Abysmal Conviction Rate Under Prevention Of Money Laundering Act: An Analytical Perspective
- IJLLR Journal
- Dec 17, 2025
- 2 min read
Nidhi Prabha, Institute of Law, Nirma University
ABSTRACT
The Prevention of Money Laundering Act, 2002 was enacted with the objective of combating the concealment and legitimization of illicit proceeds by safeguarding India’s financial system and fulfilling its international obligations under the Financial Action Task Force (FATF) framework. Over the course of human history, money laundering has remained a persistent problem. Traditionally the Hawala system in India has been a common method for transferring money. This helped the intermediaries to facilitate cross-border fund transfer. Money Laundering has been a major problem all over the world and India is not an exception.
Over years, the PMLA has been strengthened through amendments that broadened the definition of “proceeds of crime,” empowers the Enforcement Directorate with the extensive investigative powers and create Special Courts for the expeditious trials. Despite these robust legislative designs, the conviction rate under the PMLA remains alarmingly low, exposing a significant gap between the promise of the law and its actual implementation.
This research examines the systemic reasons behind such poor conviction outcomes. It also highlights this Act’s inherent dependence on the successful prosecution of predicate or “scheduled offences” under Section 2(1)(y), without which the proceedings under Section 3 cannot sustain. It also deals with the study which discusses the challenges of establishing the mens rea and money trail beyond reasonable doubt, the procedural delays under Section 44 of the Act which deals with the evidentiary hurdles linked to it, Section 24 of the Act deals with the Burden of proof and Section 50 of the Act deals with the admissibility of the statements. Furthermore, the research underscores how delays in parallel trials, weak financial forensic capacity and judicial scrutiny of investigative practices further undermine the effectiveness of the law.
Here, the study reveals the consistently low conviction rate under the PMLA which reflects not merely investigative lapses but also structural flaws embedded within the legislation itself. Even the Enforcement Directorate has a lot of authority; its enforcement is weakened by its strong reliance on predicate offences, lengthy procedures and evidentiary problems. Reforms are required to improve financial forensic competence, expedite trials and strike a balance between individual rights protection and efficient enforcement if the PMLA is to fulfill its stated goals of discouraging money laundering and bolstering India’s financial integrity.
Keywords: Conviction rate, Money Laundering, Law, Judiciary, India, Illicit, Income, Investigation, Enforcement Directorate, Predicate offence, Financial Crime.
