Policy / Guidelines on Know Your Customer (KYC) Norms/AntiMoney Laundering (AML) Measures/Combating of Financing of
Terrorism (CFT) / Obligations of banks under PMLA, 2002
(2014-15)
ALLAHABAD BANK
HEAD OFFICE, AML & KYC CELL
Consolidated guidelines on KYC norms and AML measures
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INDEX
Paragraph
Particulars
Page No.
Chapter -1 Introduction
1.1
Definition of Customer
7
1.2
Definition of Transactions
7
1.3
General Guidelines
8
1.4
Some Important Guidelines
8
a) Customer identification procedure& KYC updation
8
b) Verification of genuineness of PAN
9
c) KYC for sale of Third Party product
9
d) Risk Categorization of accounts
9
e) Monitoring & Reporting of Transactions
9
f)
10
Issuing of DD/BC for Rs.50,000 and above
g) Structuring of transactions with value just below threshold limits
10
h) Transactions through NRE/NRO Accounts
10
i)
Acceptance of cash deposits
10
j)
Management Overview & Compliance Culture
10
k) Internal Audit & Concurrent Audits
1.5
10
KYC Policy
11
Chapter - 2 Customer Acceptance Policy
2.1
Customer Acceptance Policy
12
2.2
Customer Profile
13
2.3
Risk Cartegorisation
13
2.4
(i) Level-I (Low Risk) Customers
13
(ii) Level-I (Medium Risk) Customers
15
(iii) Level-I (High Risk) Customers
15
Guidelines
16
Chapter - 3 Customer Identification Procedure
3.1
Procedure to be adopted in Customer identification
17
a) Introduction to customer identification procedure
17
b) Seeking mandatory information
17
c) Customer identification requirements
17
d) Beneficial Owners
18
e) Unique Customer Identification Code (UCIC)
19
f)
19
Customer Due Diligence (CDD) in case of suspicious transactions
g) KYC of close relatives viz. wife, son, daughter & parents
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19
Paragraph
3.2
Particulars
h) Shifting of bank accounts to another centre – Proof of address
20
i)
Periodical updation of customer identification data
20
j)
Officially valid document for Proof of Identity
22
Customer Identification Requirements – Indicative Guidelines
22
B. Account Opening Form
22
C. Obtaining PAN/GIR or alternatively Form 60 / Form 61
22
D. Other Requirements
24
E. Photograph
25
F. KYC Verification for Self-Help Group (SHG)
26
G. Introduction – Identification through Introductory Reference
26
H. Independent Confirmation of the Address of New Account Holder
27
Simplification of Know Your Customer (KYC) – Procedures for Low
Income Group in Urban and Rural Areas
Customer Identification Requirements in respect of a few typical cases,
especially, legal persons
i)
3.4
22
A. Customer Identification Procedure to be followed for opening of new
account
I.
3.3
Page No.
Walk-in Customer
27
28
28
ii) Salaried Employees
28
iii) Trust/Nominee of Fiduciary Accounts
28
iv) Accounts of companies and firms
29
v) Client accounts opened by professional intermediaries
29
vi) Accounts of Politically Exposed Persons (PEPs) resident outside India
30
vii) Accounts of non-face-to-face customers
30
viii) Accounts of proprietary concerns
30
ix) Procedure to be followed in respect of foreign students
31
Correspondent Banking and Shell Bank
32
A. Correspondent Bank
32
B. Correspondent relationship with a “Shell Bank”
32
C. Due Diligence in Correspondent banking Relationship
33
3.5
Simplified KYC norms for Foreign Portfolio Investors (FPIs)
33
3.6
Operation of bank account and Money Mules
34
3.7
Bank no longer knows the true identity
34
3.8
Small Account
35
3.9
A. Small accounts
35
B. Officially Valid Documents
36
Comprehensive Financial Inclusion
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38
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Paragraph
Particulars
Page No.
Chapter - 4 Monitoring of Transactions
4.1
Monitoring of New Accounts
39
4.2
Operations in New Account
39
4.3
Monitoring Transactions of Suspicious Nature
40
A. Transaction monitoring(Alert generation through AML software)
41
B. Offline Transaction Monitoring
42
C. Ceiling and Monitoring of Cash Transactions / Issuance of Travellers
Cheques / Demand Drafts / Mail Transfers / Telegraphic Transfers
43
D. White-listing of Accounts for AML System
43
4.4
Screening of Cash Withdrawals and Deposits for the Purpose of CTR
44
4.5
Maintenance of Customer’s Profile (Risk Profile)
44
4.6
Terrorist Finance
45
4.7
Freezing of Assets under Section 51A of Unlawful Activities (Prevention)
Act,1967
46
4.8
Adherence to Foreign Contribution Regulation Act (FCRA,1976)
50
4.9
Anti-money Laundering Focus
50
4.10
Wire Transfer
51
(A) Cross-border Wire Transfer
52
(B) Domestic Wire Transfer
52
4.11
Closure of accounts
53
4.12
Preservation and Reporting of Customer Account information
53
1. Maintenance of Records of Transactions
53
2. Information to be preserved
55
3. Maintenance and Preservation of records
55
4. Reporting to Financial Intelligence Unit of India (FIU- IND)
56
a)
Cash Transaction Report (CTR)
57
b)
Counterfeit Currency Report (CCR)
58
c)
Suspicious Transaction Report (STR)
58
d)
Non-Profit Organisation Transaction Report (NTR)
60
e)
Cross-border Wire Transfer Report (CWTR)
60
5. Procedures to be followed for submission of the reports
4.13
Roles and Responsibilities of Bank Officers/Employees
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61
62
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Paragraph
Particulars
Page No.
Chapter - 5 Risk Management
5.1
Duties / Responsibilities of Staff / Officers
63
a) Staff/Officer/Branch Manager vested with authority to open new
accounts
63
b) Branch Manager
63
c) Zonal Office/FGM Office/Head Office
63
d) Nodal Officers
64
e) Concurrent auditors wherever posted
64
f)
64
Inspecting Officer of the Bank
5.2
Management of Customer Risk Profile
64
5.3
Evaluation of KYC Guidelines by Internal Audit and Inspection System
65
5.4
Training to Staff Members
65
5.5
Retention of Records
65
5.6
Customer Education
65
5.7
Introduction of New Technologies – Credit Cards / Debit Cards / Smart Cards
etc.
65
5.8
KYC for the Existing Accounts
66
5.9
Applicability to Branches and Subsidiaries Outside India
66
5.10
Designated Director
66
5.11
Principal Officer
67
5.12
Penalty for Non-Adherence of KYC Norms
67
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Paragraph
Particulars
Page No.
Appendix -I
Indicative list of High/Medium Risk Customers
68
Appendix -II
Customer identification procedure : Features to be verified and documents
that may be obtained from customers
72
Appendix-III
Foreign Portfolio Investors (FPIs) categorized by SEBI
75
Appendix-IV
KYC documents prescribed by RBI for FPIs
76
Appendix-V
Govt. of India Notification No.14/2010/F.No.6/2/2007-ES dated 16.12.2010
on Small Accounts
77
Appendix-VI
Simplified account opening form for opening of accounts under FI
79
Appendix-VII
Alert scenarios indicated by IBA study for detection of suspicious
transactions
81
Appendix-VIII
Offline alert indicators provided by IBA study for detection of suspicious
transactions at branches
87
Appendix-IX
An Indicative list of suspicious activities
89
Appendix-X
Govt. of India, Ministry of Home Affairs Notification No.17015/10/2002-IS-IV
dated 27.08.2009 on Procedure for Implementation of Section 51A of the
Unlawful Activities (Prevention) Act, 1967
92
Appendix-XI
An illustrative Check list covering Money laundering Activities
98
Appendix-XII
Risk Profile
100
Appendix-XIII
List of firms advised by RBI posing as Multi Level Marketing (MLM)
Agencies
102
Appendix-XIV
Companies/Individuals identified/suspected of carrying out MLM activities
108
Appendix-XV
Changes incorporated in the current consolidated guidelines vis-à-vis
guidelines issued in terms of last Policy vide IC No. 12808 dated 16.12.2013
109
Appendix-XVI
List of Circulars on Know Your Customer (KYC) Guidelines issued from July
2013
115
INVENTORY
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Page No. 119
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Policy/Guidelines on Know Your Customer (KYC) Norms/Anti-Money Laundering (AML)
Measures/Combating of Financing of Terrorism (CFT)/Obligations of banks under PMLA, 2002
Chapter - 1
Introduction
The objective of KYC/AML/CFT guidelines is to prevent banks from being used, intentionally or
unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC
procedures also enable banks to know/understand their customers and their financial dealings better
which in turn help them manage their risks prudently.
1.1 Definition of Customer
For the purpose of KYC policy, a ‘Customer’ is defined as :
•
a person or entity that maintains an account and/or has a business relationship with the bank;
•
one on whose behalf the account is maintained (i.e. the beneficial owner)
[‘Beneficial Owner' means the natural person who ultimately owns or controls a client and or
the person on whose behalf a transaction is being conducted, and includes a person who
exercise ultimate effective control over a juridical person]
•
beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers,
Chartered Accountants, Solicitors etc. as permitted under the law, and
•
any person or entity connected with a financial transaction which can pose significant
reputational or other risks to the bank, say, a wire transfer or issue of a high value demand
draft as a single transaction.
1.2 Definition of Transactions
"Transaction" means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof
and includes :(i)
opening of an account;
(ii)
deposits, withdrawal, exchange or transfer of funds in whatever currency, whether in
cash or by cheque, payment order or other instruments or by electronic or other nonphysical means;
(iii)
the use of a safety deposit box or any other form of safe deposit;
(iv)
entering into any fiduciary relationship;
(v)
any payment made or received in whole or in part of any contractual or other legal
obligation;
(vi)
any payment made in respect of playing games of chance for cash or kind including
such activities associated with casino; and
(vii)
establishing or creating a legal person or legal arrangement.'
[RBI Cir DBOD.AML.BC. No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of India Notification
dated 27.08.2013]
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1.3 General guidelines
i)
It should be kept in mind that the information collected from the customer for the purpose of
opening of account is to be treated as confidential and details thereof are not to be divulged
for cross selling or any other like purposes. It should, therefore, be ensured that information
sought from the customer is relevant to the perceived risk, is not intrusive, and is in conformity
with the guidelines issued in this regard. Any other information from the customer should be
sought separately with his/her consent and after opening the account.
ii)
Branches/Offices are advised to ensure that the extant guidelines on Know Your Customer
(KYC) and Anti-Money Laundering (AML) Norms are strictly complied with. Branches/Offices
should also note that officials/employees should not indulge in unnecessary dialogue or
provide unwanted guidance to the customers/intended customers to avoid dispute of any kind
in future.
iii)
It should be ensured that any remittance of funds by way of demand draft, mail/telegraphic
transfer or any other mode and issue of travellers’ cheques for value of Rupees fifty
thousand and above is effected by debit to the customer’s account or against cheques
and not against cash payment.
iv)
With effect from April 1, 2012, bank is debarred from making payment of cheques/drafts/pay
orders/banker’s cheques bearing that date or any subsequent date, if they are presented
beyond the period of three months from the date of such instrument. [RBI Master Cir
DBOD.AML.BC.No.22/14.01.001/2014-15 dated 01.07.2014, Point No.2.1 (iii)]
v)
It should also be ensured that the Provisions of Foreign Contribution (Regulation) Act as
amended from time to time, wherever applicable are strictly adhered to.
1.4 Some important guidelines
Branches are advised to note the following important guidelines for meticulous compliance, in view of
the importance attached for adherence to the KYC policy :a) Customer identification procedure & KYC updation
(i)
The identity of the proposed customer and the beneficial owner should be established
to the satisfaction of the bank before permitting the opening of accounts.
(ii)
The identity of the existing customer also needs to be re-verified while activating
dormant/in-operative accounts.
(iii)
The identification requirements in respect of walk-in-customers should be met and
records to be preserved, wherever applicable.
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b) Verification of Genuineness of Permanent Account Number (PAN)
Branches must not enter Junk / Invalid PAN as this situation is not only fraught with risk with
facilitating the customer with less deduction of tax but also makes the branch Managers
personally responsible.
c) KYC for sale of Third party products
When banks sell third party products as agents, the responsibility for ensuring compliance
with KYC/AML/CFT regulations lies with the third party. However, to mitigate reputational risk
to banks and to enable a holistic view of a customer’s transactions, branches must follow the
appended guidelines :
(i)
Even while selling of third party products as agents, banks should verify the identity
and address of the walk-in-customer.
(ii)
Banks should also maintain transaction details with regard to sale of third party
products and related records.
(iii)
The instructions to make payment by debit to customers’ accounts or against cheques
for remittance of funds/issue of travellers’ cheques, sale of gold/silver/platinum and
the requirement of quoting PAN number for transactions of Rs.50,000/- and above
would also be applicable to sale of third party products by banks as agents to
customers, including walk-in customers.
This instruction would also apply to sale of bank’s own products, payment of dues of
credit cards/sale and reloading of prepaid/travel cards and any other product for Rs.
50,000 and above. [RBI Cir DBOD.AML.BC.No.29/14.01.001/2014-15 dated
12.07.2014, Point No.5)]
d) Risk Categorization of Accounts
Risk categorization in respect of the accounts should be assigned ab initio at the time of
opening of the accounts. Periodical reviews of all accounts regarding its risk categorization
have to be carried out at the prescribed intervals.
e) Monitoring & Reporting of Transactions
(i)
The coverage and intensity of monitoring of transactions should be in commensurate
with the risk categorization of the customers and should meet all the obligations of the
bank under PMLA 2002. Moreover, monitoring of transactions of walk-in customers
should also be subjected to the same rigour as that applicable to the bank’s own
customers for monitoring purposes.
(ii)
It is observed that some branches were using internal accounts as a parking account
for own customers’ / walk-in customers’ cash transactions which involved purchase of
DDs, sale of gold coin etc. for amounts above Rs.50,000. This is strictly prohibited
under extant policy guidelines. In such cases, the transactions effected were not being
captured for the purposes of monitoring and reporting under CTR/STR. It is,
therefore, advised to put a stop to this practice forthwith.
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f)
Issuing of Demand Draft/Banker’s Cheque/Inter Office Instrument for Rs.50,000 and above
Branches must not accept cash for issuing of Demand Drafts(DD) / Banker’s Cheque(BC) /
Inter-Office-Instrument (IOI) of Rs.50,000 and above to customers / walk-in customers.
g) Structuring of transactions with value just below threshold limits
Structured transactions involving multiple cash deposits, DD purchases and sale of gold coins,
with the individual transactions of values just below the threshold limit of Rs.50,000 i.e. in the
range of Rs.40,000 to Rs.49,999 (i.e. less than thresh hold limit of Rs.50,000) to the same
purchaser (favouring same beneficiary) on a single day (aggregate of such drafts issued
exceeds Rs.50,000), indicating accommodating them by splitting of amounts, is against the
spirit of PMLA guidelines.
h) Transactions through NRE/NRO Accounts, Liberised Remittance Scheme and Import of gold
under consignment basis
Branches must ensure strict adherence to the extant FEMA, 1999 regulations on permissible
transactions and upper limits for transactions in NRE & NRO accounts considering the aspect
of repatriation of funds through such accounts. It may also be ensured that the transactions
within the extant ceilings prescribed under Liberised Remittance Scheme are put through only
in case of resident individuals meeting all other conditions specified in the related FED
instructions. It is reiterated that the facility should not be extended to non-individuals. Banks
should not part with advance payments on import of gold under consignment basis.
i)
Acceptance of Cash Deposits
Branches are advised that there is no restriction regarding acceptance of cash deposits from
the customers provided PAN/Form 60/61 is obtained in case of deposits above Rs.50,000 and
CTR reports are filed with FIU-IND for transactions above Rs.10,00,000. However, attempts to
structure transactions below the threshold limits of Rs.50,000 and / or Rs.10,00,000 should
attract the attention of the branches for further necessary action including generation of CTRs
and reporting of such transactions under STRs.
j)
Management Overview and Compliance Culture
Lackadaisical approach in ensuring KYC compliance will be detrimental to the interests of the
banks in the long run, not only in the domestic front, but in the international market as well. A
bank that knowingly / unknowingly participates in transactions intended to be used by
customers to avoid regulatory or financial reporting requirements, evade tax liabilities or
facilitate illegal conduct will be exposing itself to reputational risk.
k) Internal Audit and Concurrent Audits
Bank’s internal audit and compliance functions have an important role in evaluating and
ensuring adherence to the KYC policies and procedures. Branches should take a proactive
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role to make optimum use of the management tools like internal audit and concurrent audit
machinery by ensuring reporting of such cases of non-adherence to the KYC policies.
1.5
KYC Policy
KYC policy incorporates the following four key parameters :a)
b)
c)
d)
Customer Acceptance Policy;
Customer Identification Procedures;
Monitoring of Transactions; and
Risk Management.
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Chapter – 2
Customer Acceptance Policy (CAP)
2.1
In order to establish relationship with the intending customer, comprehensive information
regarding the new customer should be obtained at the initial stage. The prospective customer should
be interviewed by the Branch Manager/ Officer to understand customer’s intended relationship with
the Bank.
Branch heads/officials, in the process of establishing relationship with the customer and/or permitting
opening of the account, should protect the bank from the risks of doing business with any individual
or entity whose identity cannot be determined or who refuses to provide information, or who have
provided information that contains significant inconsistencies which cannot be resolved after due
investigation.
The following guidelines should be taken into account while accepting a customer :
(i)
No account is opened in anonymous or fictitious/benami name. Opening of or keeping any
anonymous account or accounts in fictitious name or account on behalf of other persons
whose identity has not been disclosed or cannot be verified should not be allowed.
(ii)
Parameters of risk perception are clearly defined in terms of the nature of business activity,
location of customer and his clients, mode of payments, volume of turnover, social and
financial status etc. to enable categorisation of customers into low, medium and high risk
Customers requiring very high level of monitoring, e.g. Politically Exposed Persons (PEPs)
may, if considered necessary, should be categorized even higher.
(iii)
Documentation requirements and other information to be collected in respect of different
categories of customers depending on perceived risk and keeping in mind the requirements of
PML Act, 2002 and instructions/guidelines issued from time to time.
(iv)
Not to open an account or close an existing account where it is not possible to verify the
identity and /or obtain documents required as per the risk categorisation due to non
cooperation of the customer or non reliability of the data/information furnished to the bank. It
is, however, necessary to have suitable built in safeguards to avoid harassment of the
customer. For example, decision by the branch to close an account should be taken at Zonal
Office level after giving due notice to the customer explaining the reasons for such a decision.
(v)
Circumstances, in which a customer is permitted to act on behalf of another person/entity,
should be clearly spelt out in conformity with the established law and practice of banking as
there could be occasions when an account is operated by a mandate holder or where an
account is opened by an intermediary in fiduciary capacity.
(vi)
Necessary checks should be conducted before opening a new account so as to ensure that
the identity of the customer does not match with any person with known criminal background
or with banned entities such as individual terrorists or terrorist organisations etc.
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2.2
CUSTOMER PROFILE
A profile for each new customer should be prepared based on risk categorization taking the under
noted points into consideration:
 Identity of the customer
 Social/financial status
 Nature of business activity and location
 Information about his clients’ location of business
 Volume of turnover
 Mode of payment, sources of fund
The nature and extent of due diligence will depend on the risk perceived by the branch. However,
while preparing customer profile care should be taken to seek only such information from the
customer, which is relevant to the risk category and is not intrusive. The customer profile is a
confidential document and details contained therein should not be divulged for cross selling or any
other purposes.
2.3
RISK CATEGORISATION
Customers that are likely to pose a higher than average risk to the bank should be categorised as
medium or high risk depending on customer's background, nature and location of activity, country
of origin, sources of funds and his client profile etc.
Branch should apply enhanced due diligence measures based on the risk assessment, thereby
requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the sources
of funds are not clear. In view of the risks involved in cash intensive businesses, accounts of bullion
dealers (including sub-dealers) & jewellers should also be categorized as 'high risk' requiring
enhanced due diligence. Other examples of customers requiring higher due diligence include (a)
nonresident customers; (b) high net worth individuals; (c) trusts, charities, NGOs and organizations
receiving donations; (d) companies having close family shareholding or beneficial ownership; (e)
firms with 'sleeping partners'; (f) politically exposed persons (PEPs) of foreign origin, customers
who are close relatives of PEPs and accounts of which a PEP is the ultimate beneficial owner; (g)
non-face to face customers and (h) those with dubious reputation as per public information
available etc. However, only NPOs/NGOs promoted by United Nations or its agencies may be
classified as low risk customer.
All customer accounts (both existing and new) should be categorized into three levels as per risk
perceived, viz.
(i) Level - I (low risk),
(ii) Level - II (medium risk),
(iii) Level - III (high risk).
(i)
Level - I (Low risk) customers :
For the purpose of risk categorization, individuals (other than high net worth) and entities whose
identities and sources of wealth can be easily identified and transactions in whose accounts by and
large conforms to the known profile, may be categorized as low risk accounts.
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Illustrative examples of Level - I (low risk) customers may include ;
o
Salaried employees whose salary structures are well defined.
o
Businessmen/ Traders whose activities are well defined and transactions in the accounts
commensurate with the business transactions.
o
People belonging to lower economic strata of society and whose accounts show small
balances and low turn over.
o
Government departments & Government owned companies, regulators and statutory bodies
etc.
In such cases, only the basic requirements of verifying the identity and location (address) of the
customers and introducers are to be met.
Reserve Bank of India observed that of late, there has been an increase in instances of fictitious
offers, where fraudsters are using RBI’s corporate logo/name in their e-mail messages and also
sometimes include the photograph of the Governor to convince the victims of the authenticity of the
purported messages conveying lottery/prize winnings. The fraudsters persuade victims into making
initial payment into a specified bank account towards charges for claiming the prize money. The
victims invariably complain to RBI after they have lost money in such transactions. It was also
observed by RBI from the responses received from banks in this regard that these transactions
generally take place in newly opened accounts of individuals/salary accounts, which are
classified as low risk.
