What is meant by 'money laundering'? Mention the provisions of the Prevention of Money Laundering Act, 2002 regarding the obligations of banking companies, financial institutions and intermediaries.

Money Laundering Money laundering is the processing of criminal proceeds to disguise its illegal origin. In the Prevention of Money Laundering Act, 2002, money laundering has been defined as "any process or activity connected with proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property". Provisions of the Prevention of Money Laundering Act, 2002 regarding the obligations of banking companies, financial institutions and intermediaries: Section 12 of the Prevention of Money Laundering Act, 2002 requires every banking company, financial institution and intermediary to maintain a record of all transactions covered as per the nature and value of which may be prescribed, in such manner as to enable it to reconstruct individual transactions; They shall furnish to the Director, Financial Intelligence Unit-India (FIU) within such time as may be prescribed information relating to such transactions, whether attempted or executed, the nature and value of which may be prescribed; They shall verify the identity of its clients in such manner and subject to such conditions as may be prescribed; They shall identify the beneficial owner, if any, of such of its clients, as may be prescribed; They shall maintain record of documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients for a period of five years in case of record and information relating to transactions; and They shall maintain the same for a period of five years after the business relationship between a client and the reporting entity has ended or the account has been closed, whichever is later.