The PML Act will be amended to make it mandatory for these financial intermediaries to report all suspected transactions involving international money flows. The Act imposes obligations on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to the Financial Intelligence Unit-India (FIU-IND). It also provides for attachment, seizure and confiscation of proceeds of crime obtained directly or indirectly from money laundering.

In the past, issues related to money laundering have been cited by the United States of America for not approving branch expansion plans of Indian banks in that country. The war against terror financing has intensified after spate of terror attacks around the world including in India. The amendments will enable the government to meet certain domestic needs and international obligations.

"The Amendment Bill will enable the Government of India to meet certain domestic needs and international obligations," information and broadcasting minister Priyaranjan Dasmunsi told reporters after the Cabinet meeting.