In view of RBI directives, Bank has issued various advisories on website, warning public against
falling prey to fictitious offers/ lottery winnings/ remittance of cheap funds in foreign currency from
abroad by so-called foreign entities/individuals or to Indian residents acting as representatives of
such entities/individuals.
Field functionaries are advised to adopt the following measures as part of the monitoring exercise:
a) Generally the fraudsters open and route transactions through salary/savings accounts
categorized as low risk, by way of small deposits to evade detections. Branch should
monitor operations in these low risk accounts for identifying “atypical transaction”. The
abnormal patterns in the range of transactions, salary accounts, newly opened accounts etc
should be identified. The transactions that are deviating from the threshold limit/outside the
normal transaction region should be probed into and resolved quickly.
b) Branches should closely monitor such accounts in the initial 3-6 months of their opening with
threshold limit carefully calibrated to track transactions not in line with customer profile and
ensure quick turnaround time in resolution of alerts.
c) Branch officials should clarify queries from customers regarding such lottery winnings where
they have been advised to deposit money in specified accounts. Branches should also
display a notice within the premises that such facility is available.
The front office/ operations desks should exercise due caution to deal with accounts where STR is
filed.
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(ii)
Level - II (Medium risk) customers :
Customers those are likely to pose a higher than average risk should be classified as Level - II
(Medium risk). Customers particularly whose sources of fund are not clear and transaction exceeds
the disclosed source of fund.
(iii)
Level - III (High risk) customers :
Customers that are likely to pose a higher than average risk should be categorized as Level - III
(High risk) depending upon customer’s back ground, nature and location of activity, country of
origin, source of funds and his client’s profile.
Illustrative examples of Level - III (High risk) customers may include:
o
In view of the risks involved in cash intensive business, accounts of bullion dealers
(including sub-dealers) & jewelers should be categorized as High Risk.
o
Those who are engaged in certain professions where money laundering possibilities are
high e.g. Antique dealers (individuals and entities), Money Services Bureau (entities – non
employees of these entities) and dealers in arms etc.
o
Non-resident customers.
o
High net worth individuals.
o
Trust, Charities, N.G.Os and organizations receiving donations. However, NPOs/NGOs
promoted by United Nations or its agencies may be classified as low risk customer
o
Companies having close family share holding or beneficial ownership.
o
Firms with ‘sleeping partners’.
o
Funds coming from the list of countries/ centers which are known for money laundering.
o
Non face to face customers, and
o
Those with dubious reputation as per public information available etc.
o
Politically exposed persons (PEPs) of foreign origin, customers who are close relatives of
PEPs and accounts of which a PEP is the ultimate beneficial owner;
(Indicative list of High/Medium risk customers and high/medium risk products & services
enclosed in Appendix - I)
However, NPOs/NGOs promoted by United Nations or its agencies may be classified as Low Risks
customers. [RBI Master Cir DBOD.AML.BC.No.22/14.01.001/2014-15 dated 01.07.2014, Point
No.2.3 (c)]
The above examples are illustrative and not exhaustive.
The Branch manager/ officer of the concerned branch where suspicious activity/ transaction is
noticed should verify the transactions depending upon the nature and circumstances, satisfy
himself whether the activity/ transactions in the account is to be reported as a suspicious nature or
to be treated as a bonafide one. Accordingly, the account should be categorized as Level - I/ Level
- II/ Level - III as deemed fit and be monitored suitably.
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Preparation of customer’s profile should be a continuous exercise. Customer’s profile should be
reviewed periodically. The bank is required to put in place a system of periodical review of risk
categorization of accounts and the need for applying enhanced due diligence measures in case of
higher risk perception on a customer. Such review of risk categorization of customers should be
carried out at a periodicity of not less than once in six months.
A Low-risk customer may be treated as Medium/ High risk if the transactions in the account in
subsequent period does not conform to his declared income/ source of fund and raise suspicion.
Accordingly, the profile of each customer account should be reclassified/ updated as and when
situation arises.
In addition to what has been indicated above, bank should take steps to identify and assess ML/TF
risk for customers, countries and geographical areas as also for products/ services/
transactions/delivery channels. Bank should have policies, controls and procedures, duly approved
by the board, in place to effectively manage and mitigate risk adopting a risk-based approach. As a
corollary, bank would be required to adopt enhanced measures for products, services and
customers with a medium or high risk rating. In this regard, bank may use for guidance in their own
risk assessment, a Report on Parameters for Risk-Based Transaction Monitoring (RBTM) dated
March 30, 2011 which was issued by Indian Banks' Association as a supplement to their guidance
note on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards issued in
July 2009. The IBA guidance also provides an indicative list of high risk customers, products,
services and geographies. [RBI Master Cir DBOD.AML.BC.No.22/14.01.001/2014-15 dated
01.07.2014, Point No.2.3 (d)]
2.4
It is important to bear in mind that the adoption of customer acceptance policy and its
implementation should not become too restrictive and must not result in denial of banking services to
general public, especially to those, who are financially or socially disadvantaged.
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Chapter - 3
Customer Identification Procedure (CIP)
3.1 Procedure to be adopted in Customer Identification
a) Customer Identification Procedure is to be carried out at different stages i.e. while establishing a
banking relationship; carrying out a financial transaction or when there is a doubt about the
authenticity/veracity or the adequacy of the previously obtained customer identification data.
Customer identification means identifying the customer and verifying his/her identity by using
reliable, independent source documents, data or information.
Branches need to obtain sufficient information necessary to establish, to their satisfaction, the
identity of each new customer, whether regular or occasional, and the purpose of the intended
nature of banking relationship. Being satisfied means that the branch must be able to satisfy the
competent authorities that due diligence was observed based on the risk profile of the customer in
compliance with the extant guidelines in place. Such risk based approach is considered
necessary to avoid disproportionate cost to banks and a burdensome regime for the customers.
Besides risk perception, the nature of information/documents required would also depend on the
type of customer (individual, corporate etc.).For customers that are natural persons, sufficient
identification data should be obtained to verify the identity of the customer, his address/location,
and also his recent photograph. For customers that are legal persons or entities, the branch
should (i) verify the legal status of the legal person/entity through proper and relevant documents;
(ii) verify that any person purporting to act on behalf of the legal person/entity is so authorised and
identify and verify the identity of that person; (iii) understand the ownership and control structure
of the customer and determine who are the natural persons who ultimately control the legal
person.
b) Bank has to seek ‘mandatory’ information required for KYC purpose which the customer is
obliged to give while opening an account or during periodic updation. Other ‘optional’ customer
details/additional information, if required may be obtained separately after the account is opened
only with the explicit consent of the customer. The customer has a right to know what is the
information required for KYC that she/he is obliged to give, and what is the additional information
sought by the bank that is optional. Further, it is reiterated that bank should keep in mind that the
information (both ‘mandatory’ - before opening the account as well as ‘optional’- after opening the
account with the explicit consent of the customer) collected from the customer is to be treated as
confidential and details thereof are not to be divulged for cross selling or any other like purposes.
[RBI Master Cir DBOD.AML.BC.No.22/14.01.001/2014-15 dated 01.07.2014, Point No.2.4 (b)]
c) Customer identification requirements in respect of a few typical cases, especially, legal persons
requiring an extra element of caution are given in paragraph 2.5 below for guidance of field
functionaries. Based on practical experience of dealing with such persons/entities, branches/
offices may apply normal bankers’ prudence within established legal framework and practices. If
the bank decides to accept such accounts in terms of the Customer Acceptance Policy, the bank
should take reasonable measures to identify the beneficial owner(s) and verify his/her/their
identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are [Ref:
Government of India Notification dated June 16, 2010 - Rule 9 sub-rule (1A) of PML Rules]. [RBI
Master Cir DBOD.AML.BC.No.22/14.01.001/2014-15 dated 01.07.2014, Point No.2.4 (c)]
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d) Beneficial Owners :
Reference may be made to our Instruction Circular No. 12362/AML & KYC/2012-13/13 dated 21st
March, 2013, wherein the procedure for determination of Beneficial Ownership, as advised
by Government of India has been specified.
Rule 9(1 A) of the Prevention of Money Laundering Rules, 2005 requires that every banking
company, and financial institution, as the case may be, shall identify the beneficial owner and take
all reasonable steps to verify his identity. The term "beneficial owner" has been defined as the
natural person who ultimately owns or controls a client and/or the person on whose behalf the
transaction is being conducted, and includes a person who exercises ultimate effective control
over a juridical person. Government of India has since examined the issue and has specified the
procedure for determination of Beneficial Ownership.
Consequent upon Government of India Notification on “Prevention of Money-Laundering
(Maintenance of Records) Amendment Rules, 2013” (Rules), published in the extraordinary
official gazette vide G.S.R. No. 576 (E) dated August 27, 2013, and subsequent RBI circular
dated 17.07.2014, the amended procedure for Identification of Beneficial Owners is
appended for strict adherence to the field functionaries.
(a)
Where the client is a company, the beneficial owner is the natural person(s), who,
whether acting alone or together, or through one or more juridical person, has a
controlling ownership interest or who exercises control through other means.
Explanation.- For the purpose of this sub-clause :1.
2.
"Controlling ownership interest" means ownership of or entitlement to more
than twenty-five percent of shares or capital or profits of the company
"Control" shall include the right to appoint majority of the directors or to
control the management or policy decisions including by virtue of their
shareholding or management rights or shareholders agreements or voting
agreements
(b)
Where the client is a partnership firm, the beneficial owner is the natural person(s),
who, whether acting alone or together, or through one or more juridical person, has
ownership of/entitlement to majority more than fifteen percent of capital or
profits of the partnership.
(c)
where the client is an unincorporated association or body of individuals, the
beneficial owner is the natural person(s), who, whether acting alone or together, or
through one or more juridical person, has ownership of or entitlement to more than
fifteen percent of the property or capital or profits of such association or body
of individuals.
(d)
Where no natural person is identified under (a) or (b) or (c) above, the beneficial
owner is the relevant natural person who holds the position of senior
managing official;
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(e)
Where the client is a trust, the identification of beneficial owner(s) shall include
identification of the author of the trust, the trustee, the beneficiaries with fifteen
percent or more interest in the trust and any other natural person exercising
ultimate effective control over the trust through a chain of control or ownership.
(f)
Where the client or the owner of the controlling interest is a company listed on a
stock exchange, or is a subsidiary of such a company, it is not necessary to
identify and verify the identity of any shareholder or beneficial owner of such
companies.
[RBI Cir DBOD.AML.BC. No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of
India Notification dated 27.08.2013]
e) The increasing complexity and volume of financial transactions necessitate that customers do not
have multiple identities within a bank, across the banking system and across the financial
system. This can be achieved by introducing a unique identification code for each customer. The
Unique Customer Identification Code (UCIC) will help our bank to identify customers, track the
facilities availed, monitor financial transactions in a holistic manner and enable us to have a
better approach to risk profiling of customers. It would also streamline banking operations for the
customers. Bank has to complete the process of allotting UCIC to all customers including those
entering into a new relationship. Earlier RBI advised us to complete the process of allocation of
UCIC to all existing customers by 31st May 2013. However, in view of difficulties in implementing
UCIC the time has further extended up to December 31, 2014. Bank has been advised to
expedite the procedure and complete the work of allotting UCIC to all the existing individual
customers, within the stipulated timeframe. No further extension in this regard would be
considered. This job should be completed in time under monthly progress reporting to the Board.
Further, it is reiterated that UCIC should be allotted to all customers while entering into new
relationships. [RBI Master Cir DBOD.AML.BC.No.22/14.01.001/2014-15 dated 01.07.2014, Point
No.2.4 (e)]
f) Whenever there is suspicion of money laundering or terrorist financing or when other factors give
rise to a belief that the customer does not, in fact, pose a low risk, full scale customer due
diligence (CDD) should be carried out before opening an account.
When there are suspicions of money laundering or financing of the activities relating to terrorism
or where there are doubts about the adequacy or veracity of previously obtained customer
identification data, due diligence measures should be reviewed including verifying again the
identity of the client and obtaining information on the purpose and intended nature of the
business relationship.
g) It has been observed that some close relatives, e.g. wife, son, daughter and parents, etc.
who live with their husband, father/mother and son, as the case may be, are finding it difficult to
open account as the utility bills required for address verification are not in their name. It is
clarified, that in such cases, Bank can obtain an identity document and a utility bill of the relative
with whom the prospective customer is living along with a declaration from the relative that the
said person (prospective customer) wanting to open an account is a relative and is staying with
him/her. Bank can use any supplementary evidence such as a letter received through post for
further verification of the address. It should be kept in mind the spirit of instructions issued by the
Reserve Bank and avoid undue hardships to individuals who are, otherwise, classified as low risk
customers.
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h) Shifting of bank accounts to another centre - Proof of address :
Norms for furnishing proof of address have been relaxed to allow submitting only one
documentary proof of address (either current or permanent) while opening a bank account or
while undergoing periodic updation. In case the address mentioned as per ‘proof of address’
undergoes a change, fresh proof of address may be submitted to the branch within a period of six
months.
In case the proof of address furnished by the customer is not the local address or address where
the customer is currently residing, the branch may take a declaration of the local address on
which all correspondence will be made by the bank with the customer. No proof is required to be
submitted for such address for correspondence/local address. This address may be verified by
the bank through ‘positive confirmation’ such as acknowledgment of receipt of (i) letter, cheque
books, ATM cards; (ii) telephonic conversation; (iii) visits; etc. In the event of change in this
address due to relocation or any other reason, customers may intimate the new address for
correspondence to the bank within two weeks of such a change.
[RBI Cir
DBOD.AML.BC.No.119/14.01.001/2013-14 dated 09.06.2014]
Branches are advised that KYC once done by one branch of the bank should be valid for
transfer of the account within the bank as long as full KYC has been done for the
concerned account. The customer should be allowed to transfer his account from one branch to
another branch without restrictions. Branches may transfer existing accounts at the transferor
branch to the transferee branch without insisting on fresh proof of address and on the basis of a
self-declaration from the account holder about his/her current address. .
[RBI Cir
DBOD.AML.BC.No.119/14.01.001/2013-14 dated 09.06.2014]
i) Branches should periodically update customer identification data (including photograph/s)
after the account is opened. In the light of practical difficulties/ constraints in obtaining/submitting
fresh KYC documents at frequent intervals as the relative documents submitted earlier specially
by low-risk customers have remained unchanged in most of the accounts, it has been decided to
amend the instructions as under :
(i) Branches/offices would need to continue to carry out on-going due diligence measures
while commencing an account-based relationship. Such measures include identifying and
verifying the customer and beneficial owner on the basis of reliable and independent
information and data or document.
(ii) Full KYC exercise will be required to be done at least every two years for high risk, every
eight years for medium risk and at least every ten years for low risk customers.
(iii) Full KYC may include all measures for confirming identity and address and other
particulars of the customer that the bank may consider reasonable and necessary based
on the risk profile of the customer. [RBI Master
Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.4 J(i)]
(iv) Carry out ongoing due diligence of existing clients in order to ensure that their transactions
are consistent with the bank’s knowledge of the client, his business and risk profile and,
wherever necessary, the source of funds.
(v) Earlier, ‘Positive confirmation’ (obtaining KYC related updates through e-
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mail/letter/telephonic conversation/forms/interviews/visits, etc.), was required to be
completed at least every two years for medium risk and three years for low risk customers.
Now, RBI has reviewed the matter based on feedback received in light of provisions
of the PML Rules. Accordingly, it is advised that while the requirements of client
due diligence measures applied when establishing an account-based relationship,
and on-going due diligence would continue as indicated in paragraph (i), (ii), (iii) &
(iv) above, it has been decided to dispense with the requirement of ‘positive
confirmation’ as noted above. [RBI Cir No. RBI /2014-15/212 DBOD.AML.BC. No.39 /
14.01.001/2014-15 dated 04.09.2014]
(vi) Further, the requirement of applying client due diligence measures to existing clients at an
interval of two/eight/ten years in respect of high/medium/low risk clients respectively,
would
also continue taking into account whether and when client due diligence
measures have previously been undertaken and the adequacy of data obtained.
Physical presence of the clients may, however, not be insisted upon at the time of such
periodic updations. [RBI Cir No. RBI /2014-15/212 DBOD.AML.BC. No.39 /
14.01.001/2014-15 dated 04.09.2014]
(vii) Fresh photographs will be required to be obtained from minor customer on becoming
major.
(viii) The time limits prescribed above would apply from the date of opening of the account/ last
verification of KYC. [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated
01.07.2014 Point No. 2.4 J(iv)]
An indicative list of the nature and type of documents/information that may be relied upon for
customer identification is given in Appendix -II. It is clarified that permanent correct address, as
referred to in Appendix-II, means the address at which a person usually resides and can be
taken as the address as mentioned in a utility bill or any other document accepted by the bank for
verification of the address of the customer.
The indicative list furnished in Appendix - II should not be treated as an exhaustive list and no
section of public should be denied access to banking services.
If the address on the document submitted for identity proof by the prospective customer is same
as that declared by him/her in the account opening form, the document may be accepted as a
valid proof for both identity and address. [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/201314 dated 01.07.2014 Point No. 2.4 (l)]
In view of the Government of India Notification dated 27.08.2013 on amendment of PML
(Maintenance of Records) Rules and subsequent RBI circular dated 17.07.2014, it is been
decided that where a customer, categorized as low risk, expresses inability to complete the
documentation requirements on account of any reason that the bank considers to be genuine,
and where it is essential not to interrupt the normal conduct of business, the bank may complete
the verification of identity within a period of six months from the date of establishment of the
relationship. [RBI Cir DBOD.AML.BC. No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of India
Notification dated 27.08.2013]
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j) Officially Valid Document for Proof of Identity :
Government of India has notified the “Prevention of Money-Laundering (Maintenance of Records)
Amendment Rules, 2013” (Rules) and have published the same in the extraordinary official gazette
vide G.S.R. No. 576 (E) dated August 27, 2013. In terms of the notification, “Officially valid
document” means the Passport, the Driving License, the Permanent Account Number (PAN)
Card, the Voter’s Identity Card issued by Election Commission of India, Job Card issued by
NREGA duly signed by an officer of the State Government, the letter issued by the Unique
Identification Authority of India (UIDAI) containing details of name, address and Aadhaar
number or any document as notified by the Central Government in consultation with the
regulator.
In terms of the above notification, RBI has issued instruction dated 17.07.2013 on the line that
henceforth, only the documents mentioned in the rule or any other document as notified by the
Central Government in consultation with the Regulator would be ‘officially valid documents’.
The discretion given to banks earlier stands withdrawn. [RBI Cir DBOD.AML.BC.
No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of India Notification dated 27.08.2013]
3.2 Customer Identification Requirements – Indicative Guidelines
It would be rather impossible to detect/ prevent a fraudulent transaction if the persons whose true
identity, source of funds, expected transactions and relationship with the Bank are not verified at
entry level and thereafter the profile of the customers are updated.
Some major areas to consider in identification of customers and opening / operating of their accounts
are appended :A.
Customer Identification Procedure to be followed for opening of new account :
No account should normally be opened without a meeting between the bank official and the
customer. Before opening of New Accounts, the prospective customer should be interviewed by the
Branch Manager/ Officer to ascertain the purpose of opening the account, kind of transactions
intended, nature of business activity and its location, address of the customer and his clients, social
and financial status, source of funds etc.
Particular care should be taken when dealing with accounts opened by post or where there is no
face-to-face contact with the customers, so as to ensure that the identity of the customer is verified to
the satisfaction of the Bank.
B.
Account Opening Form :
Branches should obtain appropriate forms and other related papers/ documents from the customers
while opening a new account and follow the laid down procedures as detailed in Branch Instruction
Manual.
C.
Obtaining PAN/GIR or alternatively Form 60 / Form 61
The Manager or Officer of the Branch at the time of opening an account shall ensure that Permanent
Account Number (PAN) or General Index Register Number (GIR) of the customer concerned has
been duly quoted in the relevant documents/ account opening form or alternatively declaration in
Form No.60 or Form No.61 as the case may be is received without fail. Avoid accepting junk PAN
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and insist for valid PAN for applicable transactions.
In this connection, following points are reiterated for meticulous compliance :In terms of HO Instruction Circular No.11954/AML & KYC/2012-13/04 dated 29.06.2012 containing
guidelines on KYC norms, PAN card is one of the documents included in the list of documents for
KYC and is not a mandatory document for identification.
In terms of HO Instruction Circular No.11844 Gen A/Cs & Audit/IT/2012-13/1 dated 12.04.2012, every
holder shall quote PAN in the following cases :
a) A time deposit, exceeding fifty thousand rupees;
b) Opening an account ( not being a time deposit referred to above ) with a banking company to
which the Banking Regulation Act, 1949 applies (in case PAN is not available form 60/61 must
be obtained);
c) Deposit in cash aggregating fifty thousand rupees or more with a banking company to which
the Banking Regulation Act, 1949 applies during any one day;
d) Making an application to a banking company to which the Banking Regulation Act, 1949
applies, for issuance of a Debit Card (incl. prepaid card);
e) Making an application to a banking company to which the Banking Regulation Act, 1949
applies, for issuance of a Credit Card;
f)
A contract of a value exceeding one lakh rupees for sale or purchase of securities.
g) Payment in cash exceeding twenty-five thousand rupees for purchase of foreign currency in
connection with travel to any foreign country.
h) Payment of an amount aggregating fifty thousand rupees or more in a year as life insurance
premium to an insurer as defined in clause (a) of Section 2 of Insurance Act, 1938 (4 of 1938).
i)
Payment to a dealer of an amount of five lacs rupees at any one time or against a bill for an
amount of five lakhs rupees or more for purchase of bullion or jewellery.
j)
Payment of an amount of fifty thousand rupees or more to RBI, for acquiring bond issued by
it.
k) Payment of an amount of fifty thousand rupees or more to a Mutual Fund for purchase of
its units or to a company or an instruction for acquiring bond or debenture issued by it.
In terms of HO Instruction Circular No. 12548/General A/Cs & Audit/2013-14/23 dated 10.07.2013, if
the depositor / deductee does not provide PAN, Tax (TAS) will be deducted @20%.
RBI has noticed that branches are filling Junk PAN / Invalid PAN to facilitate lesser deduction of Tax
and when they remit the tax so deducted to the Income Tax authorities, the same is returned with
remarks “PAN not matching”.
