Payments

What AML checks apply to international payments received in India?

Author:: Editorial team, serviceexportguide.com
Verified by:: Editorial team
Published: 28 October 2026
Last modified: 30 October 2026
Reading time: 7 min read

Short answer

Banks and payment system operators in India are reporting entities under the Prevention of Money-laundering Act, 2002 (PMLA).¹ They verify client identity, keep records and report to FIU-IND.¹² For banks, RBI's KYC Directions for commercial banks require risk classification, transaction monitoring and sanctions screening.³ Non-bank payment aggregators must register with FIU-IND.⁴ AD banks credit export proceeds only once satisfied the transaction is genuine.⁵

Applies to	Governed by	Deadline	Penalty	Last verified
Banks, payment system operators and payment aggregators handling export receipts in India¹⁴	PMLA, 2002, sections 11A and 12; RBI KYC Directions for commercial banks, 2025; RBI Master Direction on Payment Aggregators, 15 September 2025¹³⁴	Records kept for five years from the transaction, and identity records five years after the relationship ends¹	Not applicable	28 October 2026

Anti-money laundering (AML) checks are the reason a bank in India sometimes calls to ask what a large credit from a new client in Germany was for, or a payment platform holds a receipt until you upload an invoice. For a freelancer, an agency or an IT company, these checks are routine, but they can delay money if your paperwork does not match what the client's payment says. This guide explains the legal basis, who runs the checks, and what you can prepare.

What is AML and which Indian law requires it?

AML is the set of checks that banks and payment providers run to stop the proceeds of crime moving through the financial system; in India the core law is the Prevention of Money-laundering Act, 2002 (PMLA).¹ Section 3 of the PMLA makes it an offence to be involved in any process or activity connected with the proceeds of crime, including concealing, possessing, acquiring or using them.¹

Reporting entities: the PMLA places duties on "reporting entities", defined as banking companies, financial institutions, intermediaries and persons carrying on a designated business or profession.¹
Financial institution: the definition includes an authorised person and a payment system operator.¹
FIU-IND: the Financial Intelligence Unit-India is the central national agency, under the Ministry of Finance, that receives, processes, analyses and disseminates information on suspicious financial transactions.²

So both your bank and a payment aggregator that collects your export receipts are covered.

Who has to run AML checks on international payments to India?

AML checks on international payments to India are run by reporting entities under the PMLA, which include your bank and payment system operators, and by non-bank payment aggregators registered with FIU-IND.¹⁴

Who	AML duty	Why	Best for
Your bank (AD bank)	Yes	Banking company and reporting entity under the PMLA; credits export proceeds only after satisfying itself the transaction is genuine¹⁵	Exporters paid by wire into their own account
Payment system operator or authorised person	Yes	Included in the PMLA definition of financial institution¹	Exporters using a regulated payment provider
Non-bank payment aggregator	Yes	Must register with FIU-IND and do customer due diligence on each merchant⁴	Exporters collecting through a payment aggregator
Exporter	No reporting duty	The duties fall on institutions, but your documents are what they rely on¹	Preparing invoices and contracts in advance

The client's bank abroad also runs its own checks under its own law.

How can exporters keep AML checks on international payments quick?

Exporters keep AML checks quick by making each payment easy to match to a real invoice from the same client, with consistent names and purpose codes.³⁵

Invoice in your own name: use your own registered name, and ask the client to pay from an account in their name.
Reference the invoice: put the invoice number in the payment reference.
Use a consistent purpose code: choose the right purpose code and keep it consistent.
Warn about large payments: tell your bank or platform in advance about an unusually large payment.
Keep the records: keep the contract, statement of work and delivery records for at least the five-year PMLA retention period, since your bank keeps its records for that long.¹
Answer requests quickly: incomplete KYC is a common reason for a payout on hold.

Each step answers a question the bank would otherwise ask after the money arrives.

What rules and record periods apply to AML checks on export payments?

Under sections 11A and 12 of the PMLA, every reporting entity must verify the identity of its clients and beneficial owners, maintain records of transactions and identity documents, and furnish prescribed information to the Director of FIU-IND.¹ Transaction records are kept for five years from the date of the transaction, and identity records for five years after the account is closed or the relationship ends, whichever is later.¹

For banks, the Reserve Bank of India (Commercial Banks, Know Your Customer) Directions, 2025 turn the PMLA duties into specific steps.³ The steps that most affect export receipts are:³

KYC Directions requirement for banks	What it means for an exporter	Best for
Customers classified as low, medium or high risk, using factors such as nature of business, location and transaction types (para 20)³	Your stated business and expected receipts form your profile	Exporters opening a new account
Software alerts when transactions do not fit the customer's risk categorisation and profile (para 55)³	A sudden large receipt, or one from an unexpected country, can prompt questions	Exporters whose business is growing
Enhanced due diligence for persons from countries that do not, or insufficiently, apply FATF Recommendations (para 61)³	Receipts linked to such countries get more scrutiny	Exporters with clients in higher-risk countries
Screening against sanctions lists as part of customer acceptance (para 17)³	Payments involving listed persons are refused	Anyone onboarding with a bank or platform
Cross-border wire transfers must carry originator and beneficiary information (para 74(1))³	A wire missing your name or account number can be held	Exporters paid by SWIFT wire
Risk categories reviewed at least once in six months (para 41)³	Your profile can change as your business grows	Long-standing customers

