Cash is often used for more expensive transactions and difficult and hence it attracts a large number of people who want to avoid detection from various criminal sources. In this paper we are going to analyse how banks have come up with ways to combat this issue and what steps have been taken to curb this menace. Thus, our main objective is to know the level of compliance with the provisions of the Prevention of Money Laundering Act, 2002 and how these laws have impacted on the financial services sector. This paper is based on the understanding that banks require to implement this section of the Prevention of money laundering act 2002 (PMLA) in order to avoid financial risk that may occur from the criminal activity. The bank will be selected as an example for this paper. According to the RBI had issued a circular which had been meant to protect the interest of depositors. This is because the banking sector was highly affected by economic instabilities such as recession and high inflation rates. However, it is important to note that these depositors were not aware that they themselves were being targeted by criminals. Therefore, through implementing the provisions of PMLA, banks are now able to have awareness of how to deal with such crimes.