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This situation is not only fraught with risk but also makes the branch Managers personally
responsible.
The matter has since been taken up for verification of all existing PAN already entered with NSDL
database, and also for on-going verification of PAN for the new accounts with NSDL.
In line with the above, CBSPO has since started verification of PAN already with NSDL database,
and reports having details of PAN discrepancies are uploaded regularly in daily report folder of the
branch under file name INVALID_PAN_REPORT.txt.
Branches/offices are, therefore, advised to ensure that corrective measures are initiated immediately
on receipt of such report folder. Zonal Offices are advised to monitor the branches very strictly on
daily basis so that Invalid/Junk/Incorrect PAN do not prevail any more in any of the branches. [HO IC
No. 13084/AML & KYC/2014-2015/04 dated 05.06.2014]
In view of the seriousness of the matter, branches are advised as under :(i) No Junk / Invalid PAN should be entered in the system henceforth and if any Junk PAN is
noticed, concerned official will be held personally responsible.
(ii) On receipt of information from CBS, Branches must issue a letter to all the customers
whose Junk PAN has been deleted immediately on the lines of format provided in our
earlier Instruction Circular No. 12713/AML & KYC/2013-14/10 dated 22.10.2013.
In case of account of a minor the PAN or GIR number of his/her father or mother or guardian as the
case may be should be quoted in the documents pertaining to opening an account.
However, quoting of PAN/GIR No. in account opening forms is not required in respect of:
D.
o
Term Deposits not exceeding Rs.50,000/-
o
Non-Residents
Other Requirements
 The Account Opening Form duly filed in all respects and signed by both the prospective
account holder and the introducer should only be accepted for opening an account. Among
other things, it should be particularly ensured that complete postal address of both the
account holder and the introducer is mentioned in the form.
The form should be thoroughly checked and the opening of new accounts should be
authorised only by the Branch Manager/ Officer-in-Charge permitting the account to be
opened.
The responsibility for ensuring that all the accounts are opened in regular manner devolves
upon Manager/ Dealing Officer. They should ensure that all the new accounts are introduced
properly.
 The Branches should ask their customers to establish their identity (true name, residential and
mailing address). This may be done with the help of certain official documents in original.
The verifying official, at the time of opening the account must scrutinize the documents
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submitted with their original and certify the KYC documents through seal as “Verified from
original” and put his signature, name & PF number below his official signature.
Identification documents that can be easily obtained in any name should not be accepted as
the sole means of identification. In case of doubt, the information furnished by the customer
should also be corroborated from some other sources/ personal verification and bank should
be satisfied in this regard.
 List of the documents that should be obtained from the different types of customers
viz. Individuals, Companies, Partnership Firms, Trust, Unincorporated Association or
Body of Individuals and Proprietorship Firms are detailed in Appendix - II
 The guidelines shall also apply to the branches and majority owned subsidiaries located out
side India, specially, in countries which do not or insufficiently apply the Financial Action Task
Force (FATF) recommendations, to the extent local laws permit. It is clarified that in case
there is a variance in KYC/AML standards prescribed by the Reserve Bank of India and the
host country regulators, branches/overseas subsidiaries of banks are required to adopt the
more stringent regulation of the two.
 For the purpose of identifying and verifying the identity of customers at the time of
commencement of an account-based relationship, reporting entity may rely on a third party;
subject to the conditions that :(a)
the reporting entity immediately obtains necessary information of such client due
diligence carried out by the third party;
(b)
the reporting entity takes adequate available from the third party upon request without
delay;
(c)
the reporting entity is satisfied that such third party is regulated, supervised or
monitored for, and has measures in place for compliance with client due diligence and
record-keeping requirements in line with the requirements and obligations under the
Act;
(d)
the third party is not based in a country or jurisdiction assessed as high risk; and
(e)
the reporting entity is ultimately responsible for client due diligence and undertaking
enhanced due diligence measures, as applicable. steps to satisfy itself that copies of
identification data and other relevant documentation relating to the client due diligence
requirements will be made [RBI Cir DBOD.AML.BC. No.26/14.01.001/ 2013-14
dated 17.07.2014] [Govt. of India Notification dated 27.08.2013]
E.
Photograph
Two recent photographs (not more than of six months old) of the customer must be obtained.
Photographs of the person/ persons authorised to operate the account should also be obtained
invariably. On the face of the photographs, the signature of the respective customer/ authorised
operators should be taken.
Stipulation of obtaining photographs would apply uniformly to both resident and non-resident account
holder and all categories of deposits including Fixed/Recurring/ Cumulative Deposit accounts. Only
Banks, Local Authorities and Government Departments (excluding Public Sector Undertakings and
Quasi- Govt. Bodies) will be exempted from the requirement of photographs.
In case of joint account, photographs of all joint account holders who are authorised to operate the
account should be obtained without exception.
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In case of account to be operated by authorised persons, power of attorney holders, photographs of
both the account holders and authorised persons should be obtained.
In respect of accounts in the names of minors, photograph of the guardian operating the account
should be obtained.
The official, authorising opening of the account should attest photographs of the account holder(s).
Wherever a depositor is desirous of and/or maintaining Current Account, Savings, Fixed Deposits or
other deposit accounts, only one set of photographs need be obtained and separate photographs
should not be obtained for each category of deposit. Proper reference should be recorded in the
applications for different types of deposit accounts.
In case of company accounts, partnership firms’ accounts and trust accounts, photographs of
authorised signatories who will operate the accounts duly attested by the competent authority of the
company / partnership firm / trust should be obtained.
Members of staff / officer may be exempted from affixing photographs. In case of joint account with
their family members who are not staff of the Bank, the photograph of such members should be
obtained. Similarly, in case of any joint account of staff/officer with outsiders (not related to them
and/or not a member of the family) photographs should be obtained from the non-family member of
staff/ officer.
F.
KYC Verification for Self-Help Groups (SHGs)
In order to address the difficulties faced by SHGs in complying with KYC norms while opening
savings bank accounts and credit linking of their accounts, Reserve Bank of India has prescribed
simplified norms for SHGs.
As per RBI instructions, KYC verification of all the members of SHG need not be done while opening
the savings bank account of the SHG and KYC verification of all the office bearers would suffice. As
regards KYC verification at the time of credit linking of SHGs, it is clarified that since KYC would have
already been verified while opening the savings bank account and the account continues to be in
operation and is to be used for credit linkage, no separate KYC verification of the members or office
bearers is necessary.
G.
Introduction - Identification through Introductory Reference
Introduction is not mandatory for opening an account. Since introduction is not necessary for
opening of accounts under PML Act and Rules or Reserve Bank’s extant KYC instructions, branches
should not insist on introduction for opening bank accounts of customers. (IC No.
12361/AML&KYC/2012-13/12 dated 21.03.2013)
However, an existing account holder maintaining a satisfactory account for at least 12 months may
introduce an account preferably by signing the account opening form in the presence of the branch
officials. Implication of introducing an account should be made known to the introducer.
With regard to introduction by staff members, if the depositor is well known to the officer/ staff of the
Branch/Bank, the latter (officer / staff) may introduce the depositors under his/her full signature. It is
advised that staff members should refrain from introducing parties who are not well known to them.
For opening a Current Account, it may be introduced only by an officer of the Bank. For opening other
accounts (excepting Current Account), these may be introduced by any member of staff of the Branch
except sub-staff.
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In case where the Account Opening Forms bear the signatures of Manager / Officials of other
branches/ offices of the Bank for introduction, apart from verifying signatures of such introducers with
the specimen signatures available on record, the branch concerned should obtain written
confirmation of the introduction from the officials of other branches/ offices who introduced the
account.
However, the above examples are illustrative. The Branch manager/ officer of the concerned branch
at the time of opening of an account should follow the laid down procedures as given in Branch
Instruction Manual.
H.
Independent Confirmation of the Address of New Account holder
Independent confirmation of the address of the account holders in all cases should be done through
sending of ‘Letter of Thanks’ to both the account holder as well as to the introducer as per laid down
procedures given in Branch Instruction Manual.
A Register should be maintained for recording the date of sending of letter of thanks to the new
account holder and the introducer. Acknowledgements of the ‘Letter of Thanks’ from account holder
and introducer should also be properly recorded in the Register. Response from the introducer i.e.
confirmation/ contradiction (if any) should also be recorded.
For customers that are legal persons or entities, the branch should take the following steps :(i)
Verify the legal status of the legal person/ entity through proper and relevant documents.
(ii)
Verify that any person purporting to act on behalf of the legal person/ entity is so authorized
and verify the identity of that person.
(iii)
Understand the ownership and control structure of the customer and determine who are the
natural persons who ultimately control the legal person.
I.
Simplification of Know Your Customer (KYC)
Procedures for Low Income Group in Urban and Rural Areas
The KYC Norms for the above group in respect of identity and address is simplified on the following
areas :
The persons who intend to keep balances not exceeding rupees fifty thousand (Rs. 50000/=) in all
their accounts taken together and the total credit in all the accounts taken together is not expected to
exceed rupees one lakh (Rs.1,00,000/=) in a year, and the aggregate of all withdrawals and transfers
in a month does not exceed rupees ten thousand.
In such case a person who wants to open an account is not able to produce documents about his/her
identity and address as per Bank’s requirement, branches may open accounts of those persons
subject to :
a) Introduction from another account holder who has been subjected to full KYC procedures. The
introducer’s account with the branch should be at least six months old and should show
satisfactory transactions. Photograph of the Customer who proposes to open the account and
also his/her address needs to be certified by the introducer.
OR
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b) Any other evidence as to the identity and address of the customer to the satisfaction of the bank.
While opening accounts as described above, the customer should be made aware that if at any point
of time, the balances in all his /her accounts with the bank(taken together) exceeds rupees fifty
thousand (Rs.50,000/=) or total credit in the account exceeds rupees one lakh (Rs.1,00,000/=) in a
year, no further transactions will be permitted until the full KYC procedure is completed. In order to
obviate inconvenience to the customer, the branches must notify the customer when the balance
reaches rupees forty thousand (Rs.40,000/=) or the total credit in a year reaches rupees eighty
thousand (Rs.80,000/=) so that appropriate documents for conducting the verification as per KYC
norms be submitted otherwise the operations in the account will be stopped when the total balance in
all the accounts taken together exceeds rupees fifty thousand ( Rs.50,000/=) or the total credit in the
accounts exceeds rupees one lakh (Rs.1,00,000/=) in a year.
The accounts which have already been opened under relaxed KYC standards in respect of persons
affected by floods to credit the grant received by them from the Government shall also be treated at
par with the accounts opened in terms of the above. However, the maximum balance in such
accounts may be permitted as the amount of grant received from the Government or rupees fifty
thousand (Rs.50,000.00) whichever is more and the initial credit of the grant amount shall not be
counted towards the total credit.
3.3 Customer identification requirements in respect of a few typical cases, especially, legal
persons
Customer identification requirements in respect of a few typical cases, especially, legal persons
requiring an extra element of caution are appended for guidance. In case of accepting such types of
accounts Branches should take reasonable measures to identify the beneficial owner(s) and verify
his/ her/ their identity to the satisfaction of the Branch Manager/ Officer authorising to open the
account.
i) Walk-in Customers
In case of transactions carried out by a non-account based customer, that is a walk-in customer,
where the amount of transaction is equal to or exceeds rupees fifty thousand, whether conducted as
a single transaction or several transactions that appear to be connected, the customer's identity and
address should be verified. However, if there is reason to believe that a customer is
intentionally structuring a transaction into a series of transactions below the threshold of
Rs.50,000/- identity and address of the customer should be verified and filing a suspicious
transaction report (STR) to FIU-IND should also be considered.
NOTE : In terms of Clause (b) (ii) of sub-Rule (1) of Rule 9 of the PML Rules, 2005 banks and
financial institutions are required to verify the identity of the customers for all
international money transfer operations
ii ) Salaried Employees
In case of salaried employees, it is clarified that with a view to containing the risk of fraud,
certificate/letter of identity /address issued only from corporate and other entities of repute should be
relied on and branch should be aware of the competent authority designated by the concerned
employer to issue such certificate/letter. Further, in addition to the certificate/letter issued by the
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employer, at least one of the officially valid documents as provided in the Prevention of Money
Laundering Rules (viz. passport, driving licence, PAN Card, Voter’s Identity card, etc.) or utility bills
for KYC purposes for opening bank accounts of salaried employees of corporate and other entities
should be insisted upon.
iii) Trust/Nominee or Fiduciary Accounts
There exists the possibility that trust/nominee or fiduciary accounts can be used to circumvent the
customer identification procedures. It should be determined whether the customer is acting on behalf
of another person as trustee/nominee or any other intermediary. If so, branches should insist on
receipt of satisfactory evidence of the identity of the intermediaries and of the persons on whose
behalf they are acting, as also obtain details of the nature of the trust or other arrangements in
place. While opening an account for a trust, reasonable precautions to verify the identity of the
trustees and the settlors of trust (including any person settling assets into the trust), grantors,
protectors, beneficiaries and signatories should be taken. Beneficiaries should be identified when
they are defined. In the case of a 'foundation', steps should be taken to verify the founder managers/
directors and the beneficiaries, if defined.
iv) Accounts of companies and firms
Branches should be vigilant against business entities being used by individuals as a ‘front’ for
maintaining accounts with banks. Branches should examine the control structure of the entity,
determine the source of funds and identify the natural persons who have a controlling interest and
who comprise the management should be identified. These requirements may be moderated
according to the risk perception e.g. in the case of a public company it will not be necessary to
identify all the shareholders.
v) Client accounts opened by professional intermediaries
a)
When the branch has knowledge or reason to believe that the client account opened by a
professional intermediary is on behalf of a single client, that client must be identified. There may
be 'pooled' accounts managed by professional intermediaries on behalf of entities like mutual
funds, pension funds or other types of funds. There may also be 'pooled' accounts managed by
lawyers/chartered accountants or stockbrokers for funds held 'on deposit' or 'in escrow' for a
range of clients. Where funds held by the intermediaries are not co-mingled at the bank and there
are 'sub-accounts', each of them attributable to a beneficial owner, all the beneficial owners must
be identified. Where such funds are co-mingled at the bank, the branch should still look through to
the beneficial owners. Where the branches rely on the 'customer due diligence' (CDD) done by an
intermediary, they should satisfy themselves that the intermediary is regulated and supervised
and has adequate systems in place to comply with the KYC requirements. It should be
understood that the ultimate responsibility for knowing the customer lies with the bank.
b) Under the extant AML/CFT framework, therefore, it is not possible for professional intermediaries
like Lawyers and Chartered Accountants, etc. who are bound by any client confidentiality that
prohibits disclosure of the client details, to hold an account on behalf of their clients. It is
reiterated that branches should not allow opening and/or holding of an account on behalf
of a client/s by professional intermediaries, like Lawyers and Chartered Accountants, etc.,
who are unable to disclose true identity of the owner of the account/funds due to any
professional obligation of customer confidentiality. Further, any professional intermediary
who is under any obligation that inhibits bank's ability to know and verify the true identity of the
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client on whose behalf the account is held or beneficial ownership of the account or understand
true nature and purpose of transaction/s, should not be allowed to open an account on behalf of a
client.
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vi) Accounts of Politically Exposed Persons (PEPs) resident outside India
a) Politically exposed persons are individuals who are or have been entrusted with prominent public
functions in a foreign country, e.g., Heads of States or of Governments, senior politicians, senior
government/judicial/military officers, senior executives of state-owned corporations, important
political party officials, etc. Sufficient information should be gathered on any person/customer of
this category intending to establish a relationship and all the information available on the person
in the public domain should be checked. Identity of the person should be verified and information
about the sources of funds should be sought before accepting the PEP as a customer. The
decision to open an account for PEP should be taken at a senior level not less than the Zonal
Head. Branches should also subject such accounts to enhanced monitoring on an ongoing basis.
The above norms may also be applied to the accounts of the family members or close relatives of
PEPs.
b) In the event of an existing customer or the beneficial owner of an existing account, subsequently
becoming a PEP, branches should obtain Zonal Head’s approval to continue the business
relationship and subject the account to the CDD measures as applicable to the customers of PEP
category including enhanced monitoring on an ongoing basis. These instructions are also
applicable to accounts where PEP is the ultimate beneficial owner.
c) Further, branches should ensure appropriate ongoing risk management procedures for identifying
and applying enhanced CDD to PEPs, customers who are close relatives of PEPs, and accounts
of which a PEP is the ultimate beneficial owner. [RBI Master
Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.5 f(iii)]
vii) Accounts of non-face-to-face customers
With the introduction of telephone and electronic banking, increasingly accounts are being opened for
customers without the need for the customer to visit the bank branch. In the case of non-face-to-face
customers, apart from applying the usual customer identification procedures, specific and adequate
procedures to mitigate the higher risk involved. Certification of all the documents presented should be
insisted upon and, if necessary, additional documents may be called for. In such cases, branches
may also require the first payment is to be effected through the customer's account with another bank
which, in turn, adheres to similar KYC standards. In the case of cross-border customers, there is the
additional difficulty of matching the customer with the documentation and the bank may have to rely
on third party certification/introduction. In such cases, it must be ensured that the third party is a
regulated and supervised entity and has adequate KYC systems in place.
viii) Accounts of proprietary concerns
Apart from following the extant guidelines on customer identification procedure as applicable to the
proprietor, branches should call for and verify the following documents before opening of accounts in
the name of a proprietary concern:
a.
Proof of the name, address and activity of the concern, like registration certificate (in the case of
a registered concern), certificate/licence issued by the Municipal authorities under Shop &
Establishment Act, sales and income tax returns, CST/VAT certificate, certificate/registration
document issued by Sales Tax/Service Tax/Professional Tax authorities, Licence issued by the
Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of
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India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian
Medical Council, Food and Drug Control Authorities, registration/licensing document issued in
the name of the proprietary concern by the Central Government or State Government
Authority/Department. Branches may also accept IEC (Importer Exporter Code) issued to the
proprietary concern by the office of DGFT, the complete Income Tax Return (not just the
acknowledgement) in the name of the sole proprietor where the firm's income is reflected, duly
authenticated/acknowledged by the Income Tax authorities and utility bills such as electricity,
water, and landline telephone bills in the name of the proprietary concern as required
documents for opening of bank accounts of proprietary concerns. . [RBI Master Cir
DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.5 h]
Any two of the above documents would suffice. These documents should be in the name of the
proprietary concern.
These guidelines on proprietorship concerns will apply to all new customers, while in case of
accounts of existing customers, the above formalities should have been completed immediately
in terms of our earlier guidelines.
b.
c.
ix) Procedure to be followed in respect of foreign students :
A foreign student studying in India would be considered a “Person Resident in India” as defined in
Section 2 (v) of FEMA Act, 1999 and is eligible to open bank account without prior permission of RBI.
As such account opening and monitoring procedure no longer falls under FEMA Regulations.
Branches/ Offices can open accounts of foreign students studying in India after observing the normal
KYC procedure. Closure of such accounts and repatriation of proceeds are also allowed as per FEMA
notification No. 13/2000 dated 3rd May,2000 and amendments thereon from time to time. Detail of
documents based on which Bank can open an account, in the name of a foreign students studying in
India, are as below :i.
ii.
iii.
iv.
Passport - as the document for proof of identity
Valid Visa - a visa with photograph in it can also serve as an identity proof
Proof of admission - usually a letter from the university or college
Address proof - a letter from the college or hostel, certificate from embassy
ofthe country
of origin or any appropriate legal authority, certified local address inIndia/rent agreement /
certification of registration issued by Foreigner Registration Regional Office (FRRO).
It is observed that foreign student arriving in India are facing difficulties in complying with KYC norms
while opening a bank account due to non-availability of any proof of local address. In view of the
above, RBI has informed the following procedure for opening accounts of foreign students who are
not able to provide an immediate address proof while approaching for opening bank account :i)
Banks may open a Non-Resident Ordinary Rupee (NRO) bank account of a foreign
student on the basis of his/her passport (with appropriate visa and immigration
endorsement) which contains the proof of identity and address in the home country along
with a photograph and a letter offering admission from the educational institution.
ii)
Within a period of 30 days of opening the account, the foreign student should submit to
the branch where the account is opened, a valid address proof giving local address, in the
form of a rent agreement or a letter from the educational institution as a proof of living in a
facility provided by the educational institution. Banks should not insist on the landlord
visiting the branch for verification of rent documents and alternative means of verification
of local address may be adopted by banks.
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iii) During the 30 days period, the account should be operated with a condition of allowing
foreign remittances not exceeding USD 1,000 into the account and a cap of monthly
withdrawal to Rs. 50,000/-, pending verification of address.
iv) On submission of the proof of current address, the account would be treated as a normal
Non-Resident Ordinary Rupee (NRO) account. It will be operated in terms of extant
guidelines for NRO accounts and the provisions of Schedule 3 of FEMA Notification
5/2000 RB dated May 3, 2000 may also be kept in view.
v) Students with Pakistani nationality will need
opening the account.
prior approval of the Reserve Bank for
3.4 Correspondent Banking and Shell Bank
A. Correspondent Bank
Correspondent banking is the provision of banking services by one bank (the
“correspondent bank”) to another bank (the “respondent bank”). These services may
include cash/funds management, international wire transfers, drawing arrangements for
demand drafts and mail transfers, payable-through-accounts, cheques clearing etc. Bank
should gather sufficient information to understand fully the nature of the business of the
correspondent/respondent bank. Information on the other bank’s management, major
business activities, level of AML/CFT compliance, purpose of opening the account, identity of
any third party entities that will use the correspondent banking services, and
regulatory/supervisory framework in the correspondent's/respondent’s country may be of
special relevance. Similarly, bank should try to ascertain from publicly available information
whether the other bank has been subject to any money laundering or terrorist financing
investigation or regulatory action. While it is desirable that such relationships should be
established only with the approval of the Board, in case the Board wishes to delegate the
power to an administrative authority, they may delegate the power to a committee headed by
the Chairman/CEO of the bank while laying down clear parameters for approving such
relationships. Proposals approved by the Committee should invariably be put up to the Board
at its next meeting for post facto approval. The responsibilities of each bank with whom
correspondent banking relationship is established should be clearly documented. In the case
of payable-through-accounts, the correspondent bank should be satisfied that the respondent
bank has verified the identity of the customers having direct access to the accounts and is
undertaking ongoing 'due diligence' on them. The correspondent bank should also ensure that
the respondent bank is able to provide the relevant customer identification data immediately
on request. [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014
Point No. 2.20(a)]
B. Correspondent relationship with a “Shell Bank”
Bank should refuse to enter into a correspondent relationship with a “shell bank” (i.e. a bank
which is incorporated in a country where it has no physical presence and is unaffiliated to any
regulated financial group). Shell banks are not permitted to operate in India. Bank should not
enter into relationship with shell banks and before establishing correspondent relationship
with any foreign institution, bank should take appropriate measures to satisfy that the foreign
respondent institution does not permit its accounts to be used by shell banks. Bank should be
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extremely cautious while continuing relationships with correspondent banks located in
countries with poor KYC standards and countries identified as 'non-cooperative' in the fight
against money laundering and terrorist financing. Bank should ensure that respondent bank
has anti money laundering policies and procedures in place and apply enhanced 'due
diligence' procedures for transactions carried out through the correspondent accounts. [RBI
Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.20(b)]
C. Due Diligence in Correspondent Banking Relationship
If any branch has arrangements with co-operative bank/s wherein the latter open current
accounts and use the cheque book facility to issue ‘at par’ cheques to their constituents and
walk-in- customers for facilitating their remittances and payments in the nature of
correspondent banking arrangements, Zonal Office should monitor and review such
arrangements to assess the risks including credit risk and reputational risk arising therefrom.
