lawyers an...

2022·Indian Polity
Solve

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹4,800...

2025·Economy
Solve

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