As jewellers come under the regulatory umbrella of the Prevention of Money Laundering Act (PMLA), understanding and identifying suspicious transactions has become critical. Being a Reporting Entity, a jeweller is now legally responsible for detecting and reporting activities that could indicate money laundering or other illicit financial behaviour.
A suspicious transaction is any activity that appears unusual, lacks economic rationale, or doesn’t align with a customer’s known source of income or profile. It doesn’t necessarily have to involve large sums—suspicion is based on behaviour, not just amount.
Failing to identify and report such transactions can expose your business to legal consequences, reputational damage, and regulatory penalties. That’s why every jeweller must know what to look for.
Examples of Suspicious Transactions in Jewellery Business:
• A customer insists on completing a high-value purchase in cash, just below the reporting threshold (e.g., Rs. 9.95 lakh).
• A buyer with no prior history or relationship suddenly makes multiple large purchases within a short span.
• Structuring payments across multiple transactions or individuals to avoid detection (known as “smurfing”).
• A customer purchases expensive jewellery and shows no interest in the product details or pricing.
• Transactions involving third parties with no clear relationship to the actual buyer.
• Customers reluctant to share KYC details or providing inconsistent information.
Suspicious doesn’t mean illegal—but it must be reported to the Financial Intelligence Unit (FIU-IND) through the STR (Suspicious Transaction Report) mechanism.
In today’s compliance-driven environment, identifying and reporting suspicious transactions is not just a regulatory checkbox—it’s a way to protect your business from being misused.