For this purpose, bank retains the right to verify the records maintained by the client
cooperative banks/ societies for compliance with the extant instructions on KYC and AML
under such arrangements. [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated
01.07.2014 Point No. 2.7]
3.5 Simplified KYC norms for Foreign Portfolio Investors (FPIs)
Reserve Bank of India in its first Bi-Monthly Monetary Policy Statement, 2014-15, has proposed
to simplify the KYC related procedure for opening bank accounts by FPIs. Based on the
proposals, RBI vide circular No. RBI/2013-14/552 DBOD.AML.BC.No.103/14.01.001/2013-14
dated April 03, 2014 has issued guidelines of KYC norms for Foreign Portfolio Investors (FPIs).
Consequent to the Budget proposal for the year 2013-2014 and the recent amendments to the
Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (Rules), Securities and
Exchange Board of India (SEBI) has rationalised the KYC norms for entry of FPIs. Accordingly,
the matter has since been examined by RBI with the Government and it has been decided by
RBI to simplify the KYC norms in the case of FPIs.
FPIs have been categorized by SEBI based on their perceived risk profile as detailed in
Appendix-III. In terms of Rule 9 (14)(i) of the Rules, simplified norms have been prescribed for
those FPIs have been duly registered in accordance with SEBI guidelines and have undergone
the required KYC due diligence/verification prescribed by SEBI through a Custodian/Intermediary
regulated by SEBI. Such eligible/registered FPIs may approach the branch for opening a bank
account for the purpose of investment under Portfolio Investment Scheme (PIS) for which KYC
documents prescribed by the Reserve Bank (as detailed in Appendix-IV) would be required. For
this purpose, branches may rely on the KYC verification done by the third party (i.e. the
Custodian/SEBI Regulated Intermediary) subject to the conditions laid down in Rule 9 (2) [(a) to
(e)] of the Rules.
In this regard, Custodians/Intermediaries regulated by SEBI will share the relevant KYC
documents with the banks concerned based on written authorization from the FPIs. Accordingly,
a set of hard copies of the relevant KYC documents furnished by the FPIs to the
Custodians/Regulated Intermediaries will be transferred to the concerned bank through their
authorised representative. While transferring such documents, the custodian/Regulated
Intermediary shall certify that the documents have been duly verified with the original or
Notarised documents have been obtained, where applicable. In this regard, a proper record of
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transfer of documents, both at the level of the Custodian/Regulated Intermediary as well as at
the bank, under signatures of the officials of the transferor and transferee entities, may be kept.
While opening bank accounts for FPIs in terms of the above procedure, branches may bear in
mind that they are ultimately responsible for the customer due diligence done by the third party
(i.e. the Custodian/Regulated Intermediary) and may need to take enhanced due diligence
measures, as applicable, if required. Further, branches are required to obtain undertaking from
FPIs or a Global Custodian acting on behalf of the FPI to the effect that as and when required,
the exempted documents as detailed in Annex II will be submitted.
It is further advised that to facilitate secondary market transactions, the branch may share the
KYC documents received from the FPI or certified copies received from a Custodian/Regulated
Intermediary with other banks/regulated market intermediaries based on written authorization
from the FPI.
The provisions of this circular are applicable for both new and existing FPI clients. These
provisions are applicable only for PIS by FPIs. In case the FPIs intend to use the bank account
opened under the above procedure for any other approved activities (i.e. other than PIS), they
would have to undergo KYC drill in terms of extant guidelines. [RBI Cir DBOD.AML.BC.
No.103/14.01.001/2013-14 dated 03.04.2014]
3.6 Operation of bank accounts & money mules
a) It has been brought to our notice that “Money Mules” can be used to launder the proceeds of
fraud schemes (e.g., phishing and identity theft) by criminals who gain illegal access to
deposit accounts by recruiting third parties to act as “money mules.” In some cases these third
parties may be innocent while in others they may be having complicity with the criminals.
b) In a money mule transaction, an individual with a bank account is recruited to receive cheque
deposits or wire transfers and then transfer these funds to accounts held on behalf of another
person or to other individuals, minus a certain commission payment. Money mules may be
recruited by a variety of methods, including spam e-mails, advertisements on genuine
recruitment web sites, social networking sites, instant messaging and advertisements in
newspapers. When caught, these money mules often have their bank accounts suspended,
causing inconvenience and potential financial loss, apart from facing likely legal action for
being part of a fraud. Many a times the address and contact details of such mules are found to
be fake or not up to date, making it difficult for enforcement agencies to locate the account
holder.
c) The operations of such mule accounts can be minimised if branches follow the guidelines on
opening of accounts and monitoring of transactions. Branches are, therefore, advised to
strictly adhere to the guidelines on KYC/AML/CFT issued from time to time and to those
relating to periodical updation of customer identification data after the account is opened and
also to monitoring of transactions in order to protect themselves and their customers from
misuse by such fraudsters.
3.7 Bank no longer knows the true identity
In the circumstances when the branch believes that it would no longer be satisfied that it knows
the true identity of the account holder, the branches should also file an STR with the Zonal
offices who will further report to Head office for reporting to FIU-IND.
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3.8 Small Account
In terms of Government of India, Notification No. 14/2010/F.No.6/2/2007-E.S dated December 16,
2010, certain amendments have been made on the Prevention of Money-laundering (Maintenance of
Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and
Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the
Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. The
notification is reproduced at Appendix-V of this circular.
A. Small Accounts
a) In terms of Rule 2 clause (fb) of the Notification 'small account' means a savings account in a
banking company where(i) the aggregate of all credits in a financial year does not exceed rupees one lakh;
(ii) the aggregate of all withdrawals and transfers in a month does not exceed rupees ten
thousand; and
(iii) the balance at any point of time does not exceed rupees fifty thousand.
b) Rule (2A) of the Notification lays down the detailed procedure for opening 'small accounts'. A
‘small account’ may be opened on the basis of a self-attested photograph and affixation of
signature or thumb print. Such accounts may be opened and operated subject to the following
conditions :
i)
the designated officer of the bank, while opening the small account, certifies under his
signature that the person opening the account has affixed his signature or thumb print,
as the case may be, in his presence;
ii) a ‘small account’ shall be opened only at Core Banking Solution linked bank branches or
in a branch where it is possible to manually monitor and ensure that foreign remittances
are not credited to the account and that the stipulated limits on monthly and annual
aggregate of transactions and balance in such accounts are not breached, before a
transaction is allowed to take place;
iii) a ‘small account’ shall remain operational initially for a period of twelve months, and
thereafter for a further period of twelve months if the holder of such an account provides
evidence before the banking company of having applied for any of the officially valid
documents within twelve months of the opening of the said account, with the entire
relaxation provisions to be reviewed in respect of the said account after twenty four
months;
iv) a 'small account’ shall be monitored and when there is suspicion of money laundering or
financing of terrorism or other high risk scenarios, the identity of customer shall be
established through the production of “officially valid documents”; and foreign remittance
shall not be allowed to be credited into a small account unless the identity of the
customer is fully established through the production of “officially valid documents”. [RBI
Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.9(a)]
Branches are advised to ensure adherence to the procedure for opening of ‘small accounts’.
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B. Officially Valid Documents
a) The Govt. of India Notification has also expanded the definition of 'officially valid document' as
contained in clause (d) of Rule 2(1) of the PML Rules to include job card issued by NREGA
duly signed by an officer of the State Government or the letters issued by the Unique
Identification Authority of India containing details of name, address and Aadhaar number.
Details of Government of India Notification dated 27.08.2013 on “Officially Valid
Documents” is incorporated in Point No. 3.1 (o) above.
b) e-KYC service of Unique Identification Authority of India (UIDAI) may be accepted as a valid
process for KYC verification under Prevention of Money Laundering (Maintenance of Records)
Rules, 2005. It was further advised that, the information containing demographic details and
photographs made available from UIDAI as a result of e-KYC process (“which is an electronic
form and accessible so as to be usable for a subsequent reference”) may be treated as an
‘Officially Valid Document’ under PML Rules.
c) It is also clarified by RBI that banks may accept e-Aadhaar downloaded from UIDAI
website as an officially valid document subject to the following :i)
ii)
If the prospective customer knows only his/her Aadhaar number, the bank may print
the prospective customer’s e-Aadhaar letter in the bank directly from the UIDAI portal;
or adopt e-KYC procedure as mentioned in the circular referred in paragraph (b)
above.
If the prospective customer carries a copy of the e-Aadhaar downloaded elsewhere,
the bank may print the prospective customer’s e-Aadhaar letter in the bank directly
from the UIDAI portal; or adopt e-KYC procedure or confirm identity and address
through simple authentication service of UIDAI. [RBI circular DBOD.AML.BC.No.
44/14.01.001/2013-14 dated September 2, 2013]
d) It is further advised that where a bank has relied exclusively on any of these two documents,
viz. NREGA job card or Aadhaar letter, as complete KYC document for opening of an account,
the bank account so opened will also be subjected to all conditions and limitations prescribed
for small account in the Notification.
e) Accordingly, all accounts opened in terms of procedure prescribed in Rule 2A of the
Notification dated December 16, 2010 referred to above and all other accounts opened ONLY
on the basis of NREGA card or Aadhaar letter should be treated as "small accounts" and be
subject to the conditions stipulated in clause (i) to (v) of the sub-rule (2A) of Rule 9.
f)
RBI advised Banks vide their communication DBOD.AML.BC.No.65/14.01.001/ 2012-13
dated 10.12.2012 that if the address provided by the account holder is the same as that on
Aadhaar letter, it may be accepted as a proof of both identity and address.
In view of the aforesaid RBI guidelines and recent Direct Benefit Transfer (DBT) initiative of
the Government of India, all branches are advised to use Aadhar as a KYC document for
opening of bank accounts to the extent possible to ensure that the bank account can be
automatically linked to Aadhar.
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g) Government of India has notified the “Prevention of Money-Laundering (Maintenance of
Records) Amendment Rules, 2013” (Rules) and have published the same in the extraordinary
official gazette vide G.S.R. No. 576 (E) dated August 27, 2013. In terms of Rule 14(i) of the
notification, Rule 14(i) provides that the ‘Regulator’ may prescribe enhanced or simplified
measures to verify the identity of the customers taking into consideration the type of customer,
business relationship, nature and value of transactions based on the overall money laundering
and terrorist financing risks involved.
A proviso has been added to the definition of ‘officially valid document’ at Rule 2(d), which
states that where ‘simplified measures’ are applied for verifying the identity of customers the
following documents shall be deemed to be 'officially valid documents :
i)
ii)
identity card with applicant's Photograph issued by Central/State Government
Departments, Statutory/ Regulatory Authorities, Public Sector Undertakings,
Scheduled Commercial Banks, and Public Financial Institutions;
letter issued by a gazetted officer, with a duly attested photograph of the person.
In terms of Rule 14(i), it has been decided by the Reserve Bank that ‘simplified measures’
may be applied in the case of ‘Low risk’ customers taking into consideration the type of
customer, business relationship, nature and value of transactions based on the overall money
laundering and terrorist financing risks involved. In respect of low risk category of customers,
where simplified measures are applied, it would be sufficient to obtain any of the documents at
(i) and (ii) of proviso to rule 2(d) for the purpose of proof of identity and proof of address. [RBI
Cir DBOD.AML.BC. No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of India Notification
dated 27.08.2013]
h) Considering that the initiative is aimed at empowering the common man, all branches/offices
should be proactive and ensure obtaining of Aadhar details while opening of accounts. The
following action points should be considered for linking the Aadhar number in existing
accounts during the campaign period :i)
Adequate display should be made in a prominent place of the branch premises requesting
customers to provide their Aadhar number in their existing Savings accounts to enable
Aadhar linkage.
ii) The front-end officials should be sensitized to make customers aware of the advantages of
Aadhar linkage.
iii) In the exiting districts where Direct Benefit Transfer scheme is already in progress, the
branch head should ensure opening of accounts of all the beneficiaries. Account opening
campaigns may be conducted periodically at the identified wards/areas.
iv) Proper liaison should be maintained with the dealing govt. officials to keep aware of the
latest developments on Direct Benefit Transfer.
Aadhar linkage in the existing accounts as well as opening new accounts with Aadhar as
KYC, provides an opportunity for the Bank to actively participate in the Cash Benefit Transfer
Scheme.
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3.9 Comprehensive Financial Inclusion
Under “Prime Minister Jan Dhan Yojana”, action plan has been taken under the direction of Govt. of
India for 100% Financial Inclusion of all the households across the country. The plan is proposed to
be implemented as a Mission Mode Project which envisages a comprehensive coverage of all
excluded households in the country by a six pillar approach in two phases :(i) Phase I (15th August ,2014-14th August,2015)
 Universal access to banking facilities
 Providing Basic Banking Accounts with overdraft facility of Rs.5000 and RuPay Debit card
with inbuilt accident insurance cover of Rs. 1 lakh
 Financial Literacy Programme
 Creation of Credit Guarantee Fund for coverage of defaults in overdraft A/Cs
(ii) Phase II (15th August 2015-14th August,2018)
 Micro Insurance
 Unorganized sector Pension schemes like Swavlamban
The approach under this pillar of the campaign would be interalia :a) Opening of SB account with zero balance. For ease of opening of accounts it is advised to
take benefit of e-KYC approach, as details in Point No. 3.8 (B) above.
b) In order to cut down time on account opening, under the campaign, a one page account
opening form has been designed, copy of which is reproduced vide Appendix-VI.
c) The account would be linked with Aadhaar number of the account holder and would become
the single point receipt of all Direct Benefit Transfers (DBT) from the Central
Government/State Government/Local Bodies.
d) Convergence with the efforts of the National Rural Livelihoods Mission (NRLM) would sought
in order to open bank accounts for the Self Help Group (SHG) members.[Govt. of India
directives dated 09.07.2014]
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Chapter - 4
Monitoring of Transactions
4.1 MONITORING OF NEW ACCOUNTS :
Ongoing monitoring is an essential element of effective KYC procedures. Close watch should be kept
over operations in newly opened accounts at least for first two quarters from the date of opening such
accounts so as to guard against fraudulent or doubtful transactions taking place therein. Reasonable
query should be made in case of suspicious and/or high value transactions in a newly opened
account and if no convincing explanation is forthcoming, Branch should consider reporting such
transactions to the Zonal Office/ Head Office.
4.2 OPERATIONS IN NEW ACCOUNT :
No cheque book should be issued and only cash transaction should be allowed in the new account till
the independent confirmation of the address of the account holders is made and confirmation of the
introducer is received. Payment against collection of cheque / drafts etc. should not be released in
the newly opened account till introductory reference like confirmation of identity and address of the
account holder and introducer are completed satisfactorily.
All the cheque books issued upto six months should be stamped with words ‘New Account’.
Branches as a collecting banker should exercise abundant caution when drafts and other instruments
for large amounts are lodged in newly opened accounts and such large amounts are sought to be
withdrawn from these accounts shortly after collection of the relative instruments. They should also
institute immediate enquiries to find out the bonafide of the account holders before sending the drafts
/ instruments in clearing or before allowing withdrawals of such amounts shortly after collection.
Collection of instruments of large amount immediately opening of an account should not be accepted
without enquiring about its source, genuineness and purpose etc. with specific satisfaction of the
branch official.
Mandate of the account holder for operation in the account must be recorded so that it may not be
disputed later on.
Special caution should be exercised particularly when the instrument intended to be deposited in a
newly opened account bears a date prior to the date of opening of account. The address indicated on
the dividend/interest warrants/refund orders must be independently verified with that recorded with
the Branch to ensure genuineness of the instrument and the person in whose account it is deposited.
In case, the address is not mentioned in such instruments, the depositor should be requested to
produce the counterfoil thereof for verification of the genuineness of the address of the account
holder.
The original certificates/ any other documents evidencing the ownership of the instrument may have
to be called for in case of any doubt of deposit of high value dividend/interest warrants/refund orders
etc. by the new account holder.
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4.3 MONITORING TRANSACTIONS OF SUSPICIOUS NATURE :
a) Special attention should be paid to all complex, unusual large transactions and all unusual
pattern of transactions, which have no apparent economic or visible lawful purpose.
Significant business transaction should not be allowed in the account of the customers who
fail to provide evidence of their identity or fail to provide satisfactory purpose of the significant
banking transactions which may be unusual or unrelated to their normal banking transactions.
However, the extent of monitoring will depend on the risk sensitivity of the account.
b) Bank has to prescribe threshold limits for a particular category of accounts for paying specific
attention to the transactions which exceed these limits. Transactions that involve large
amounts of cash inconsistent with the normal and expected activity of the customer should
particularly attract the attention of the bank. Very high account turnover inconsistent with the
size of the balance maintained may indicate that funds are being 'washed' through the
account. High-risk accounts have to be subjected to intensified monitoring. Bank has
implemented set key indicators for such accounts, taking note of the background of the
customer, such as the country of origin, sources of funds, the type of transactions involved
and other risk factors. High risk associated with accounts of bullion dealers (including subdealers) & jewelers are taken into account to identify suspicious transactions for filing
Suspicious Transaction Reports (STRs) to Financial Intelligence Unit- India (FIU-IND). . [RBI
Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.13(a)]
c) Branches should exercise ongoing due diligence of their business relationship with every
client and closely examine the transactions in order to ensure that they are consistent with
their knowledge of the client, his business and risk profile and where necessary, the source of
funds. [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point
No. 2.13(c)]
d) The risk categorization of customers, compilation and periodic updation of customer profiles,
monitoring and closure of alerts in accounts by bank is extremely important for effective
implementation of KYC/AML/CFT measures. There should not be any laxity in effective
implementation of the Reserve Bank’s guidelines in this area renders the system vulnerable to
operational risk. Branches/offices should, therefore, ensure compliance with the regulatory
guidelines on KYC/AML/CFT both in letter and spirit. RBI advised the bank to complete the
process of risk categorization and compiling/updating profiles of all existing customers in a
time-bound manner, by end-March 2013. [RBI Master
Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.13(d)]
e) Accounts of Multi Level Marketing (MLM) concerns:
RBI has noticed that certain firms posing as Multi level Marketing (MLM) agencies for
consumer goods and services have been actually mobilizing large amount of deposits from
public with promise of high returns. The agents of these firms open accounts in CBS branches
and lure common people to deposit in these accounts promising very high returns and issued
post dated cheques representing interest dues and repayment. Funds pooled into the
principal account of MLM firms withdrawn for purposes apparently illegal or highly risky. So
long money keeps coming into MLM company’s account from new depositors, the cheques
are honoured but once the chain breaks, all such post-dated instruments are dishonoured.
This results in fraud on the public and is a reputational risk for banks concerned.
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Branches should closely monitor the transactions in accounts of marketing firms. In cases
where a large number of cheque books are sought by the company, there are multiple small
deposits (generally in cash) across the country in one bank account and where a large
number of cheques are issued bearing similar amounts/dates, the branch should carefully
analyse such data and in case they find such unusual operations in accounts, the matter
should be immediately brought to notice of the Head Office for onward reporting to Reserve
Bank and other appropriate authorities such as Financial Intelligence Unit India (FlU-IND)
under Department of Revenue, Ministry of Finance. . [RBI Master Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.13(b)]
Caution is to be exercised in opening accounts of the MLM firms and issue of cheque books
in such accounts. Also strict compliance of KYC and AML guidelines and Cheque issue
guidelines should be ensured.
Some of the MLM firms which are based in Singapore like SpeakAsia, was operating in India
through agents purportedly conducting online surveys. The typical modus operandi is to ask
the prospective customers to deposit Rs.11,000/- or so in a designated account to gain access
to portal and password and download a survey form. For each survey form filled in and
uploaded, one gets Rs. 500/- and those who have filled in surveys will have to multiply the
users to get back their deposit. The agents are opening accounts with various banks and
have collected large sums of money. These proceeds are aggregated into a central pooling
account and remitted overseas as subscription charges.
The names of some of the firms provided by RBI were circulated for exercising caution while
opening and operating the accounts. (List enclosed as Appendix -XIII). It has now come to
the notice of RBI that the companies/individuals mentioned in Appendix-XIV enclosed, too
have been identified/suspected of carrying out MLM activities.
Branches/Offices are once again advised to be cautious in opening and operating
accounts for such schemes especially in view of the type of business and inherent risk
associated with such activity. Branches/offices are also advised to mark the account
as MLM under the customer type Non-Personal MLM companies - 020504 or Personal MLM Professionals - 010128 respectively as and when such activity is noticed.
A.
Transaction monitoring (Alerts generated though AML Software)
Bank was following two tier processing of system generated suspicious transaction alerts (STR alerts)
involving Zonal Office and Head Office. The STR alerts generation has since been centralized by
delinking of the Zonal users with effect from 01.01.2013 for processing only at Head Office level.
