Section 12A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 12A lets the Director call for records from any reporting entity. The records are those held under section 11A, sub-section (1) of section 12 and sub-section (1) of section 12AA, together with any additional information the Director considers necessary for the purposes of the Act. The reporting entity must furnish the information in the time and manner the Director specifies, and the information is to be kept confidential.
This article reads the section from the consolidated text of the Act consulted (amendments shown up to 1 August 2019). Later amendments, rules and notifications should be checked; nothing after that date is stated here.
The Director may call for from any reporting entity the records referred to in section 11A, section 12(1) and section 12AA(1), and additional information the Director considers necessary for the purposes of the Act. The reporting entity must furnish it within the time and in the manner the Director specifies. Save as another law provides, the information sought is to be kept confidential.
Where section 12A comes from
Section 12A was inserted by Act 2 of 2013, section 10 (w.e.f. 15-2-2013), as the footnote prints. The list of records in sub-section (1) was altered by Act 23 of 2019, section 194 (w.e.f. 1-8-2019): the words "section 11A, sub-section (1) of section 12, sub-section (1) of section 12AA" were substituted for "sub-section (1) of section 12". The earlier wording is history only; the section as it stands in the text consulted carries the longer list.
The section sits in Chapter IV, which deals with the obligations of banking companies, financial institutions and intermediaries. A "reporting entity" is defined in section 2(1)(wa), and the "Director" in section 2(1)(k); see our articles on the reporting entity definitions and on section 1 and the authority terms.
If your entity has received a request under this section and you want the request read against the text, a legal consultation can help you check which records it covers and what has to be furnished.
Sub-section (1): the power to call for records
The Director "may call for from any reporting entity any of the records referred to in" three provisions, and "any additional information as he considers necessary for the purposes of this Act".
| Provision named | Records it covers | Explained in |
|---|---|---|
| Section 11A | Verification of identity of clients and beneficial owner | Sections 11 and 11A |
| Section 12(1) | Transaction records, information on transactions, and identity documents, account files and business correspondence | Section 12 |
| Section 12AA(1) | Steps taken before a specified transaction | Section 12AA |
Three features of the power should be noted.
- Any reporting entity. The power is not limited to a reporting entity under inquiry. The words are "any reporting entity".
- Any of the records. The Director may call for "any of" the listed records, not all of them together.
- Additional information. Beyond the records, the Director may seek "any additional information as he considers necessary for the purposes of this Act". The test is the Director's consideration of necessity for the purposes of the Act, which is the language of the text; the section does not define "necessary" and this article adds nothing to it.
The text consulted does not say that the Director must record reasons for a request under this section, and does not say that a request must be in a particular form. Nor does it set any figure for the time. Where the Act is silent, no step or form should be assumed.
Sub-section (2): the duty to furnish
Every reporting entity "shall furnish to the Director such information as may be required by him under sub-section (1) within such time and in such manner as he may specify".
This differs from the duty in section 12(1)(b), where the time and the nature and value of the transactions are matters that "may be prescribed", that is, set by rules. Under section 12A(2), the time and the manner are those "he may specify", that is, specified by the Director. The text consulted does not say in what form the Director specifies them.
| Section 12(1)(b) | Section 12A(2) | |
|---|---|---|
| Who sets the time | Prescribed by rules | The Director specifies |
| Triggers the duty | The transactions fall within the prescribed description | The Director requires the information under sub-section (1) |
| Subject matter | Information on transactions, attempted or executed | Records referred to in the three provisions and additional information |
Sub-section (3): confidentiality
Save as otherwise provided under any law for the time being in force, every information sought by the Director under sub-section (1) shall be kept confidential. The same qualifier appears in section 12(2). The text does not say who is bound, and this article does not read in any person. The reader should check the current law for any provision that requires or permits disclosure.
What happens if a reporting entity does not comply
Section 12A itself names no consequence. Section 13 deals with inquiry by the Director "with regard to the obligations of the reporting entity, under this Chapter", and with warnings, directions and a monetary penalty of ten thousand rupees to one lakh rupees for each failure; section 12A is in the same Chapter. How section 13 applies to a failure under section 12A is a matter of reading section 13, which is explained in our article on section 13.
An illustration
The names are invented. The Director calls for the identity records of a client, Mr Imran Qureshi, from Silverline Finance Ltd, a reporting entity, under section 12A(1), and also asks for the account statement of his business partner as additional information. The Director specifies a date and the manner of furnishing. Under sub-section (2), the company furnishes the information in that time and manner. Under sub-section (3), the information sought is to be kept confidential unless another law provides otherwise. Whether any particular item falls within "additional information" the Director considers necessary is a question of the Director's request and the text, not something the text of the section decides in advance.
Need help responding to a request for records?
A request under section 12A raises questions about which records are covered, what counts as additional information and how to furnish it. We can go through the request and your records with you under legal consultation.
Key takeaways
- The Director may call for from any reporting entity the records referred to in section 11A, section 12(1) and section 12AA(1).
- The Director may also call for any additional information considered necessary for the purposes of the Act.
- The reporting entity must furnish the information within the time and in the manner the Director specifies.
- Information sought under the section is to be kept confidential, save as otherwise provided under any law for the time being in force.
- The section was inserted by Act 2 of 2013; the list of records was substituted by Act 23 of 2019 (w.e.f. 1-8-2019).
- The section names no penalty of its own; section 13 deals with inquiry and penalty for obligations under the Chapter.
Read next
- Section 12: reporting entity to maintain records
- Section 12AA: enhanced due diligence for specified transactions
- Section 13: powers of Director to impose fine on a reporting entity
- Reporting Entity Obligations Under PMLA: CAs, Banks, NBFCs
Disclaimer: Based on the consolidated text of the Prevention of Money-laundering Act, 2002 published by the Enforcement Directorate, showing amendments up to Act 23 of 2019 (1 August 2019), and on the Department of Revenue consolidated copy of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 listing amendments up to 19 July 2024, as consulted on 2 October 2026. Later amendments, notifications, other rules and regulator directions should be checked. This article is general information, not legal advice; check the official text before acting.