The Enforcement Directorate was originally set up on 1 May 1956 as the 'Enforcement Unit,' within which department?

Department of Economic Affairs. It began within the Department of Economic Affairs, and moved to the Department of Revenue only in 1960. Read more: Polity0204 — Enforcement Directorate.

The ED typically cannot register a money-laundering case on its own. What does it usually need first?

A predicate offence registered by another agency. An ECIR is usually opened only after a predicate offence, such as one filed by the police or CBI, points to a money trail. Read more: Polity0204 — Enforcement Directorate.

The ED has enforced the Prevention of Money Laundering Act (PMLA) since which date?

1 July 2005. PMLA, enacted in 2002, actually came into force and into ED's hands on 1 July 2005. Read more: Polity0204 — Enforcement Directorate.

The Supreme Court's 2024 ruling narrowed one specific ED power under PMLA. What did it restrict?

Arresting an accused after a Special Court has taken cognizance of the case. The 2024 ruling held the ED cannot arrest an accused once a Special Court has already taken cognizance of the complaint. Read more: Polity0204 — Enforcement Directorate.

In FY 2025-26, the ED attached a record amount in assets under PMLA even as arrests fell 27%. What was the attached figure?

₹81,422 crore. The ED attached a record ₹81,422 crore in FY 2025-26, its highest yet, even as arrests dropped to 156 from 214. Read more: Polity0204 — Enforcement Directorate.

With reference to the Government of India, consider the following information: I. Directorate of Enforcement (enforces the Fugitive Economic Offenders Act, 2018) works under Internal Security Division-I, Ministry of Home Affairs. II. Directorate of Revenue Intelligence (enforces the Customs Act, 1962) works under the Department of Revenue, Ministry of Finance. III. Directorate General of Systems and Data Management (carries out big data analytics to assist tax officers) works under the Department of Revenue, Ministry of Finance. In how many of the above rows is the information correctly matched? (UPSC CSP 2025, GS Paper I)

Only two. The correct answer is Only two. Rows II and III are correct. Row I is wrong: the Directorate of Enforcement actually works under the Department of Revenue, Ministry of Finance, not the Ministry of Home Affairs. Read more: Polity0204 — Enforcement Directorate: Following the Money Trail.

Enforcement Directorate: Following the Money Trail

The Enforcement Directorate cannot start most money-laundering cases on its own. It usually needs someone else’s crime first. Another agency files an offence, called a predicate offence. That opens the door for the ED. This lesson follows the ED from 1956 to today. It covers its laws, its powers, its limits and its latest numbers.

The Enforcement Directorate: key dates.

1 May 1956 Enforcement Unit set up to police foreign exchange rules.

1 Jul 2005 ED starts enforcing the PMLA.

Sep 2023 Supreme Court ends Director Mishra’s extended term.

FY 2025-26 Record ₹81,422 crore attached.

Predicate offence: The original crime that produces the money to be laundered.

ECIR: Enforcement Case Information Report.

PMLA: Prevention of Money Laundering Act, 2002.

Attachment: Freezing property until a court decides.

Contents

Chapter 1: Set Up in 1956
Chapter 2: Three Laws, One Rule
Chapter 3: Courts and Directors
Chapter 4: A Few Trials, Many Cases
Chapter 5: Not the CBI, Not FIU-IND
Chapter 6: In the News, FY 2025-26
Previous Year Questions

1Chapter 1: Set Up in 1956

Must Know

From unit to directorate

On 1 May 1956, the “Enforcement Unit” was set up in the Department of Economic Affairs.
Its job was to police foreign exchange violations.
It was renamed the Enforcement Directorate in 1957.
Since 1960 it has worked under the Department of Revenue, Ministry of Finance.

Headquarters

The headquarters is Pravartan Bhawan, New Delhi.
There are five regional offices: Mumbai, Chennai, Chandigarh, Kolkata and Delhi.
A wider network of zonal and sub-zonal offices sits below them.

Staff

ED officers come on deputation from the IRS, IPS and IAS.
It has no separate recruitment cadre of its own.

Remember: ED: Department of Revenue, Finance Ministry, since 1960. No cadre of its own.