Bank is using different scenarios to identify “Suspicious Transaction” for reporting to Financial
Intelligence Unit, Government of India (FIU-IND). Ministry of Finance felt in July 2010 the need to
form a “Working Group” consisting of selective banks, RBI, IBA and FIU-IND to evolve standard
parameters for generation of suspicious transaction alerts. Accordingly a list of commonly used 61
alert indicators for detection of suspicious transactions as provided by IBA is enclosed as Appendix –
VII for awareness of the field functionaries. These alert indicators are likely to be related to following
sources :-
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o
Watch list (WL) – The customer details matched with watch lists (eg. UN list, Interpol list etc)
o
Transaction monitoring (TM) – Transaction monitoring alert (e.g. unusually large transaction,
increase in transaction volume etc.)
o
Typology (TY) – Common typologies of money laundering, financing of terrorism or other
crimes (e.g. Structuring of cash deposits etc.)
o
Risk Management System (RM) – Risk management system based alert (e.g. high risk
customer, country, location, source of funds, transaction type etc.)
B.
Offline Transaction Monitoring
There are certain types of transactions which can be identified at the branch/offices themselves. The
identification of such suspicious transactions is more likely to be related with following sources.
o
Customer verification (CV): Detected during customer acceptance, identification or verification
(eg. Use of forged id, wrong address etc,)
o
Law Enforcement Agency Query (LQ): Query or letter received from law enforcement agency
(LEA) or intelligence agency (e.g. Blocking order received, transaction details sought etc.)
o
Media Reports (MR): Adverse media reports about customer. (e.g. newspaper reports)
o
Employee Initiated (EI): Employee raised alert (e.g. behavioral indicators such as customer
had no information about transaction, attempted transaction etc.)
o
Public Complaint (PC): Complaint received from public (e.g. abuse of account for committing
fraud etc.)
o
Business Associates (BA): Information received from other institutions, subsidiaries or
business associates (e.g. cross-border referral, alert raised by agent etc.)
The list of 27 commonly used off-line alert indicators for detection of suspicious transactions at
branches/offices is given in Appendix - VIII
In order to fulfill obligations under PMLA, 2002, Bank has to report these suspicious transactions to
FIU-IND. Branches/ Controlling Offices are advised to report such identified/ attempted transactions
to Head Office, AML & KYC Cell , by providing detail of the incident through e-mail to
ho.kyc@allahabadbank.in to review the case for reporting under STR. All field functionaries are
required to be vigilant to detect and report such offline alerts.
It should be ensured by branches that any offline alert detected by them is immediately reported to
the controlling office/Head Office. (Eg. Customer did not complete transaction after queries such
source of funds etc.). Detailed list of offline alert scenarios is provided vide Appendix-VII.
Branches/Offices are also advised to contact the nodal officers at Zonal Offices for their guidance
while deciding on reporting of offline alerts. The Nodal Officers at Zonal Offices are advised to
effectively monitor and guide the branches in reporting offline alerts.
Role of branch officials in reporting offline alerts for identifying suspicious transactions is very
important. Dealing officer/employee in the front desk should be well aware of such
identified/attempted transactions which could not be captured by the system. As such all field
functionaries are required to be vigilant and keep themselves aware of the alert indicators and
indicative suspicious activities, to detect and report them immediately to Head Office, AML &KYC Cell
as detailed in the instructions. An indicative list of suspicious activities is provided in Appendix-IX
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C.
Ceiling and Monitoring of Cash Transactions / Issuance of Travellers Cheques
Demand Drafts / Mail Transfers / Telegraphic Transfers
/
In order to curb the misuse of banking channels for violation of fiscal laws and evasion of taxes,
demand drafts/mail transfers/telegraphic transfers/travelers cheque etc. for Rs.50,000/- and above
should be issued only by debiting the customer’s account or against cheques or other instruments
tendered by the customer and not against cash payment. Similarly, payments of such type of
instruments for Rs. 50,000/- and above should be made through banking channels and not in cash.
The applicants (whether customers or not) for the above transactions i.e. for issuance of drafts/mail
transfers/telegraphic transfers/travelers cheque etc. for amount exceeding Rs. 50,000/= should affix
Permanent (Income Tax) Account Number on the applications.
In case of transactions carried out by a non-account based customer, that is a walk-in customer,
where the amount of transaction is equal to or exceeds rupees fifty thousand, whether conducted as
a single transaction or several transactions that appear to be connected, the customer's identity and
address should be verified. However, if there is reason to believe that a customer is intentionally
structuring a transaction into a series of transactions below the threshold of Rs.50,000/identity and address of the customer should be verified and filing a suspicious transaction
report (STR) to FIU-IND should also be considered.
In order to ensure monitoring of structuring of cash transactions below the threshold limit of
Rs.50,000/-, a new system of real-time alert generation has been introduced with effect from
03.06.2014 on the following lines :a) Real-time generation of alert through Pop-up for issuance of Demand Draft (DD) / Banker’s
Cheque (BC) / Inter-Office-Instrument (IOI) / other remittances in cash below the threshold
limit i.e. within the range of Rs.40,000/- to Rs.49,000/b) Generation of Exceptional Report for DD/BC/IOI/other remittances issued in cash above
Rs.40,000/- and pushing of such report to branch report folder daily [ RBI observation on
Thematic Review on adherence to AML & KYC issues of our Bank]
D.
White-listing of Accounts for AML System
Accounts eligible for white-listing are those of Government department/ undertaking, Schedule Bank,
RBB, Co-Operative Bank, various funds managed/regulated by the Government/ Quasi-Government
bodies where the scope of suspicious transaction is negligible.
The accounts for white-listing should be screened by the controlling offices in consultation with the
branch keeping records at the Zonal Office for future reference. All such selected accounts are to be
reported by the Zonal Head under his/her signature to Head Office (AML & KYC Cell) for ‘white
listing’ giving proper reason in each case maintaining top secrecy.
White-listing of accounts is not applicable for impersonal accounts like Sundry Creditors etc. which
are prone to operational risk through fraudulent means. Therefore, field level functionaries should
monitor those accounts to avoid unnecessary routing of transactions through it.
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4.4 SCREENING OF CASH WITHDRAWALS AND DEPOSITS FOR THE PURPOSE OF CTR
Subsequent to migration of all branches to CBS, the Cash Transaction Reports (CTRs) covering all
transactions of the value of more than Rs.10 lakhs or its equivalent in foreign currency and all series
of cash transactions integrally connected to each other which have been valued below Rs.10 lakhs or
its equivalent in foreign currency where such series of transactions have taken place within a month
and the monthly aggregate value of such transactions exceeds Rs.10 lakhs or its equivalent value in
foreign currency, is being generated centrally by CBS, Project Office for submission of monthly CTR
to FIU-IND. However, the copy of monthly CTR submitted by the Bank pertaining to the concerned
branch is being placed on the reports folder every month. The following action points are to be
adhered by the branches and Zonal Offices in this regard.
Action points for Branches :
The copy of the monthly CTR report should be perused carefully to find any abnormality or suspicion
in the accounts. If any transaction appears suspicious the same should be reported immediately to
the Zonal Office for onward reporting to Head Office. Thus, all CTRs thus reported in branch folder
must be scrutinized at the branch level for STR alerts.
It should also be ensured that the monthly CTR report available in the branch should be produced
before auditors/inspectors when asked for.
Branches are also advised to meticulously follow the instruction on “Maintenance of records of
transactions; “Information to be preserved’ and “Maintenance and Preservation of records” as
detailed in Para 4.13
Action points for Zonal Offices :
Zonal Office will closely monitor the high value transactions in the branches and guide the branches
in reporting suspicious transactions to Head Office. Zonal Office will scrutinize the reports received
from the branches and investigate abnormality or suspicious transaction, if any, by deputing officials.
Zonal Heads, during their periodical branch visits, will verify such high value transaction accounts in
discussion with the Branch Heads.
4.5 MAINTENANCE OF CUSTOMER’S PROFILE (RISK PROFILE) :
The KYC guidelines go beyond merely establishing the identity of the person and satisfying about
his/her credentials by obtaining an introductory reference from a known person. The due diligence
expected under KYC involves going in to the purpose and reasons for opening the account,
anticipated turnover in the account, source of wealth (net worth) of the person opening the account
and sources of funds flowing into the account. Thus, this is not a responsibility, which ends with the
opening of the account and monitoring of transactions in the initial few months of opening of the
account. Due diligence has to be a continuous process.
As detailed in Chapter – 2 (C), Branches should maintain “Customer Risk Profile” (format provided in
Appendix-I) both for new as well as existing customers based on the declaration/ information
furnished by the customer during the course of interview so as to understand customer’s intended
relationship with the Bank.
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The profile would give an idea as to what type of transactions / activities are expected in the account.
This information is valuable for monitoring the activities in the account. Based upon the information
given by the customer and recorded in the Customer Profile regarding his/ her occupation/ activity/
source of funds etc., a “threshold limit” in each particular account is to be determined.
Very high turnover in the account inconsistent with the size of the balance maintained requires
intensified monitoring. If transactions of very high amount in variance with the profile are noticed, the
account holder should be contacted for further details to the satisfaction of the Branch Manager. On
the basis of assessment, the account should be reviewed and the profile be re-classified according to
the risk perceived and the nature and extent of monitoring required in future is to be determined
accordingly.
4.6 TERRORIST FINANCE :
Lists of terrorist entities notified by Government of India as received through Reserve Bank of India
are circulated to the Branches / Offices by Head Office, to exercise caution if any transaction is
detected with such entities. The Instruction Circulars issued pertaining to the list of banned/ terrorist
organization should be properly preserved by the Branches. In case the name of any banned
organization appears as payee/endorsee/applicant, reporting of such transactions as and when
detected is to be done by the Branch to Head Office through respective Zonal Office. Head Office in
turn will report the matter to RBI/appropriate authority designated by Govt.
In terms of Prevention of Money Laundering Act, 2002, suspicious transaction should include,
inter-alia, transactions which give rise to a reasonable ground of suspicion that these may
involve financing of the activities relating to terrorism.
As and when list of terrorist individuals and entities, approved by Security Council
Committees established pursuant to various United Nations’ Security Council Resolutions
(UNSCRs) are received from RBI, the same is circulated to the branches/offices which should
ensure to update the consolidated list of such individuals and entities.
The UN Security Council has adopted Resolutions 1988 (2011) and 1989 (2011) which have
resulted in splitting of the 1267 Committee's Consolidated List into two separate lists, namely:
i) “Al-Qaida Sanctions List”, which is maintained by the 1267 / 1989 Committee. This list
shall include only the names of those individuals, groups, undertakings and entities
associated with Al-Qaida. The updated Al-Qaidal list is available at
http://www.un.orq/sc/committees/1267/aq sanctions list.shtml
ii) “1988 Sanctions List”, which is maintained by the 1988 Committee. This list consists
of names previously included in Sections A (“Individuals associated with the Taliban”)
and B (“Entities and other groups and undertakings associated with the Taliban”) of
the Consolidated List. The Updated 1988 Sanctions list is available at
http://www.un.orq/sc/committees/1988/list.shtml
It may be noted that both “Al-Qaida Sanctions List” and “1988 Sanctions List” are to be taken
into account for the purpose of implementation of Section 51A of the Unlawful Activities
(Prevention) Act, 1967. . [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated
01.07.2014 Point No. 2.17(b)]
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Branches /Offices should ensure that before opening any new account, the name/s of the
proposed customer does not appear in the list. Branches should scan all existing accounts to
ensure that no account is held by or linked to any of the entities or individuals included in the
list. Full details of accounts bearing resemblance with any of the individuals/entities should
immediately be reported to Head Office through Zonal office for intimation to RBI and FIU-IND,
Govt. of India.
The requirement to report transactions which according to the reporting official/employee is
suspicious or has reason to suspect with regard to :





Involvement of funds of illegal activity ; or
Intended to hide or disguise assets derived from illegal activities ; or
Is designed to evade money laundering guidelines ; or
Has no business or apparent lawful purpose ; or
Is the sort in which the particular customer is normally expected to engage in and for
which, after examining available facts, satisfactory linkage is not obtained.
Besides Prevention of Terrorism Act (POTA), 2002, the Security Council Sanctions Committee of the
United Nations has decided vide Security Council Resolution 1390 that the accounts of certain
individuals and entities listed by them should be immediately frozen.
The list of entities and individuals included in the Resolution as received from Reserve Bank of India
is circulated to the Branches/Offices. In case there is any account of such individuals/entities,
Branches/Offices should suspend operation in such accounts forthwith under intimation to, AML &
KYC Cell, Head Office.
It should be ensured that KYC norms /AML standards/CFT measures are put in place so that
criminals are not allowed to misuse the banking channels. It is therefore necessary that adequate
screening mechanism is put in place by the bank as an integral part of their recruitment/hiring process
of personnel.
4.7 FREEZING OF ASSETS UNDER SECTION 51A OF UNLAWFUL ACTIVITIES (PREVENTION)
ACT, 1967 :
Branches are advised to adhere to the guidelines on Freezing of Assets under Section 51 A of
Unlawful activities (Prevention) Amendment Act, 2008 as detailed hereunder and contact the
Zonal Office/Head Office immediately on occurrence of any such incidence.
i) The Unlawful Activities (Prevention) Act, 1967 (UAPA) has been amended by the Unlawful
Activities (Prevention) Amendment Act, 2008. Government has issued an Order dated August
27, 2009 detailing the procedure for implementation of Section 51A of the Unlawful Activities
(Prevention) Act, 1967 relating to the purposes of prevention of, and for coping with terrorist
activities. In terms of Section 51A, the Central Government is empowered to freeze, seize or
attach funds and other financial assets or economic resources held by, on behalf of or at the
direction of the individuals or entities Listed in the Schedule to the Order, or any other person
engaged in or suspected to be engaged in terrorism and prohibit any individual or entity from
making any funds, financial assets or economic resources or related services available for the
benefit of the individuals or entities Listed in the Schedule to the Order or any other person
engaged in or suspected to be engaged in terrorism.
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ii) Branches are required to strictly follow the procedure laid down in the UAPA Order
dated August 27, 2009 (Appendix VIII) and ensure meticulous compliance to the Order
issued by the Government.
iii) On receipt of the list of individuals and entities subject to UN sanctions (referred to as
designated lists) from RBI, branches should ensure expeditious and effective implementation
of the procedure prescribed under Section 51A of UAPA in regard to freezing/unfreezing of
financial assets of the designated individuals/entities enlisted in the UNSCRs and especially,
in regard to funds, financial assets or economic resources or related services held in the form
of bank accounts.
iv) In terms of Para 4 of the Order, in regard to funds, financial assets or economic resources
or related services held in the form of bank accounts, the RBI would forward the
designated lists to the banks requiring them to :a) Maintain updated designated lists in electronic form and run a check on the given
parameters on a regular basis to verify whether individuals or entities listed in the
schedule to the Order (referred to as designated individuals/entities) are holding any
funds, financial assets or economic resources or related services held in the form of bank
accounts with them.
b) In case, the particulars of any of their customers match with the particulars of designated
individuals/entities, the banks shall immediately, not later than 24 hours from the time of
finding out such customer, inform full particulars of the funds, financial assets or economic
resources or related services held in the form of bank accounts, held by such customer on
their books to the Joint Secretary (IS.I), Ministry of Home Affairs, at Fax No.011-23092569
and also convey over telephone on 011-23092736. The particulars apart from being sent
by post should necessarily be conveyed on e-mail.
c) Banks shall also send by post a copy of the communication mentioned in (b) above to the
UAPA nodal officer of RBI, Chief General Manager, Department of Banking Operations
and Development, Central Office, Reserve Bank of India, Anti Money Laundering Division,
Central Office Building, 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai-400 001 and
also by fax at No.022-22701239. The particulars apart from being sent by post/fax should
necessarily be conveyed on e-mail id: cgmaml@rbi.org.in.
d) Banks shall also send a copy of the communication mentioned in (b) above to the UAPA
nodal officer of the State/UT where the account is held as the case may be and to FIUIndia.
e) In case, the match of any of the customers with the particulars of designated
individuals/entities is beyond doubt, the banks would prevent designated persons from
conducting financial transactions, under intimation to Joint Secretary (IS.I), Ministry of
Home Affairs, at Fax No. 011-23092569 and also convey over telephone on 01123092736. The particulars apart from being sent by post should necessarily be conveyed
on e-mail id : isis@nic.in.
f) Banks shall also file a Suspicious Transaction Report (STR) with FIU-IND covering all
transactions in the accounts covered by paragraph (b) above, carried through or
attempted, as per the prescribed format.
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v) Freezing of financial assets
a)
On receipt of the particulars as mentioned in paragraph iv(b) above, IS-I Division of
MHA would cause a verification to be conducted by the State Police and /or the Central
Agencies so as to ensure that the individuals/ entities identified by the banks are the
ones listed as designated individuals/entities and the funds, financial assets or
economic resources or related services , reported by banks are held by the designated
individuals/entities. This verification would be completed within a period not exceeding 5
working days from the date of receipt of such particulars.
b)
In case, the results of the verification indicate that the properties are owned by or held
for the benefit of the designated individuals/entities, an order to freeze these assets
under section 51A of the UAPA would be issued within 24 hours of such verification and
conveyed electronically to the concerned bank branch under intimation to Reserve
Bank of India and FIU-IND.
c)
The order shall take place without prior notice to the designated individuals/entities.
vi) Implementation of requests received from foreign countries under U.N. Security Council
Resolution 1373 of 2001
a)
U.N. Security Council Resolution 1373 obligates countries to freeze without delay the
funds or other assets of persons who commit, or attempt to commit, terrorist acts or
participate in or facilitate the commission of terrorist acts; of entities or controlled
directly or indirectly by such persons; and of persons and entities acting on behalf of,
or at the direction of such persons and entities, including funds or other assets derived
or generated from property owned or controlled, directly or indirectly, by such persons
and associated persons and entities.
b)
To give effect to the requests of foreign countries under U.N. Security Council
Resolution 1373, the Ministry of External Affairs shall examine the requests made by
the foreign countries and forward it electronically, with their comments, to the UAPA
nodal officer for IS-I Division for freezing of funds or other assets.
c)
The UAPA nodal officer of IS-I Division of MHA, shall cause the request to be
examined, within five working days so as to satisfy itself that on the basis of applicable
legal principles, the requested designation is supported by reasonable grounds, or a
reasonable basis, to suspect or believe that the proposed designee is a terrorist, one
who finances terrorism or a terrorist organization, and upon his satisfaction, request
would be electronically forwarded to the nodal officers in RBI. The proposed designee,
as mentioned above would be treated as designated individuals/entities.
d)
Upon receipt of the requests from the UAPA nodal officer of IS-I Division, the list would
be forwarded to banks and the procedure as enumerated at paragraphs [(iii), (iv) and
(v)] shall be followed.
e)
The freezing orders shall take place without prior notice to the designated persons
involved.
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vii) Procedure for unfreezing of funds, financial assets or economic resources or related
services of individuals/entities inadvertently affected by the freezing mechanism upon
verification that the person or entity is not a designated person
Any individual or entity, if it has evidence to prove that the freezing of funds, financial assets
or economic resources or related services, owned/held by them has been inadvertently
frozen, they shall move an application giving the requisite evidence, in writing, to the
concerned bank. The banks shall inform and forward a copy of the application together with
full details of the asset frozen given by any individual or entity informing of the funds, financial
assets or economic resources or related services have been frozen inadvertently, to the nodal
officer of IS-I Division of MHA as per the contact details given in paragraph (iv)(b) above
within two working days. The Joint Secretary (IS-I), MHA, being the nodal officer for (IS-I)
Division of MHA, shall cause such verification as may be required on the basis of the evidence
furnished by the individual/entity and if he is satisfied, he shall pass an order, within fifteen
working days, unfreezing the funds, financial assets or economic resources or related
services, owned/held by such applicant under intimation to the concerned bank. However, if it
is not possible for any reason to pass an order unfreezing the assets within fifteen working
days, the nodal officer of IS-I Division shall inform the applicant.
viii) Communication of Orders under section 51A of Unlawful Activities (Prevention) Act.
All Orders under section 51A of Unlawful Activities (Prevention) Act, relating to funds, financial
assets or economic resources or related services, would be communicated to all banks
through RBI.
ix)
Jurisdictions that do not or insufficiently apply the FATF Recommendations
a)
Branches/offices are required to take into account risks arising from the deficiencies in
AML/CFT regime of the jurisdictions included in the FATF Statement. In addition to
FATF Statements circulated by Reserve Bank of India from time to time,
branches/offices may also consider publicly available information for identifying
countries, which do not or insufficiently apply the FATF Recommendations.
Branches/offices should also give special attention to business relationships and
transactions with persons (including legal persons and other financial institutions) from
or in countries that do not or insufficiently apply the FATF Recommendations and
jurisdictions included in FATF Statements.
b)
Branches/offices should examine the background and purpose of transactions with
persons (including legal persons and other financial institutions) from jurisdictions
included in FATF Statements and countries that do not or insufficiently apply the FATF
Recommendations. Further, if the transactions have no apparent economic or visible
lawful purpose, the background and purpose of such transactions should, as far as
possible be examined, and written findings together with all documents should be
retained and made available to Reserve Bank/other relevant authorities, on request.
[RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No.
2.19]
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4.8 ADHERENCE TO FOREIGN CONTRIBUTION REGULATION ACT (FCRA, 1976)
The provisions of the Foreign Contribution (Regulation) Act, 1976 regulates the receipt of foreign
contribution in the country. While accepting such contributions, Branches may open accounts or
collect cheques only in favour of associations, which are registered under the Foreign Contribution
Regulation Act ibid. by Government of India. A certificate to the effect that the associations registered
with the Government of India should be obtained from the concerned associations at the time of
opening of the account or collection of cheques.
While granting registration or prior permission, the Ministry of Home Affairs, Government of India
invariably endorses a copy thereof to the concerned branch. Branches should desist from opening
accounts in the name of banned organisations and those without requisite registration. Branches /
Offices may access the website of Government of India (http://mha.nic. in/fcra/fcra.html) which
contains the names of associations registered with them u/s 6(1)(a) of FCRA, 1976. List of banned
organisations as circulated by Head Office from time to time should be properly preserved and
referred as and when required. The Branches / Offices should strictly comply with the requisite legal
requirements. Failure to comply would have serious implications.
