Enforcement Directorate: Following the Money Trail

The Enforcement Directorate cannot start most of its own money-laundering cases. It usually needs someone else’s crime first. A predicate offence, filed by another agency, is often what opens the door for the ED to step in.

Following the Money Trail

Polity0204

1 MAY 1956

Enforcement Unit Set Up

Created to police foreign exchange violations under FERA

1 JUL 2005

Starts Enforcing PMLA

Given charge of the newly enforced anti-money-laundering law

SEP 2023

Mishra’s Tenure Ends

Supreme Court rules a fourth extension for the Director illegal

FY 2025-26

Record ₹81,422 Cr Attached

PMLA asset attachments hit an all-time high

The predicate-offence rule: the ED almost never opens a case cold. It usually builds on an offence someone else already registered.

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📑 Contents

1Timeline
2Must Know
3Good to Know
4Current Affairs
5Test Yourself
6Great to Know

Timeline

1 May 1956: The “Enforcement Unit” is set up within the Department of Economic Affairs, to police foreign exchange violations.
1957: It is renamed the Enforcement Directorate (ED).
1960: Administrative control moves to the Department of Revenue, Ministry of Finance, where it remains today.
1 June 2000: The ED begins enforcing the new Foreign Exchange Management Act (FEMA), 1999.
1 July 2005: The ED is given charge of enforcing the Prevention of Money Laundering Act (PMLA), 2002.
21 April 2018: It also takes on the Fugitive Economic Offenders Act (FEOA), 2018.
September 2023: The Supreme Court rules a fourth tenure extension for Director Sanjay Kumar Mishra illegal, ending his term.

Must Know

The Enforcement Directorate (ED) was set up on 1 May 1956, as the “Enforcement Unit” within the Department of Economic Affairs. It was renamed the Enforcement Directorate in 1957.
It functions under the Department of Revenue, Ministry of Finance, a change made in 1960.
It enforces three laws. These are FEMA, 1999 (foreign exchange violations, since 1 June 2000), PMLA, 2002 (money laundering, since 1 July 2005), and FEOA, 2018 (fugitive economic offenders, since 21 April 2018).
The ED does not act on its own. It typically registers an Enforcement Case Information Report (ECIR) after a predicate offence points to a money trail. That predicate offence is usually a case filed by the police or the CBI.
Under PMLA, it can provisionally attach property, arrest suspects, and file prosecution complaints before dedicated Special Courts.
Its officers are drawn on deputation from the IRS, IPS, and IAS. It has no separate recruitment cadre of its own.
Two related Department of Revenue bodies are sometimes confused with the ED. The Directorate of Revenue Intelligence (DRI) enforces the Customs Act, 1962, and the Directorate General of Systems and Data Management (DGSDM) runs big-data analytics to help tax officers catch evaders. See Polity0150 — Directorate of Revenue Intelligence (DRI).

Good to Know

Its headquarters is Pravartan Bhawan, in New Delhi. It also runs five Regional offices (Mumbai, Chennai, Chandigarh, Kolkata, Delhi), plus a wider network of zonal and sub-zonal offices.
The Supreme Court’s 2022 Vijay Madanlal Choudhary judgment upheld most of the ED’s PMLA powers, including its arrest and attachment provisions.
A later 2024 ruling narrowed this. It held the ED cannot arrest an accused after a Special Court has already taken cognizance of the case.
Notable ED cases include the PNB scam (Nirav Modi and Mehul Choksi), the Vijay Mallya case, and the INX Media case.
Director Sanjay Kumar Mishra held the post from November 2018, through four extensions, until the Supreme Court ended his tenure in September 2023. Rahul Navin has served as Director since August 2024.
As of recent government figures, the ED had made 513 arrests under PMLA, but only 25 cases had reached completed trial. Of these, 24 ended in conviction — a 96% rate, even though very few registered cases ever reach trial.

Current Affairs

The ED attached a record ₹81,422 crore in assets under PMLA in FY 2025-26. Arrests fell 27% over the same period, to 156, down from 214 in FY 2024-25. (Source: The Federal)
PMLA searches and raids nearly doubled to 2,892 in FY 2025-26. (Source: The Pioneer)
The ED restored ₹32,678 crore in assets to fraud victims in FY 2025-26 — more than double its own target. (Source: The Pioneer)

Test Yourself

Great to Know

The ED’s need for a predicate offence is central to the whole concept it enforces. See Polity0011 — Money Laundering: Concepts, Process and the Black Economy for how laundering actually works, step by step.
The ED and the CBI are often confused, but their mandates differ. The CBI investigates general corruption and serious crime, under a 1946 police law. The ED investigates economic offences specifically, under FEMA, PMLA, and FEOA. See Polity0186 — CBI.
The ED also has a sibling agency under the same Department of Revenue, the Directorate of Revenue Intelligence (DRI). DRI handles customs and smuggling offences, rather than money laundering.
The ED is also easy to confuse with FIU-IND. FIU-IND analyses financial transaction data and shares intelligence with agencies like the ED. It does not investigate or prosecute cases itself.
A near-zero trial-completion rate, alongside a very high conviction rate among the few cases that do complete trial, is an unusual combination. It reflects how slowly PMLA cases move through the courts, not how weak the ED’s evidence tends to be.
The ED often works alongside the Serious Fraud Investigation Office (SFIO) on the same underlying scam. SFIO investigates the company-law fraud itself; the ED traces where the laundered proceeds went. See Polity0206.
The ED is one of several agencies behind a sharp rise in fugitives brought back to India in recent years. See Extradition of Fugitive Criminals to India for the full picture.