Under the RBI Master Direction on Regulation of Payment Aggregator dated 15 September 2025, a payment aggregator must do customer due diligence on each merchant under the KYC Master Direction (the 2016 KYC Master Direction, which the PA Master Direction refers to), run background and antecedent checks, and monitor later transactions to confirm they match the merchant's business profile.⁴ It must also credit merchant funds only to the merchant's own bank account.⁴ On the FEMA side, third-party receipts, where someone other than your client pays, need the AD bank's permission under regulation 8 of the FEMA (Export and Import of Goods and Services) Regulations, 2026.⁵

What happens if a bank files a suspicious transaction report on an export payment?

If a bank files a suspicious transaction report (STR) on an export payment, it goes to FIU-IND confidentially: RBI's KYC Directions for commercial banks require the bank to keep the information it furnishes to FIU-IND confidential.³

Account operations: a bank must not restrict operations in an account merely because an STR has been filed.³
Incomplete due diligence: where a bank cannot complete customer due diligence, it should not open the account and should consider filing an STR.³

Complete, consistent KYC is the best protection against an account never being opened.

Which payment platforms ask for documents on export receipts?

Most payment platforms ask for documents when payment details do not clearly match a genuine export by you to the named client.⁵⁶⁷⁸ Providers are listed in the site's order by estimated cost on published fees, cheapest first, then those without enough published pricing, A to Z.

Provider	What it asks for or does	Best for
Skydo	Says it does not accept payments from 15 countries¹⁰	Local bank transfers from major markets¹¹
Razorpay	Needs an invoice and the buyer's address uploaded before it settles a MoneySaver payment, except for some marketplace payouts⁶	Local transfers from the US, UK and eurozone¹²
Winvesta	Needs an invoice with the purpose code and other mandatory fields for each withdrawal⁷	Local transfers with a published per-payment fee¹³¹⁴
Currenxie	Terms let it hold, reject or return incoming payments at its discretion under its compliance policies⁹	Companies registered outside India¹⁵¹⁶
PingPong	May ask for the invoice or contract when a buyer pays by wire transfer⁸	Collecting marketplace and processor payouts¹⁷¹⁸

See payments from sanctioned countries for the country side.

What are the common mistakes that trigger AML questions on export payments?

The common mistakes that trigger AML questions on export payments are a payer who is not the invoiced client, an amount far above your usual pattern, and missing wire details.³⁵

Payer differs from the client: for example, a translator paid by a new client's parent company, or a marketing agency paid by a client's sister company, needs the AD bank's permission for a third-party receipt.⁵
Unusual amount: for example, a developer receiving a much larger amount than usual can trigger a profile alert.³
Missing wire details: a wire missing your name or account number can be held.³
Slow replies: incomplete answers to document requests keep the payment held.

The record-keeping and reporting duties fall on the institutions, but your documents are what they rely on. For anything involving a sanctioned country or an unusual payer, take advice from your bank and a chartered accountant before accepting the payment.

How did we verify this?

We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.

Frequently asked questions

Who carries out AML checks on an export payment to India?+

Your own bank, any payment aggregator or platform in the chain, and the client's bank abroad all run checks. In India, banks and payment system operators are reporting entities under the PMLA, and non-bank payment aggregators must register with FIU-IND and meet the KYC Master Direction's reporting requirements.¹⁴

What is FIU-IND?+

The Financial Intelligence Unit-India (FIU-IND) is the central national agency, under the Ministry of Finance, that receives, processes, analyses and disseminates information on suspicious financial transactions. Banks and other reporting entities under the PMLA furnish prescribed information to its Director, which is where suspicious transaction reports end up.¹²

Will I be told if my bank files a suspicious transaction report?+

No. RBI's KYC Directions for commercial banks require a bank to keep the information it furnishes to FIU-IND confidential. The same Directions say a bank must not restrict operations in an account merely because a suspicious transaction report was filed, so your account should keep working while the report is with FIU-IND.³

Why does my payment platform ask for an invoice for every payment?+

Platforms use invoices to match each receipt to a genuine export. Razorpay needs an invoice and the buyer's address before settling MoneySaver payments, except some marketplace payouts, and Winvesta needs an invoice with the purpose code and other mandatory fields for each withdrawal to your Indian bank account.⁶⁷

How long do banks keep records of my export payments?+

Under section 12 of the PMLA, reporting entities keep transaction records for five years from the date of the transaction, and identity records for five years after the account is closed or the relationship ends, whichever is later. Keeping your own contracts and delivery records for the same period is sensible.¹

Can someone other than my client pay my export invoice?+

A third-party receipt, where someone other than your client pays, needs your AD bank's permission under regulation 8 of the FEMA (Export and Import of Goods and Services) Regulations, 2026. Payments from a client's parent or sister company are a common reason for questions, so tell the bank before the money arrives.⁵

This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.

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