Branches / Offices should also comply with and follow at all times the procedures which apply in each
of the day to day operations which broadly includes :




Identifying customers thoroughly when opening accounts
moving money around between accounts
recording transactions
reporting suspicious transactions
The Branches maintaining accounts under the purview of FCRA, 1976 should ensure that mandatory
annual statements statutory under the Act are submitted by the account holders to the appropriate
Govt. department. Failing compliance by the customer, credit against FC remittances may be
withheld under advice to the customer/ beneficiary.
Branches should submit details of the foreign contributions credited to the accounts of Association /
Organisation, if any, on a half-yearly (March / September) basis to the Zonal Office within 15 days
from the closure of half-year in the prescribed format.
Zonal Offices in turn should submit the consolidated position to Foreign Department, Head Office
within one month from the closure of the half-year.
4.9 ANTI-MONEY LAUNDERING FOCUS
Money laundering is the process by which criminals attempt to hide and disguise the true origin and
ownership of the proceeds of criminal activities, thereby avoiding prosecution, conviction and
confiscation of criminal funds.
Generally, the money laundering process involves three stages :
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Placement : Physically disposing of cash derived from illegal activity. One way to accomplish this is
by placing criminal proceeds into traditional financial institutions or non-traditional financial institutions
such as currency exchanges, casinos or check – cashing services.
Layering : Separating the proceeds of criminal activity from their source through the use of layers of
financial transactions. These layers are designed to hamper the audit trail, disguise the origin of funds
and provide the anonymity. Some examples of services that may be used during this phase are :
i) Early surrender of an annuity with regard to penalties,
ii) Fraudulent letter of credit transactions; and
iii) Illicit use of bearer shares.
Integration : Placing the laundered proceeds back into the economy in such a way that they re-enter
the financial system as apparently legitimate funds.
An illustrative check-list for covering Money Laundering activities is provided in Appendix – XI
4.10
WIRE TRANSFER
Wire transfers are being used as an expeditious method for transferring funds between bank
accounts. Wire transfers include transactions occurring within the national boundaries of a country or
from one country to another. As wire transfers do not involve actual movement of currency, they are
considered as a rapid and secure method for transferring value from one location to another.
i) The salient features of a wire transfer transaction are as under :
a) Wire transfer is a transaction carried out on behalf of an originator person (both natural and
legal) through a bank by electronic means with a view to making an amount of money
available to a beneficiary person at a bank. The originator and the beneficiary may be the
same person.
b) Cross-border transfer means any wire transfer where the originator and the beneficiary bank
or financial institutions are located in different countries. It may include any chain of wire
transfers that has at least one cross-border element.
c) Domestic wire transfer means any wire transfer where the originator and receiver are located
in the same country. It may also include a chain of wire transfers that takes place entirely
within the borders of a single country even though the system used to effect the wire transfer
may be located in another country.
d) The originator is the account holder, or where there is no account, the person (natural or legal)
that places the order with the bank to perform the wire transfer.
ii) Wire transfer is an instantaneous and most preferred route for transfer of funds across the globe
and hence, there is a need for preventing terrorists and other criminals from having unfettered
access to wire transfers for moving their funds and for detecting any misuse when it occurs.
This can be achieved if basic information on the originator of wire transfers is immediately
available to appropriate law enforcement and/or prosecutorial authorities in order to assist them
in detecting, investigating, prosecuting terrorists or other criminals and tracing their assets. The
information can be used by Financial Intelligence Unit - India (FIU-IND) for analysing suspicious
or unusual activity and disseminating it as necessary. The originator information can also be put
to use by the beneficiary bank to facilitate identification and reporting of suspicious transactions
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to FIU-IND. Owing to the potential terrorist financing threat posed by small wire transfers, the
objective is to be in a position to trace all wire transfers with minimum threshold limits.
Accordingly, branches must ensure that all wire transfers are accompanied by the following
information :(A) Cross-border wire transfers
(i) All cross-border wire transfers must be accompanied by accurate and meaningful
originator information.
(ii) Information accompanying cross-border wire transfers must contain the name and
address of the originator and where an account exists, the number of that account.
In the absence of an account, a unique reference number, as prevalent in the
country concerned, must be included.
(iii) Where several individual transfers from a single originator are bundled in a batch
file for transmission to beneficiaries in another country, they may be exempted
from including full originator information, provided they include the originator’s
account number or unique reference number as at (ii) above.
(B) Domestic wire transfers
(i) Information accompanying all domestic wire transfers of Rs.50000/- (Rupees Fifty
Thousand) and above must include complete originator information i.e. name,
address and account number etc., unless full originator information can be made
available to the beneficiary bank by other means.
(ii) If a branch has reason to believe that a customer is intentionally structuring wire
transfer to below Rs.50000/- (Rupees Fifty Thousand) to several beneficiaries in
order to avoid reporting or monitoring, the branch must insist on complete customer
identification before effecting the transfer. In case of non-cooperation from the
customer, efforts should be made to establish his identity and Suspicious
Transaction Report (STR) should be made to Zonal Office/Head Office.
(iii) When a credit or debit card is used to effect money transfer, necessary information
as (i) above should be included in the message.
iii) Exemptions
Interbank transfers and settlements where both the originator and beneficiary are banks or financial
institutions would be exempted from the above requirements.
iv) Role of Ordering, Intermediary and Beneficiary banks
(a) Ordering Bank
An ordering bank is the one that originates a wire transfer as per the order placed by its
customer. The ordering bank must ensure that qualifying wire transfers contain complete
originator information. The bank must also verify and preserve the information at least for a
period of ten years.
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(b) Intermediary bank
For both cross-border and domestic wire transfers, a bank processing an intermediary
element of a chain of wire transfers must ensure that all originator information accompanying
a wire transfer is retained with the transfer. Where technical limitations prevent full originator
information accompanying a cross-border wire transfer from remaining with a related
domestic wire transfer, a record must be kept at least for ten years (as required under
Prevention of Money Laundering Act, 2002) by the receiving intermediary bank of all the
information received from the ordering bank.
(c) Beneficiary bank
A beneficiary bank should have effective risk-based procedures in place to identify wire
transfers lacking complete originator information. The lack of complete originator information
may be considered as a factor in assessing whether a wire transfer or related transactions
are suspicious and whether they should be reported to the Financial Intelligence Unit-India.
The beneficiary bank should also take up the matter with the ordering bank if a transaction is
not accompanied by detailed information of the fund remitter. If the ordering bank fails to
furnish information on the remitter, the beneficiary bank should consider restricting or even
terminating its business relationship with the ordering bank.
4.11
CLOSURE OF ACCOUNTS
Where the branch is unable to apply appropriate KYC measures due to non-furnishing of information
and /or non-cooperation by the customer, it should consider closing the account or terminating the
banking/business relationship after issuing due notice to the customer explaining the reasons for
taking such a decision. Such decisions need to be taken at a reasonably senior level (Zonal Office).
4.12
PRESERVATION AND REPORTING OF CUSTOMER ACCOUNT INFORMATION
In terms of Section 12 of the Prevention of Money Laundering Act ( PMLA),2002 Banks are
required to comply with certain obligations in regard to preservation and reporting of
customer account information. Accordingly, Reserve Bank of India has directed the Banks to
put in place the systems/ procedures in respect of maintenance and preservation of
information, records of transactions and reporting thereof to the appropriate authority to
ensure compliance with the requirements of section 12 of the Act.
In compliance to the above directives, Branches/ Offices are advised to follow meticulously
the under noted systems/ procedures for maintenance and preservation of information,
records of transactions and reporting thereof to the appropriate authority.
1.
Maintenance of Records of Transactions
Proper record of the transactions prescribed under Rule 3 of PML Rules, 2005, should be maintained
as mentioned below :
A) All cash transactions of the value of more than rupees ten lakh or its equivalent in foreign
currency ;
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B) All series of cash transactions integrally connected to each other which have been valued
below rupees ten lakh or its equivalent in foreign currency where such series of
transactions have taken place within a month and the aggregate value of series of
transactions exceeds rupees ten lakh ;
Explanation - Integrally connected cash transactions referred to at (ii) above. The
following transactions have taken place in a branch during the month of April 2008:
Mode
Dr (in Rs.)
02/04/2008
Cash
5,00,000.00
3,00,000.00
6,00,000.00
07/04/2008
Cash
40,000.00
2,00,000.00
7,60,000.00
08/04/2008
Cash
4,70,000.00
1,00,000.00
3,90,000.00
10,10,000.00
6,00,000.00
Monthly
summation
Cr (in Rs.)
Balance (in Rs.)
BF - 8,00,000.00
Date
C) As per above clarification, the debit transactions in the above example are integrally
connected cash transactions because total cash debits during the calendar month
exceeds Rs. 10 lakhs [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated
01.07.2014 Point No. 2.24(a)]
D) All transactions involving receipts by non-profit organisations of value more than rupees
ten lakh or its equivalent in foreign currency [Ref: Government of India Notification dated
November 12, 2009- Rule 3,sub-rule (1) clause (BA) of PML Rules]
E) All cash transactions where forged or counterfeit currency notes or bank notes have been
used as genuine and where any forgery of a valuable security or a document has taken
place facilitating the transactions.
F) All suspicious transactions, whether or not made in cash and by way of :
(i) deposits and credits, withdrawals into or from any accounts in whatsoever name they
are referred to in any currency maintained by way of :
a) cheques including third party cheques, pay orders, demand drafts, banker’s cheques or
any other instrument of payment of money including electronic receipts or credits and
electronic payments or debits, or
b) travellers cheques, or
c) transfer from one account within the same banking company, financial institution and
intermediary, as the case may be, including from or to Nostro and Vostro accounts, or
d) any other mode in whatsoever name it is referred to.
(ii) credits or debits into or from any non-monetary accounts such as demat account,
security account in any currency maintained by the banking company, financial
institution and intermediary, as the case may be.
(iii) money transfer or remittances in favour of own clients or non-clients from India or
abroad and to third party beneficiaries in India or abroad including transactions on its
own account in any currency by any of the following : –
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(a) payment orders, or
(b) bankers cheques, or
(c) demand drafts, or
(d)
(e)
(f)
(g)
telegraphic or wire transfers or electronic remittances or transfers, or
internet transfers, or
automated clearing house remittances, or
lock box driven transfers or remittances, or
(h) remittances for credit or loading to electronic cards, or
(i) any other mode of money transfer by whatsoever name it is called;
(iv) loans and advances including credit or loan substitutes, investments and contingent
liability by way of :
(a) subscription to debt instruments such as commercial paper, certificate of deposits,
preferential shares, debentures, securitized participation, inter bank participation or any
other investments in securities or the like in whatever form and name it is referred to, or
(b) purchase and negotiation of bills, cheques and other instruments, or
(c) Foreign exchange contracts, currency, interest rate and commodity and any other
derivative instrument in whatsoever name it is called, or
(d) letters of credit, standby letters of credit, guarantees, comfort letters, solvency certificates
and any other instrument for settlement and/ or credit support;
(v) collection services in any currency by way of collection of bills, cheques, instruments
or any other mode of collection in whatsoever name it is referred to.
2. Information to be preserved
Branches/ Offices should maintain the following information in respect of transactions :
i)
the nature of the transactions;
ii)
the amount of the transaction and the currency in which it was denominated;
iii)
the date on which the transaction was conducted; and
iv)
the parties to the transaction.
3. Maintenance and Preservation of Records in respect of –
i)
Transactions in the customer’s account as detailed in Rule 3 of PML Rules,2005
Banks are required to maintain the records containing information of all transactions including the
records of transactions detailed in Rule 3 above. Maintenance and preservation of account
information should be done in a manner that the data can be retrieved easily and quickly
whenever required or when requested by the competent authorities. Further, in terms of PML
Amemdment Act 2012 notified on February 15, 2013, banks should maintain for at least five
years from the date of transaction between the bank and the client, all necessary records of
transactions, both domestic or international, which will permit reconstruction of individual
transactions (including the amounts and types of currency involved if any) so as to provide, if
necessary, evidence for prosecution of persons involved in criminal activity. [RBI Master Cir
DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.24(c)]
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ii) Identification of the customer and his address
Branches should ensure that records pertaining to the identification of the customer and his
address (e.g. copies of documents like passports, identity cards, driving licenses, PAN card, utility
bills etc.) obtained while opening the account and during the course of business relationship, are
properly preserved for at least five years after the business relationship is ended as required
under Rule 10 of the Rules ibid. The identification records and transaction data should be made
available to the competent authorities upon request. [RBI Master Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.24(c)]
iii) Complex, unusual transactions:
As advised earlier in chapter “Monitoring of transactions” branches are advised to pay special
attention to all complex, unusual large transactions and all unusual patterns of transactions, which
have no apparent economic or visible lawful purpose. It is further clarified that the background
including all documents/office records/memorandums pertaining to such transactions and purpose
thereof should, as far as possible, be examined and the findings at branch as well as Zonal
Office/Principal Officer level should be properly recorded. Such records and related documents
should be made available to help auditors in their day-to-day work relating to scrutiny of
transactions and also to Reserve Bank/other relevant authorities. These records are required to
be preserved for ten years as is required under PMLA, 2002.
In terms of Government of India Notification on amendment PML Rules and as circularized by RBI on
17.07.2014, it has been decided that banks may maintain records of the identity of clients, and
records in respect of transactions with its client referred to in rule 3 in hard or soft format.
4. Reporting to Financial Intelligence Unit-India (FIU-IND)
In terms of the PMLA rules, banks are required to submit the information relating to cash and
suspicious transactions and all transactions involving receipts by non-profit organisations of value
more than rupees ten lakh or its equivalent in foreign currency, to the Director, Financial
Intelligence Unit-India (FIU-IND) at the following address :
Director, FIU-IND
Financial Intelligence Unit-India
6th Floor, Hotel Samrat
Chanakyapuri
New Delhi-110 021
Website - http://fiuindia.qov.in/
It should be carefully noted that the reporting to FIU-IND will be made by the Principal
Officer only from Head Office. In no case the branches/ zonal offices should submit the
Suspicious Transaction Report (STR) to FIU-IND directly. Branches should submit the STR
to their respective zonal offices, who in turn will compile the position and submit the
consolidated report covering all the branches under the zone alongwith the reports (STR)
of each branch to Head Office in confidence. . [RBI Master Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.24(d)]
In order to comply with the government directives, reporting of transactions are made to FIU-IND
in the following manner :
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a) Cash Transaction Report (CTR)
Subsequent to migration of all branches to CBS, the Cash Transaction Reports (CTRs) covering
all transactions of the value of more than Rs.10 lakhs or its equivalent in foreign currency and all
series of cash transactions, integrally connected to each other and which have been valued below
Rs.10 lakhs or its equivalent in foreign currency and where such series of transactions have taken
place within a month and the aggregate value of such transactions exceeds Rs.10 lakhs or its
equivalent in foreign currency, is being generated centrally by CBS, Project Office.
The directions of FIU-IND for filing of CTR by the bank is appended :1) The CTR for each month should be submitted to FIOU-IND by 15th of the succeeding month.
2) While filing CTR, details of individual transactions below Rupees fifty thousand need not be
furnished.
3) CTR should contain only the transactions carried out by the bank on behalf of the
clients/customers, excluding transactions between the internal accounts of the bank.
4) In case of Cash Transaction Reports (CTR) compiled centrally by banks for the branches
having Core Banking Solution (CBS) at their central data centre level, banks may generate
centralised Cash Transaction Reports (CTR) in respect of branches under core banking
solution at one point for onward transmission to FIU-IND, provided :
a.
The CTR is to be generated in the format prescribed by FIU-IND
b.
A copy of the monthly CTR submitted on its behalf to FlU-lndia is available at the
concerned branch for production to auditors/inspectors, when asked for
c.
The instruction on ‘Maintenance of records of transactions’; ‘Information to be preserved’
and ‘Maintenance and Preservation of records’ as contained in Point No. 3 above
respectively are scrupulously followed by the branch. [RBI Master Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.25(a)]
In view of the directions of FIU-IND vide Point No. (3) above, branches/offices must desist
from making any cash transaction on behalf of the customers through BGL accounts viz.
Sundry, Suspense, Internal A/C etc. in violation of extant guidelines. Moreover, for opening and
operation of ‘Non-Customer Current Account’, branches/offices must follow the guidelines
strictly noted in Instruction Circular No. 12699/BPR Cell/2013-14/10 dated 08.10.2013, where
interalia the following action points are noted :a) Opening of current account not belonging to any individual or to any business entity (i.e. not a
customer account), should only be done after obtaining prior permission in writing from the
Head Office Finance & Accounts Department.
b) If such account is opened for bank’s internal purpose, it should be opened under product
category 49 (Allahabad Bank Internal account) which is mapped to Other Liability in CGL.
c) The permission will be accorded after satisfying the genuine need and reason for opening
such accounts for which permission is sought.
d) The request for permission and the approval by Head Office will be kept with the account
opening form as part of security documents.
[Instruction Circular No. 12699/BPR Cell/2013-14/10 dated 08.10.2013]
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b) Counterfeit Currency Report (CCR)
All cash transactions, where forged or counterfeit Indian currency notes or bank notes have been
used as genuine or where any forgery of valuable security or a document has taken place
facilitating the transactions should be reported by the Principal Officer to FIU-IND in the specified
format by 15th day of succeeding month of occurrence of such transactions (Counterfeit
Currency Report – CCR). [RBI Cir DBOD.AML.BC. No.26/14.01.001/2013-14 dated 17.07.2014]
[Govt. of India Notification dated 27.08.2013]
These cash transactions should also include transactions where forgery of valuable security or
documents has taken place and may be reported to Zonal Office/Head Office in plain text form.
In order to submit the Counterfeit Currency Report (CCR) by the bank within specified time
period to FIU-IND, the Branches/Currency Chests should submit the statement of such
transaction immediately through fax/e-mail directly to Head Office, AML & KYC cell on the
date of occurrence itself.
c) Suspicious Transaction Report (STR)
This report should contain all suspicious transactions whether or not made in cash, as already
elaborated hereinbefore under ‘Maintenance of Records of Transactions’. It is likely that in
some cases transactions are abandoned/ aborted by customers on being asked to give some
details or to provide documents. It is clarified that branches should report all such attempted
transactions in STRs, even if not completed by customers, irrespective of the amount of the
transaction.
As detailed in the chapter “Monitoring of Transactions” both transaction monitoring by
nodal officers at Zonal Offices and Offline transaction monitoring at branches should be
adopted for identifying suspicious transactions.
Branch Managers should use reasonable judgment in determining the suspiciousness of any
transaction and on being satisfied himself/ herself about the existence of a suspicious activity/
nature in the transaction will submit the report to their respective Zonal Office immediately in
the prescribed format along with the reasons for treating any transaction or a series of
transactions as suspicious. Such report should be submitted through e-mail/ fax without delay.
On receipt of such report from the branch the concerned Zonal Office will scrutinize the same and
send the report to the Principal Officer of the Bank without delay.
It may be mentioned here that suspicious transaction means a transaction, whether or not made
in cash, which to a person acting in good faith –
a) Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or
b) Appears to be made in circumstances of unusual or unjustified complexity ; or
c) Appears to have no economic rationale or bonafide purpose or
d) Gives rise to reasonable ground of suspicion that it may involve financing of the activities
relating to terrorism.
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Broad categories of reason for suspicion and examples of suspicious transactions are indicated as
under :
Reason Examples of suspicious transactions
Identity of client
False identification documents.
Identification documents which could not be verified within reasonable
time.
Accounts opened with names very close to other established business
identities.
Background of client
Suspicious background or links with known criminals.
Multiple accounts
Large number of accounts having a common account holder, introducer
or authorized signatory with no rationale.
Unexplained transfers between multiple accounts with no rationale.
Activity in accounts
Unusual activity compared with past transactions.
Sudden activity in dormant accounts.
Exercise caution while allowing operation in dormant/ inoperative
accounts.
Activity inconsistent with what would be expected from declared
business.
Nature of
Unusual or unjustified complexity.
transactions
No economic rationale or bonafide purpose.
Frequent purchases of drafts or other negotiable instruments with cash.
Nature of transactions inconsistent with what would be expected from
declared business.
Value of transactions
Value just under the reporting threshold amount (above rupees ten
lakh) in an apparent attempt to avoid reporting.
Value inconsistent with the client’s apparent financial standing.
The Suspicious Transaction Report (STR) is required to be furnished to FIU-IND by the Principal
Officer of the Bank within 7 days of arriving at a conclusion that any transaction, whether cash or
non-cash, or a series of transactions integrally connected are of suspicious nature. The Principal
Officer should record his reasons for treating any transaction or a series of transactions as
suspicious.
It should be ensured that there is no undue delay in arriving at such a conclusion once a suspicious
transaction report is received from a branch or any other office. Such report should be made available
to the competent authorities on request. However, it should be carefully noted that Branches
should not put any restrictions on operations in the accounts where an STR has been made.
Moreover, branches should keep the fact of furnishing of STR strictly confidential, as required
under PML Rules. It should also be ensured that there is no tipping off to the customer at any
level.
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d) Non-Profit Organisation Transaction Report (NTR)
The report of all transactions, whether cash or transfer, involving receipts by non-profit
organizations of value more than Rs.10 lakhs or its equivalent in foreign currency should be
submitted every month to the Director, FIU-IND by 15th of the succeeding month in the prescribed
format.
Explanation : Government of India Notification dated November 12, 2009- Rule 2 sub-rule (1)
clause (ca) defines Non-Profit Organization (NPO). NPO means any entity or organisation that is
registered as a trust or a society under the Societies Registration Act, 1860 or any similar State
legislation or a company registered under section 25 of the Companies Act, 1956.
Branches are advised to mark the non-profit organizations as defined above in the CBS
system for the existing accounts and also while opening new accounts.
The transactions of the NPOs are captured by CBS system on the basis of the customer type defined
in the account. Therefore the customer type of non-profit organizations such as Trusts, Clubs,
societies, associations etc. falling under the definition of Govt. of India notification should
necessarily be opened under the following customer types to enable the CBS system to
identify NPOs.
