A Critical Study On The Role Of Corporate Governance In Preventing Money Laundering And Financial Crimes In India
- IJLLR Journal
- Feb 25
- 2 min read
Sonia CK, LLM, School of Law, Christ (Deemed to be University), Bengaluru
ABSTRACT
This research paper critically analyses how corporate governance can ensure that there is prevention of money laundering and financial crimes in the fast- changing economic environment in India. Although the country has a strong legislative system, such as the Prevention of Money Laundering Act (PMLA), 2002, and the Companies Act, 2013, the country is still experiencing high-profile financial scandals, which point to a serious implementation gap. This research is supposed to examine the complex connection between the anti-money laundering (AML) efficacy and the corporate governance mechanisms. It uses a research methodology of doctrinal analysis of statutory provisions, regulatory framework, judicial pronouncements, and case studies such as the Satyam, PNB-Nirav Modi, and IL&FS scams. The literature review shows that there is a general agreement that governance is theoretically important, but that there is a fundamental lack of integration in practice, marked by inertia in enforcement, regulatory dispersion, and ineffective compliance cultures. The fact is that the shortcomings in the systems of corporate governance directly contribute to financial crimes. The paper answers major research questions related to the effectiveness of the current legislation, the role of the regulatory authorities, and the challenges of the digital breakthrough. The results suggest that these structural vulnerabilities, which include board passivity, auditor complicity, and extensive use of shell entities, have a debilitating effect on the financial integrity of India. The paper wraps up by suggesting a combination of policies, better regulatory cooperation, and greater whistleblower safeguards to address the gap between the governance and the AML sector, and take further steps in protecting India against economic crime.
Keywords: Corporate Governance, Money Laundering, PMLA, SEBI LODR, Financial Crimes, FATF, White-Collar Crime, Related Party Transactions.