2Chapter 2: Three Laws, One Rule

Must Know

The three laws

FEMA, 1999: foreign exchange violations. Enforced since 1 June 2000.
PMLA, 2002: money laundering. Enforced since 1 July 2005.
FEOA, 2018: fugitive economic offenders. Enforced since 21 April 2018.

It needs someone else’s crime first

The ED does not usually act on its own.
It registers an ECIR after a predicate offence points to a money trail.
That offence is usually a case filed by the police or the CBI.
The predicate-offence rule is central to the whole idea of money laundering.
Read more: Money Laundering: Concepts and the Black Economy.

Powers under the PMLA

It can provisionally attach property.
It can arrest suspects.
It can file prosecution complaints before dedicated Special Courts.

Remember: No predicate offence, usually no ED case.

True or False: The ED can usually open a money-laundering case with no other offence registered.

3Chapter 3: Courts and Directors

Good to Know

Two Supreme Court rulings

In 2022, Vijay Madanlal Choudhary upheld most of the ED’s PMLA powers.
These included arrest and attachment.
In 2024, Tarsem Lal v. Directorate of Enforcement narrowed this.
The ED cannot arrest an accused after a Special Court has taken cognizance of the case.
It must then apply to the court for custody, like any other prosecutor.
The Court treated custody as a tool for investigation, not punishment for an undertrial.
Read more: The Supreme Court.

A Director whose term outlasted the rules

Sanjay Kumar Mishra held the post from November 2018, through four extensions.
In September 2023 the Supreme Court ended his tenure.
It held a fourth extension was illegal.
Rahul Navin has been Director since August 2024.

Notable cases

The PNB scam (Nirav Modi and Mehul Choksi).
The Vijay Mallya case.
The INX Media case.

True or False: After a Special Court takes cognizance, the ED can still arrest under its own PMLA power.

4Chapter 4: A Few Trials, Many Cases

Good to Know

The conviction puzzle

In government figures, the ED had made 513 arrests under the PMLA.
Only 25 cases had reached a completed trial.
Of these, 24 ended in conviction. That is a 96% rate.
Very few registered cases ever reach trial.
High conviction alongside very few completed trials is an unusual mix.
It reflects slow courts, not weak evidence.

Think it through: Think it through: is a 96% conviction rate good news?

Only 25 trials were completed. The rate looks high because the base is tiny. The bigger story is how slowly PMLA cases move through the courts.

5Chapter 5: Not the CBI, Not FIU-IND

Great to Know

Agencies people mix up

CBI: investigates general corruption and serious crime, under a 1946 police law. The ED handles economic offences under FEMA, PMLA and FEOA.
DRI: a sibling agency in the same Department of Revenue. It enforces the Customs Act, 1962 and handles smuggling.
DGSDM: runs big-data analytics to help tax officers catch evaders.
FIU-IND: analyses financial transaction data and shares intelligence with the ED. It never investigates or prosecutes itself.
SFIO: investigates the company-law fraud. The ED traces where the laundered money went.
Read more: CBI, Directorate of Revenue Intelligence (DRI), FIU-IND and Serious Fraud Investigation Office (SFIO).

Fugitives

The ED is one of several agencies behind a rise in fugitives brought back to India.
Read more: Extradition of Fugitive Criminals to India.

True or False: The FIU-IND shares intelligence with the ED but does not investigate or prosecute cases itself.

6Chapter 6: In the News, FY 2025-26

Current Affairs

A record year for attachments

The ED attached a record ₹81,422 crore in assets under the PMLA.
Arrests fell 27% to 156, down from 214 in FY 2024-25.
(Source: The Federal.)

Raids and refunds

PMLA searches and raids nearly doubled to 2,892.
The ED restored ₹32,678 crore in assets to fraud victims.
That was more than double its own target.
(Source: The Pioneer.)

True or False: ED arrests rose in FY 2025-26 even as attachments hit a record.

7Previous Year Questions

Exam angle: real question on this topic.

UPSC CSP 2025, Q3

Match the Enforcement Directorate, DRI and DGSDM to their real mandates and reporting lines. Three Revenue Department bodies, three jobs. See the question.

Quick Q&A

ED set up? 1 May 1956.
ED works under? Department of Revenue.
PMLA enforced from? 1 July 2005.
Tarsem Lal year? 2024.
Record attachment FY26? ₹81,422 crore.

Answered 0 of 4 checks.