In the abbreviation PMLA, which stands for \"Prevention of Money Laundering Act\", what does the letter \"L\" represent?

Introduction / Context:
This question asks about a key piece of financial and legal legislation in India: the Prevention of Money Laundering Act, commonly abbreviated as PMLA. Abbreviations of laws and schemes frequently appear in banking, legal, and general awareness sections of competitive exams. Here you must correctly identify what the letter “L” stands for in PMLA.

Given Data / Assumptions:

• PMLA is a law related to financial crimes in India.
• The full form is Prevention of Money Laundering Act.
• We are specifically asked about the meaning of the letter “L”.
• Options include Laundering, Lending, Limit and Leverage.

Concept / Approach:
PMLA is aimed at preventing and controlling money laundering, which involves processing illegal funds to make them appear legitimate. Therefore, “L” in PMLA clearly stands for “Laundering”. The approach is simply to recall or reconstruct the full name of the Act and focus on the word starting with “L” within that name. Since none of the other options appears in the official expansion of PMLA, they can be eliminated.

Step-by-Step Solution:
Step 1: Recall the full form of PMLA: Prevention of Money Laundering Act.Step 2: Identify each word and its initial: P for Prevention, M for Money, L for Laundering, A for Act.Step 3: The question specifically asks what “L” stands for, which is the word Laundering.Step 4: Compare with options: Laundering, Lending, Limit, Leverage.Step 5: Only “Laundering” matches the full form of the Act.Step 6: Therefore, the correct answer is Laundering.

Verification / Alternative check:
Any authoritative source on Indian banking law or anti money laundering regulations, such as RBI guidelines or government notifications, states the full name as Prevention of Money Laundering Act. The word “Laundering” is central to the law's purpose, which is to stop criminals from disguising the origins of illegal money. None of the other words like Lending, Limit or Leverage describes the nature of the offence targeted by this Act, confirming that “Laundering” is correct.

Why Other Options Are Wrong:
Lending: This term relates to giving loans and is not the focus of PMLA.

Limit: Refers to boundaries or caps, not directly linked to the Act's primary purpose.

Leverage: A financial term related to using borrowed funds, again unrelated to the specific offence of money laundering.

Since the law is clearly about money laundering, these alternatives do not fit the official expansion.

Common Pitfalls:
Some candidates may confuse PMLA with other financial abbreviations that do involve lending or limits, especially when they are under time pressure. Another pitfall is not remembering full forms accurately and guessing based only on what sounds familiar. A good strategy is to frequently review important laws and their full forms, especially those related to anti corruption, tax, and financial regulation.

Final Answer:
In PMLA, the letter “L” stands for Laundering.