Sl. No.
Customer type code
Description
1.
2.
3.
4.
0208
0209
0210
0211
Non-Personal Trust
Non-Personal Clubs
Non-Personal Associations
Non-Personal NGO’s
Branches/offices are also advised to immediately make a review of existing non-profit organization
accounts with them and ensure to amend the customer type suitably for generation of the non-profit
organization reports from CBS system.
e) Cross-border Wire Transfer Report (CWTR)
With the amendments to Prevention of Money Laundering (PML) Rules, notified by the Government
of India vide Notification no. 12 of 2013 dated 27th August, 2013 and in terms of amended Rule 3,
every reporting entity is now required to maintain the records of all transactions including the records
of all cross border wire transfers of more than Rs.5 lakh or its equivalent in foreign currency,
where either the origin or destination of the fund is in India, in addition to the reports submitted
currently. In view of the above notification, Reserve Bank of India vide its communication dated March
28, 2014 has advised all the banks to submit report on Cross-border Wire Transfers to the FIU-India
through FINnet Gateway by 15th of the succeeding month.
FIU-IND in their publication of FAQs (Frequently Asked Questions), has clarified the nature of
transactions to be included in the CBWT report, brief of which are appended :
All transactions whether these are for Trade, Non trade or merchant are to be reported if it
involves cross border transfers and exceeds the threshold of rupees five lakh or its equivalent
in foreign currency.
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
Fund settlement transactions between banks via SWIFT message are also to be included
under cross border wire transfers report.

Bank has to follow the first-in/last-out principle for the obligations regarding the reporting. The
first bank which receives the inward remittance, whether for its own customer or acting as
intermediary for the customer of other bank, has to file the report. Similarly the last bank which
sends out the remittance whether for its own customer or acting as intermediary for the
customer of other bank has to file the report.

If the values of each transaction for use of Credit cards / Debit cards / Pre-paid cards/ Travel
cards in foreign country / foreign currency are more than Rupees five lakh or its equivalent in
foreign currency where either the origin or destination is in India, then it will form part of the
report.

In case bank receives a single inward remittance of more than Rs.5 lakh where the credit
needs to be applied to multiple beneficiaries, the same needs to be reported and the details of
all the recipients should be mentioned in the receiver part of the report.
 Foreign currency purchased and sold through a branch is not to be included in the report
[Govt. of India Notification No. 12/2013 dated 27.08.2013], [RBI Cir. No. DBOD. AML No.
16415/14.01.001/2013-14 dated March 28, 2014], [FIU-IND publication of FAQs on CWTR]
5
Procedures to be followed for submission of the reports
In terms of Rule 8, while furnishing of information to the Director FIU-IND, delay of each day in not
reporting a transaction or delay of each day in rectifying a misrepresented transaction beyond the
time limit as specified in this rule shall constitute a separate violation. [RBI Cir DBOD.AML.BC.
No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of India Notification dated 27.08.2013]
Therefore, while submitting the reports to Head Office, the branches/ zonal offices should carefully
follow the under noted guidelines/ procedures :
The branches should submit the suspicious transaction in manual format whenever detected
at their end.

Utmost confidentiality should be maintained in filing of STR to FIU-IND. The reports are to be
transmitted by speed/ registered post, fax, e-mail at the notified address. Accordingly, the
branches/ zonal offices are also advised to maintain confidentiality in submitting the STR to
the Principal Officer of the Bank.

The guidelines are issued under Section 35A of the Banking Regulation Act, 1949 and Rule 7
of Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information
and Verification and Maintenance of Records of the Identity of the Clients of the Banking
Companies, Financial Institutions and Intermediaries) Rules, 2005. Any contravention
thereof or non-compliance shall attract penalties. Hence, the branches/ zonal offices
are advised to comply with the guidelines in letter and spirit and ensure submission of
Suspicious Transaction Report (STR) strictly in terms of the stipulated time period, as
aforesaid.
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4.13 ROLES AND RESPONSIBILIITIES OF BANK OFFICERS/EMPLOYEES
Bank officers/employees will conduct themselves in accordance with the highest ethical standards
and in accordance with the extant regulatory requirements and laws. They should not knowingly
provide advice or other assistance to individuals who are indulging in laundering activities.
Bank officers/employees who suspect money-laundering activities should refer the matter to
appropriate authority.
Bank officers/employees should not indulge in unnecessary dialogue or provide unwanted guidance
to the customers / intended customers to avoid dispute of any kind in future.
Failure to adhere to KYC / Money Laundering policies / procedures may subject bank employees to
appropriate disciplinary action or such penal actions and penalties that may be stipulated under any
law or regulatory directive.
In general terms there are FIVE golden rules to be followed :
Rule Description Number
1. You MUST NOT assist anyone whom you know or suspect to be laundering money that has
been derived from any serious crime.
2. You MUST report any transaction which you suspect might be related to drugs, terrorism or
other serious crimes.
3. You MUST NOT reveal in any way to anyone that a customer is being investigated or that
they have been the subject of a report except your Branch Manager and controlling
authorities.
4. You MUST NOT go overboard in seeking information for KYC compliance and thereby
invading into client’s privacy.
5. You MUST NOT divulge customer information for cross selling or any other like purposes.
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Chapter -5
Risk Management
Our bank has established an effective KYC programme by approving appropriate systems and
procedures. It covers proper management oversight, systems and controls, segregation of duties,
training and other related matters. Responsibility is explicitly allocated within the bank for ensuring
that the bank's policies and procedures are implemented effectively. Bank has devised procedures
for creating risk profiles of existing and new customers, assess risk in dealing with various countries,
geographical areas and also the risk of various products, services, transactions, delivery channels,
etc. Bank’s policies are in place for effectively managing and mitigating risks adopting a risk-based
approach.
Internal audit and compliance functions have an important role in evaluating and ensuring adherence
to the KYC policies and procedures. As a general rule, the compliance function should provide an
independent evaluation of the bank’s own policies and procedures. Concurrent/Internal Auditors
should specifically check and verify the application of KYC procedures at the branches and comment
on the lapses observed in this regard. The compliance in this regard is put up before the Audit
Committee of the Board on quarterly intervals.
[RBI Master
Cir DBOD.AML.BC.
No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.15]
5.1 Duties/Responsibilities of staff/officers
The following duties/responsibilities arising to the staff/officer out of the KYC guidelines.
Staff/Officer/Branch Manager vested with the authority to open new accounts
 To interview the potential customers intending to open account.
 To verify the introductory reference/ customer profile.
 To arrive at threshold limit for each account and to exercise due diligence in identifying
suspicious transactions.
 To ensure against opening of account in the names of terrorist/banned organisations.
 To adhere with the provisions of Foreign Contribution Regulation Act, 1976.
 To comply with the guidelines issued by the Bank from time to time in respect of opening
and conduct of account.
Branch Manager
To scrutinize and satisfy himself the information furnished in the Account opening form/customer
Profile/threshold limit are in strict compliance with KYC Guidelines before authorizing Opening of
account.
Zonal Office/FGM Office/Head Office
Prompt reporting of information regarding suspicious transactions to concerned law enforcing
Authority in consultation with Head Office.
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Nodal Officers
Every FGM Office and Zonal office will identify and nominate a Nodal Officer (not less than the rank
of a Chief Manager) for implementation of KYC and AML norms including monitoring of suspicious
transaction. The Nodal Officer so identified should have sufficient experience in operational banking
and working computer knowledge.
The indicative roles and responsibilities are appended:

To coordinate all operational issues related to AML & KYC.

To keep field functionaries abreast of AML & KYC matters like off-line alert monitoring for picking
up suspicious transactions for reporting under STR, proper marking of each account with
occupation and activity code.

To arrange for submission of KYC particulars as and when demanded by higher office.

To ensure that no account exists with junk/ invalid PAN.

To verify all cash transactions in a month of `1.00 crore and above (furnished by us) to ascertain
genuineness of transactions regarding business activities of the customers and decide as to
whether any suspicious transaction report needs to be submitted for these accounts.

To follow-up concurrent audit report (Annexure-SR2) for 100% rectification of KYC irregularities to
ensure no carryover of same account in the next concurrent audit report.
 Any other issues related to AML & KYC norms.
[Bank’s guidelines issued on 07.07.2014]
Concurrent auditors wherever posted
To verify and record comments on the Effectiveness of measures taken by Branches/level of
implementation of KYC guidelines.
Inspecting Officer of the Bank
The Inspecting Officers while inspecting the branches should check the status of compliance on
KYC & AML Norms and arrange for rectification of deficiencies/shortcomings, if any.
5.2 Management of Customer Risk Profile
While full details about the customers can be available in the respective account opening form,
additional information commensurate with the assessment of the money laundering risks should also
be obtained through interview/ discussion with the customer.
As discussed in Chapter - 4 (Monitoring of Transactions) Branches should maintain “Customer
Risk Profile” (Appendix – XII) both for new as well as existing customers. Branch Manager/ Officers
should be vigilant when customers conduct banking transactions and determine realistically the
transactions that are unusual and potentially fraudulent. Necessary steps to be taken as and when
there is a suspicion in any transaction. Branch should send a report to higher authority for the
transactions that are of suspicious nature.
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5.3 Evaluation of KYC Guidelines by Internal Audit and Inspection System
The Concurrent Auditor of the branches and Inspecting Officials while conducting audit / inspection of
the branches / offices should verify compliance of the KYC guidelines and prevention of money
laundering at branches and report the cases of deviations, if any, in the report.
5.4 Training to Staff Members
Since training system plays a crucial role in manifestation of policy guidelines, training inputs on
implementation of KYC policies should form an integral part of structured training modules/ syllabus
so that staff are adequately trained for their role and responsibilities as appropriate to their
hierarchical level. The training programme should have different focus on frontline staff, compliance
staff and staff dealing with new customers. All concerned officers/ staff members should fully
understand the rationale behind the KYC policies and implement them consistently.
5.5 Retention of Records
Record keeping is to be done as per Bank’s Record Maintenance Policy.
5.6 Customer Education
In the course of compliance of KYC guidelines, certain information from customers are required by
the Bank which may be of personal nature or which has hitherto never been called for. This can
sometimes lead to a lot of questioning by the customers as to the motive and purpose of collecting
such information. To educate the public/ customers of the objectives of KYC programme specific
literature/ pamphlets etc. will be prepared by the Bank. The front desk staff will be specially trained to
handle such situations while dealing with the customers.
5.7 Introduction of New Technologies - Credit cards/ Debit cards/ Smart cards etc.
Branches should pay special attention to any money laundering threats that may arise from new or
developing technologies including internet banking that might favour anonymity, and take measures,
if needed, to prevent their use in money laundering schemes. Bank is engaged in the business of
issuing Electronic Cards that are used by customers for buying goods and services, drawing cash
from ATMs, and can be used for electronic transfer of funds.
Branches/offices is required to ensure full compliance with all KYC/AML/CFT guidelines issued from
time to time, in respect of add-on/ supplementary cardholders also. Further, marketing of credit cards
is generally done through the services of agents. Bank should ensure that appropriate KYC
procedures are duly applied before issuing the cards to the customers. If agents are employed for
marketing of these cards, KYC measures should be applied to agents also. [RBI Master Cir
DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No. 2.16]
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5.8 KYC for the Existing Accounts
While the revised KYC guidelines will apply to all new customers, the same will also be applied to all
existing customer accounts on the basis of materiality and risk. Transactions in existing accounts
should be continuously monitored and any unusual pattern in the operation of the account should be
reviewed on customer due diligence measures.
Term/ recurring deposit accounts or accounts of similar nature will be treated as new accounts at the
time of renewal and revised KYC procedures should be applied meticulously.
Where the branches were unable to apply KYC measures due to non-furnishing of information / noncooperation by the customers, their accounts will remain blocked/freezed after issuing due notice to
the customers explaining the reasons for taking such a decision and when such customers approach
bank for transaction etc., then KYC norms be complied with. However, prior approval must be taken
from zonal office before closure of the account.
5.9 Applicability to Branches and Subsidiaries Outside India
The revised KYC guidelines shall also apply to the branches and majority owned subsidiaries located
abroad, especially, in countries, which do not or insufficiently apply the FATF Recommendations, to
the extent local laws permit. When local applicable laws and regulations prohibit implementation of
these guidelines, the same should be brought to the notice of Head Office and in turn to Reserve
Bank of India.
5.10 Designated Director
Bank is required to nominate a Director on their Boards as “Designated Director”, as per the
provisions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (Rules), to
ensure overall compliance with the obligations under the Act and Rules. The name, designation and
address of the Designated Director is to be communicated to the Director, Financial Intelligence Unit India (FIU-IND). [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point
No. 2.23(a)] [Govt. of India Notification dated 27.08.2013]
Designated Director" means a person designated by the reporting entity to ensure overall compliance
with the obligations imposed under chapter IV of the Act and the Rules and includes :(i)
the Managing Director or a whole-time Director duly authorized by the Board of Directors if the
reporting entity is a company,
(ii)
the managing partner if the reporting entity is a partnership firm,
(iii)
the proprietor if the reporting entity is a proprietorship concern,
(iv)
the managing trustee if the reporting entity is a trust,
(v)
a person or individual, as the case may be, who controls and manages the affairs of the
reporting entity if the reporting entity is an unincorporated association or a body of individuals,
and
(vi)
such other person or class of persons as may be notified by the Government if the reporting
entity does not fall in any of the categories above.
Explanation. - For the purpose of this clause, the terms "Managing Director" and "Whole-time
Director" shall have the meaning assigned to them in the Companies Act, 1956 (1 of 1956).
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In addition, it shall be the duty of every reporting entity, its Designated Director, officers and
employees to observe the procedure and manner of furnishing and reporting information on
transactions referred to in Rule 3.
[RBI Cir DBOD.AML.BC. No.26/14.01.001/2013-14 dated 17.07.2014] [Govt. of India Notification
dated 27.08.2013]
5.11 Principal Officer
Bank should appoint a senior management officer to be designated as Principal Officer. Bank should
ensure that the Principal Officer is able to act independently and report directly to the senior
management or to the Board of Directors. Principal Officer shall be located at the head/corporate
office of the bank and shall be responsible for monitoring and reporting of all transactions and sharing
of information as required under the law. He will maintain close liaison with enforcement agencies,
banks and any other institution which are involved in the fight against money laundering and
combating financing of terrorism Further, the role and responsibilities of the Principal Officer should
include overseeing and ensuring overall compliance with regulatory guidelines on KYC/AML/CFT
issued from time to time and obligations under the Prevention of Money Laundering Act, 2002, rules
and regulations made thereunder, as amended form time to time. The Principal Officer will also be
responsible for timely submission of CTR, STR and reporting of counterfeit notes and all transactions
involving receipts by non-profit organisations of value more than Rupees Ten Lakh or its equivalent in
foreign currency to FlU-IND.With a view to enabling the Principal Officer to discharge his
responsibilities effectively, the Principal Officer and other appropriate staff should have timely access
to customer identification data and other CDD information, transaction records and other relevant
information. . [RBI Master Cir DBOD.AML.BC. No.22/14.01.001/2013-14 dated 01.07.2014 Point No.
2.23(b)]
5.12 Penalty for Non-Adherence of KYC norms
Violation of essential safeguards and laid down procedures in opening and operations of deposit
accounts and non-compliance of KYC norms by the branch staff / officials and for lapses or
connivance in perpetrating irregularities/fraudulent operations in accounts would attract punitive
action against them.
Zonal Heads while visiting the branches should invariably check as to whether the KYC guidelines
are strictly followed by the Branches. In case of deviation, all requisite steps should be taken to rectify
the shortcomings under close monitoring.
The information collected from the customer for the purpose of opening of account should be
treated as confidential and any details thereof should not be divulged for cross selling or any
other purposes. Branches should, therefore, ensure that information sought from the
customer is relevant to the perceived risk, is not intrusive, and is in conformity with the
guidelines issued in this regard. Any other information from the customer should be sought
separately with his/ her consent and after opening the account.
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Appendix – 1
Indicative list of High/Medium Risk Customers
Characteristics of High Risk Customers
1. Individuals and entities listed in various United Nations Security Council Resolutions (UNSCRs)
such as UN 1267 etc.
2. Individuals or entities listed in the schedule to the order under section 51A of the Unlawful
Activities (Prevention) Act, 1967 relating to the purposes of prevention of, and for coping with
terrorist activities.
3. Individuals or entities in watch lists issued by Interpol and other similar international organizations.
4. Customers with dubious reputation as per public information available or commercially available
watch lists.
5. Individuals and entities specifically identified by regulators, FIU and other competent authorities
as high risk.
6. Customers conducting their business relationship or transactions in unusual circumstances such
as significant and unexplained geographic distance between the institution and the location of
the customer, frequent and unexplained movement of accounts to different institutions, frequent
and unexplained movement of funds between institutions in various geographic locations etc.
7. Customers based in high risk countries / jurisdictions or locations
8. Politically exposed persons (PEPs) of foreign origin, customers who are close relatives of PEPs
and accounts of which a PEP is the ultimate beneficial owner.
9. Non-resident customers and foreign nationals.
10. Embassies/consulates
11. Off-shore (foreign) corporation/business
12. Non face-to-face customers
13. High net worth individuals
14. Firms with “Sleeping partners”
15. Companies having close family shareholding or beneficial ownership
16. Complex business ownership structures, which can make it easier to conceal underlying
beneficiaries, where there is no legitimate commercial rationale.
17. Shell companies which have no physical presence in the country in which it is incorporated. The
existence simply of a local agent or low level staff does not constitute physical presence.
18. Investment Management/ Money Management Company/ Personal Investment Company
19. Accounts for “gatekeepers” such as accountants, lawyers or other professionals for their clients
where the identity of the underlying client is not disclosed to the financial institution.
20. Client Accounts managed by professional service providers such as law firms, accountants,
agents, brokers, fund managers, trustees, custodians etc.
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21. Trusts, charities, NGOs/Non- Profit Organisations (NPOs) (Especially those operating on a
“cross-border” basis) unregulated clubs and organizations receiving donations (excluding
NPOs/NGOs promoted by United Nations or its agencies)
22. Money Service Business: including seller of : Money Orders/ Travelers’ Checks/ Money
Transmission/ Chek Cashing/ Currency Dealing or Exchange
23. Business accepting third party cheques (except Super markets or retail stores that accep payroll
cheques/ cash payroll cheques)
24. Gambling/ Gaming including “Junket Operators” arranging gambling tours.
25. Dealers in high value or precious goods (e.g. Jewel, gem and precious metals dealers, art and
antique dealers and auction houses, estate agents and real estate brokers)
26. Customers engaged in business which is associated with higher levels of corruption (e.g. arms
manufacturers, dealers and intermediaries.)
27. Customers engaged in industries that might relate to nuclear proliferation activities or explosives.
28. Customers that may appear to be Multi level marketing companies etc.
Characteristics of Medium Risk Customers
1. Non-Bank Financial Institution
2. Stock brokerage
3. Import/Export
4. Gas Station
5. Car/Boat/ Plane dealership
6. Electronics (wholesale)
7. Travel Agency
8. Used Car sales
9. Telemarketers
10. Providers of telecommunications service, internet café, IDD call service, phone cards, phone
center
11. Dot-com company or internet business
12. Pawn shops
13. Auctioneers
14. Cash intensive business such as restaurants, retail shops, parking garages, fast food stores,
movie theaters etc.
15. Sole Practitioners or Law Firms (small, little known)
16. Notaries (small, little known)
17. Secretarial Firms (small, little known)
18. Accountants (small, little known firms)
19. Venture Capital companies
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Indicative List of High/Medium risk Products & Services
1. Electronic funds payment services such as Electronic cash (e.g. stored value and payroll cards)
Fund transfers (domestic and international) etc.
2. Electronic banking
3. Private banking (domestic and international)
4. Trust and asset management services
5. Monetary instruments such as Travelers’ Cheque
6. Foreign Correspondent accounts
7. Trade Finance (such as letter of credit)
8. Special use of concentration accounts
9. Lending activities, particularly loans secured by cash collateral and marketable securities
10. Transactions undertaken for non-account holders (occasional customrs)
11. Provision of safe custody and safety deposit boxed
12. Currency Exchange transactions
13. Project financing of sensitive industries in high risk jurisdictions
14. Trade Finance services and transactions involving high risk jurisdictions
15. Services offering anonymity or involving third parties
16. Services involving banknote and precious metal trading and delivery
17. Services offering cash, monetary or bearer instruments; cross-border transactions, etc.
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Indicative List of High/Medium risk Geographies
Countries/Jurisdictions
2. Countries subject to sanctions, embargoes or similar measures in the United Nations Security
Council Resolutions (UNSCR)
3. Jurisdictions identified in FATF public statement as having substantial money laundering and
terrorist financing (ML/TF) risks (www.fatf-gafi.org)
4. Jurisdictions identified in FATF public statement with strategic AML/CFT deficiencies (www.fatfgafi.org)
5. Tax havens or countries that are known for highly secretive banking and corporate law practices
6. Counties identified by credible sources as lacking appropriate AML/CFT laws, regulations and
other measures.
7. Countries identified by credible sources as providing funding or support for terrorist activities that
have designated terrorist organizations operating within them
8. Countries identified by credible sources as having significant levels of criminal activity
9. Countries identifies by the bank as high risk because of its prior experiences, transaction history
or other factors (e.g. legal considerations, or allegations of official corruption)
Locations
1. Locations within the country known as high risk for terrorist incidents or terrorist financing
activities ( e.g. sensitive locations/ cities and affected districts)
2. Locations identified by credible sources as having significant levels of criminal, terrorist, terrorist
financing activity.
3. Locations identified by the bank as high risk because of its prior experiences, transaction history
or other factors.
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Appendix – II
Customer Identification Procedure
Features to be verified and documents that may be obtained from customers
Features
Documents
Accounts of individuals
(i) Passport (ii) Permanent Account Number (PAN) card
- Proof of Identity
(iii) Voter’s Identity Card issued by Election Commission
- Proof of Address
of India (iv)Driving License (v) Job Card issued by
NREGA duly signed by an officer of the State Govt. (vi)
The letter issued by the Unique Identification Authority
of India (UIDAI) containing details of name, address and
Aadhaar number (vii) Any other document as notified by
the Central Government in consultation of regulator.
[The discretion given to banks earlier stands
withdrawn]
* [Accept NREGA Job Card as an ‘officially valid
document’ for opening of bank accounts without the
limitations applicable to ‘Small Accounts’]
[Consequent upon Government of India Notification
on “Prevention of Money-Laundering (Maintenance of
Records)
Amendment
Rules,
2013”
(Rules),
published in the extraordinary official gazette vide
G.S.R. No. 576 (E) dated August 27, 2013, and
subsequent RBI circular dated 17.07.2014, definition
of ‘Officially valid Documents’ has been changed and
henceforth, only the documents mentioned in the
revised PML Rules, noted above, would be accepted
for opening of accounts of individuals. Banks would
not have the discretion to accept any other document
for this purpose]
Accounts of companies
- Name of the company
- Principal place of business
- Mailing address of the company
- Telephone/Fax Number
a) Certificate of incorporation;
b) Memorandum and Articles of Association;
c) A resolution from the Board of Directors and
power of attorney granted to its managers, officers
or employees to transact on its behalf; and
d) An officially valid document in respect of
managers, officers or employees holding an
attorney to transact on its behalf, as noted in Point
No. 3.1(o), Chapter - 3 above
Accounts of partnership firms
- Legal name
- Address
- Names of all partners and their
addresses
- Telephone numbers of the firm and
partners
a) Registration certificate;
b) Partnership deed; and
c) An officially valid document in respect of the
person holding an attorney to transact on its
behalf.
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Features
Documents
Accounts of trusts & foundations
a) Registration certificate;
- Names of trustees, settlors,
b) Partnership deed; and
beneficiaries and signatories
c) An ‘Officially valid document’ in respect of the
Names and addresses of the
person holding an attorney to transact on its
founder, the managers/ directors
behalf, as noted in Point No.3.1(o), Chapter-3
and the beneficiaries
above
- Telephone/fax numbers
Accounts
of
Un-incorporated a) Resolution of the managing body of such association
Association or Body of Individuals
or body of individuals;
b) Power of attorney granted to him to transact on its
behalf;
c) An officially valid document in respect of the person
holding an attorney to transact on its behalf; and
d) Such information as may be required by the bank to
collectively establish the legal existence of such an
association or body of individuals.
Juridical Person
It should be verified that any person purporting to act on
behalf of such client is so authorized and verify the
identity of that person
Accounts of Proprietorship
concerns
- Proof of the name, address and
activity of the concern
•
•
•
•
•
•

Registration certificate (in the case of a registered
concern)
Certificate/license issued by the Municipal authorities
under Shop & Establishment Act,
Sales and income tax returns
CST/VAT certificate
Certificate/registration document issued by Sales
Tax/Service Tax/Professional Tax authorities
License issued by the Registering authority like
Certificate of Practice issued by Institute of Chartered
Accountants of India, Institute of Cost Accountants of
India, Institute of Company Secretaries of India,
Indian Medical Council, Food and Drug Control
Authorities, registration/licensing document issued in
the name of the proprietary concern by the Central
Government or State Government Authority/
Department, IEC (Importer Exporter Code) issued to
the proprietary concern by the office of DGFT, etc.
The complete Income Tax return (not just the
acknowledgement) in the name of the sole proprietor
where the firm's income is reflected, duly
authenticated/ acknowledged by the Income Tax
Authorities.
(These documents should be in the name of the
proprietary concern.)
Apart from the above documents, the “Officially Valid
Documents”, as noted in Point No. 3.1(o), Chapter-3
above must be obtained
Consolidated guidelines on KYC norms and AML measures
Page 75 of 122
The Branches should ask their customers to establish their identity (true name, residential and
mailing address). This may be done with the help of certain official documents “in original.” The
verifying official, at the time of opening the account must scrutinize the documents submitted with
their original and certify the KYC documents through seal as “Verified from original” and put his
signature, name & PF number below his official signature.
No photocopies of Driving License/ Passport etc. should be relied upon
Consolidated guidelines on KYC norms and AML measures
Page 76 of 122
Appendix-III
Foreign Portfolio Investors (FPIs) categorized by SEBI
Category
I.
Eligible Foreign Investors
Government and Government related foreign investors such as
Foreign Central Banks, Governmental Agencies, Sovereign
Wealth Funds, International/ Multilateral Organizations/
Agencies.
II.
a)
Appropriately regulated broad based funds such as Mutual Funds,
Investment Trusts, Insurance /Reinsurance Companies, Other
Broad Based Funds etc.
b)
Appropriately regulated entities such as Banks, Asset
Management Companies, Investment Managers/ Advisors,
Portfolio Managers etc.
c)
Broad based funds whose investment manager is appropriately
regulated.
d)
University Funds and Pension Funds.
e)
University related Endowments already registered with SEBI as
Fll/Sub Account.
III.
All other eligible foreign investors investing in India under PIS
route not eligible under Category I and II such as Endowments,
Charitable Societies/Trust, Foundations, Corporate Bodies,
Trusts, Individuals, Family Offices, etc.
Consolidated guidelines on KYC norms and AML measures
Page 77 of 122
Appendix-IV
KYC documents prescribed by RBI for FPIs
FPI Type
Document Type
Category-I
Category-II
Entity Level
Constitutive
Mandatory
Mandatory
Documents
(Memorandum
and Articles of
Association,
Certificate of
Incorporation etc.)
Proof of
Mandatory
Mandatory
Address
(Power of
(Power of
Attorney {PoA}
Attorney {PoA}
mentioning the
mentioning the
address is
address is
acceptable as
acceptable as
address proof)
address proof)
PAN Card
Mandatory
Mandatory
Financial Data
Exempted *
Exempted *
SEBI Registration
Mandatory
Mandatory
Certificate
Board Resolution
Exempted *
Mandatory
Senior
List
Mandatory
Mandatory
Management
Proof of
Exempted *
Exempted *
(Whole Time
Identity
Directors/
Partners/
Trustees /
etc.)
Proof of Address
Exempted *
Exempted *
Authorized
Signatories
Ultimate
Beneficial
Owner
(UBO)
*
Photographs
List and
Signatures
Proof of Identity
Proof of Address
Exempted
Mandatory - list
of Global
Custodian
signatories can
be given in case
of PoA to Global
Custodian
Exempted *
Exempted *
Exempted
Mandatory - list
of Global
Custodian
signatories can
be given in case
of PoA to Global
Custodian
Exempted *
Exempted *
Photographs
List
Proof of Identity
Proof of Address
Exempted
Exempted *
Exempted *
Exempted *
Exempted
Photographs
Exempted
Exempted
Exempted *
Exempted *
Category-III
Mandatory
Mandatory
other than
Power of
Attorney
Mandatory
Mandatory
Mandatory
Mandatory
Mandatory
Entity declares*
on letter head full
name, nationality,
date of birth or
submits photo
identity proof
Declaration on
Letter Head *
Exempted *
Mandatory
Mandatory
Declaration on
Letter Head *
Exempted *
Mandatory
Mandatory
Declaration on
Letter Head *
Exempted *
Not required while opening the bank account. However, FPIs concerned may submit an
undertaking that upon demand by Regulators/Law Enforcement Agencies the relative
document/s would be submitted to the bank.
Consolidated guidelines on KYC norms and AML measures
Page 78 of 122
Appendix - V
Government of India
Ministry of Finance
(Department of Revenue)
Notification
th
New Delhi, the 16 December 2010
GSR ------ (E) – In exercise of the powers conferred by sub-section (1) read with clauses (h) (i), (j)
and (k) of sub-section (2) of Section 73 of the Prevention of Money-laundering Act, 2002 (15 of 2003),
the Central Government hereby makes the following amendments to the Prevention of Moneylaundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and
Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of
Records of the Identity of the Clients of the Banking Companies, Financial Institutions and
Intermediaries) Rules, 2005, namely:1. (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records of the
Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for
Furnishing Information and Verification and Maintenance of Records of the Identity of the
Clients of the Banking Companies, Financial Institutions and Intermediaries) Third
Amendment Rules, 2010.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and
Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies,
Financial Institutions and Intermediaries) Rules, 2005, (a) in rule 2,(i) after clause (b), the following clause shall be inserted, namely:“(bb) “Designated Officer” means any officer or a class of officers authorized by a
banking company, either by name or by designation, for the purpose of opening small
accounts”.
(ii) in clause (d), for the words “the Election Commission of India or any other document as
may be required by the banking company or financial institution or intermediary”, the
words “Election Commission of India, job card issued by NREGA duly signed by an
officer of the State Government, the letter issued by the Unique Identification Authority of
India containing details of name, address and Aadhaar number or any other document
as notified by the Central Government in consultation with the Reserve Bank of India or
any other document as may be required by the banking companies, or financial
institution or intermediary” shall be substituted;
(iii) after clause (fa), the following clause shall be inserted, namely:“(fb) “small account” means a savings account in a banking company where(i) the aggregate of all credits in a financial year does not exceed rupees one lakh,
(ii) the aggregate of all withdrawals and transfers in a month does not exceed rupees
ten thousand, and;
(iii) the balance at any point of time does not exceed rupees fifty thousand”.
Consolidated guidelines on KYC norms and AML measures
Page 79 of 122
(b) In rule 9, after sub-rule (2), the following sub-rule shall be inserted, namely:“(2A) Notwithstanding anything contained in sub-rule (2), an individual who desires to open
a small account in a banking company may be allowed to open such an account on
production of a self-attested photograph and affixation of signature or thumb print, as the
case may be, on the form for opening the account.
Provided that –
(i) the designated officer of the banking company, while opening the small account, certifies
under his signature that the person opening the account has affixed his signature or
thumb print, as the case may be, in his presence;
(ii) a small account shall be opened only at Core Banking Solution linked banking company
branches or in a branch where it is possible to manually monitor and ensure that foreign
remittances are not credited to a small account and that the stipulated limits on monthly
and annual aggregate of transactions and balance in such accounts are not breached,
before a transaction is allowed to take place;
(iii) a small account shall remain operational initially for a period of twelve months, and
thereafter for a further period of twelve months if the holder of such an account provides
evidence before the banking company of having applied for any of the officially valid
documents within twelve months of the opening of the said account, with the entire
relaxation provisions to be reviewed in respect of the said account after twenty four
months.
(iv) a small account shall be monitored and when there is suspicion of money laundering or
financing of terrorism or other high risk scenarios, the identity of client shall be
established through the production of officially valid documents, as referred to in sub
rule ( 2) of rule 9"; and
(v) foreign remittance shall not be allowed to be credited into a small account unless the
identity of the client is fully established through the production of officially valid
documents, as referred to in sub-rule (2) of rule 9.”
(Notification No.14/2010/F.No.6/2/2007- ES)
(S.R. Meena)
Under Secretary
Note: The principal rules were published in Gazette of India, Extraordinary, Part-II, Section 3, Sibst
Section (i) vide number G.S.R.444 (E), dated the 1 July, 2005 and subsequently amended by
th
th
number G.S.R.717 (E), dated the 13 December, 2005, number G.S.R. 389(E), dated the 24 May,
th
2007, number G.S.R. 816(E), dated the 12 November, 2009, number G.S.R.76 (E), dated the 12
th
February, 2010 and number G.S.R. 508(E), dated the 16 June, 2010. 59
Consolidated guidelines on KYC norms and AML measures
Page 80 of 122
th
Appendix - VI
FINANCIAL INCLUSION
ALLAHABAD BANK
FOR INDIVIDUALS
VILLAGE/TOWN
DISTRICT
Please open an Account as per information given below.
First Applicant / Sole Applicant:
FULL NAME
Mr./Mrs./Ms
FATHER’S/
HUSBAND’S
NAME Mr.
MOTHER’S
NAME Mrs.
DATE OF BIRTH
First
D
D
M
STATE
(Please fill in CAPITAL Letters and Tick ( ) Appropriate Boxes )
Date:________________________________
Middle
M
Y
Y
Y
Y
Last
GENDER ( )
MOBILE No.
M
Housewife
F
Business
Service
Voter ID No.
OTHER
Aadhar No.
Others (Specify)
CATEGORY ( )
General
OBC
OPERATING
INSTRUCTIONS
( )
By
Me
RELEGION ( )
SC
Jointly By
Any Two
ST
Any of Us/
Survivor
Others
Former or
Survivor
Hindu
On behalf of Minor
by Guardian
Muslim
Sole/First
Applicant
Sikh
Christian
Others
PAN/GIR Number / Form 60/61 of First/Sole Applicant
Others
Specify
(Form 60/61 is to be filled by those who do not have PAN/GIR)
Permanent
Present
ADDRESS
Affix
Photograph
OCCUPATION ( )
Agriculturist
TEL. No.
Email ID
(www.allahabadbank.in)
Branch:
Code:
ACCOUNT OPENING-CUM-OVERDRAFT APPLICATION FORM
PIN
PIN
OTHER FACILITIES REQUIRED
Yes
No
S. No.
5.
S. No.
1.
Passbook
Particulars ( )
Particulars ( )
Rupay Card / Debit Card
2.
Statement of A/c through E mail/Post
6.
Internet Banking Facility
3.
Cheque Book
7.
Mobile Banking Facility
4.
Linking of Aadhar No./ Voter ID No. (If available)
8.
Nomination Facility
Yes
No
NOMINATION:
I nominate following person to whom in the event of my/minor’s death, the amount of deposit outstanding in the a/c, may be returned by you.
DEPOSIT
NOMIONEE
Nature of
Account No.
Additional
Name
Address
Relationship with
Age
Deposit
Details
Depositor
* DoB if
Minor
 Since
the
Nominee
is
a
minor
on
this
date,
I
appoint
Mr./Mrs./Ms__________________________________________Address__________________________________________________________________________________________________________,Age___________
_______to receive the amount of deposit on behalf of the nominee in the event of my/minor(s) death.
I agree to abide by the terms and conditions of the Bank Account of Allahabad Bank. .
Date
Place
Signature/^Thumb Impression of First/Sole Applicant
^ If the Depositor(s) put thumb impression (s) the same is are to be attested by two witness, otherwise it shall be attested by one witness
Witness 1
Name
Address
Signature
Witness 2
Name
Address
Signature
Above Particulars Verified
Name & Number of BC
Signature of Business Correspondent
=====================================================================================================================
APPLICATION FOR OVERDRAFT FACILITY:
I also request you to sanction me an Overdraft limit of `________________ `(_____________________________________________) for
meeting my emergency family needs. I shall abide by the terms and conditions stipulated by Bank in this regards. My Gross Annual Income
is `______________ from all sources. My main source of income is ` _______________
(Signature of the Applicant)
CUT HERE
------------------------------------------------------------
Nomination Registered
The
above
mentioned
---------------------------------------------
Branch
nomination
is
registered
at
Serial
No.
___________________
in
respect
of
(Type
of
A/c)---------Deposit
No._______________________
Consolidated guidelines on KYC norms and AML measures
Page 81 of 122
A/C
For Allahabad Bank
(Authorized Official with S.S. No.)
FINANCIAL INCLUSION
ALLAHABAD BANK
ACCOUNT OPENING-CUM-OVERDRAFT APPLICATION FORM
(www.allahabadbank.in)
Branch:
Code:
FOR INDIVIDUALS
KYC IDENTIFICATION DOCUMENTS/PAPERS SUBMITTED BY APPLICANT
(Any one document from each of the following two lists subject to Bank’s satisfaction)
LIST 1
Sl.
No.
LIST 2
Latest / Recent Documents showing
Identity Proof
( )
Tick
Sl.
No.
Latest / Recent Documents showing
Residence Proof
1.
Driving Licence with Photograph
1.
Driving Licence with Photograph
2.
MNREGA Job Card
2.
Telephone Bill, Electricity Bill, Ration Card
3.
Voter’s Identity Card
3.
4.
PAN Card, Government ID Card
4.
Bank Account Statement (With Address)
MNREGA Job Card
Any documentary evidence in support of residential address to the Bank
5.
Aadhar Card
5.
Aadhar Card, Voter Card
6.
Any Other document as per RBI Guidelines
6.
In case of Married Women, address proof of the groom is acceptable
( )
Tick
Details of Documents for Identification submitted by the Applicant:
INTRODUCTION (If Applicable) DETAILS OF THE INTRODUCER
Name
Address
CIF No.
Branch Name
Mobile No.
E Mail
Account No.
Type of A/c
Date of Opening of A/c
It is certified that Mr./Mrs./Ms._________________________________________________________ is known to me personally since last
__________ Months /Years and confirm the Occupation, Photograph and address in the application form for opening of account are correct
to the best of my /our knowledge and belief.
Date:
(Signature of the Introducer)
_____________________________________________________________________________________________________________________
Declaration / Certificate
I, Sri _______________________________S/o____________________________having SB A/c No._______________with you do hereby
declare/certify that Smt. _______________________is my bona fide and legal wife and that she is the leading female member of my
family.
Date
(Signature)
Name of the First/Sole Applicant
Mr./Mrs./Ms
FOR BANK’S USE ONLY
PROCESSING FOR OPENING OF ACCOUNT
CIF
ACCOUNT No.
ATM cum Debit Card Number
Rupay Card Number
Name, S.S. No. & Signature of Verifying Official
PROCESSING CUM SANCTION FOR OVER DRAFT FACILITY
Annual Income from various sources declared by the Applicant(s): `_____________________ ( `____________________________________________)
Details of Over Draft Sanctioned
Limit Sanctioned
` ( In Figures)
` (In Words)
Rate of Interest
% Above base Rate , Minimum
Period
12 Months
Documents Obtained
a. DP Note
% with Monthly Rests
b. Letter of continuing security to be signed by the Borrower
c.
d.
Consolidated guidelines on KYC norms and AML measures
Page 82 of 122
Recommended
Name, S.S. No. & Signature
------------------------------------------------------------
Sanctioned
Name, S.S. No. & Signature of Authorized Official
CUT HERE
Consolidated guidelines on KYC norms and AML measures
-------------------------------------------------
Page 83 of 122
Appendix -VII
ALERT SCENARIOS INDICATED BY IBA STUDY FOR
DETECTION OF SUSPICIOUS TRANSACTIONS
Sl
Code
1
WL1.1
Match with UN list
Match
of
customers
details
individuals/entities on various UNSCR lists.
2
WL1.2
Match with UAPA list
Match of customers details with designated
individuals/entities under UAPA.
Match with other TF list
Match of customers details with TF suspects of
Interpol,EU, OFAC, Commercial lists(World
check, Factiva, LexisNexis, Dun & Bradstreet
etc.) and other sources.
WL2.1
Match with other criminal list
Match of customers details with criminal lists of
Interpol, EU, OFAC, Commercial lists(World
check, Factiva, LexisNexis, Dun & Bradstreet
etc.) and other sources.
TM1.1
High value cash deposits in
a day
Cash deposits greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a day.Top[N] cash deposits in a day
High value cash withdrawals
in a day
Cash withdrawals greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a day.Top[N] cash withdrawals in a
day
TM1.3
High value non-cash
deposits in a day
Non-cash deposits greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a day.Top[N] non-cash deposits in
a day
TM1.4
High value non-cash
withdrawals in a day
Non-cash withdrawals greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a day.Top[N] non-cash withdrawals
in a day
TM2.1
High value cash deposits in
a month
Cash deposits greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a month.Top[N] cash deposits in a
month
TM2.2
High value cash withdrawals
in a month
Cash withdrawals greater than INR[X1] Cash
withdrawals greater than INR[X]for individuals
and greater than INR[X2] for non-individuals in a
month.Top[N] cash withdrawals in a month
3
4
5
6
7
8
9
10
WL1.3
TM1.2
Indicator
Rule/ Scenario
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Page 84 of 122
with
Sl
Code
Indicator
Rule/ Scenario
High value non-cash
deposits in a month
Non-cash deposits greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a month.Top[N] non-cash deposits
in a month
TM2.4
High value non-cash
withdrawals in a month
Non-cash withdrawals greater than INR[X1] for
individuals and greater than INR[X2] for nonindividuals in a month.Top[N] non-cash
withdrawals in a month
13
TM3.1
Sudden high value
transaction for the client
Value of transaction is more than[Z] percent of
previous largest transaction for the client(or client
profile)
14
TM3.2
Sudden increase in value of
transactions in a month for
the client
Value of transactions in a month is more than[Z]
percent of the average value for the client(or
client profile)
15
TM3.3
Sudden increase in number
of transactions in a month
for the client
Number of transactions in a month is more
than[Z] percent of the average number for the
client(or client profile)
16
TM4.1
High value transactions in a
new account
Transactions greater than INR[X] in newly
opened account within [Y] months
17
TM4.2
High activity in a new
account
Number of transactions more than[N] in newly
opened account within [Y] months
18
TM5.1
High value transactions in a
dormant account
Transactions greater than INR[X] in a dormant
account within [Y] days of reactivation
19
TM5.2
Sudden activity in a dormant
account
Number of transactions more than[N] in a
dormant account within [Y] days of reactivation
TM6.1
High value cash
transactions inconsistent
with profile
Cash transactions greater than INR[X] by
customer with low cash requirements such as
students, housewife, pensioner, salaried person,
wage earner and minor.
TM6.2
High cash activity
inconsistent with profile
Number of cash transactions greater than INR[X]
by customer with low cash requirements such as
students, housewife, pensioner, salaried person,
wage earner and minor.
TY1.1
Splitting of cash deposits
just below INR 10,00,000 in
multiple accounts in a
month.
Cash deposit in amounts ranging between INR
9,00,000 to INR 9,99,.999 in multiple accounts of
the customer greater than [N] times in a month.
11
12
20
21
22
TM2.3
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Page 85 of 122
Sl
Code
23
TY1.2
Splitting of cash deposits
just below INR 50,000
Deposit of cash in the account in amounts
ranging between INR 40,000 to INR 49,999
greater than [N] times in [Y] days
24
TY1.3
Frequent cash deposits just
below INR 10,00,000
Cash transactions in amounts ranging between
INR 9,00,000 to INR 9,99,.999 greater than [N]
times in [Y] days.
25
TY1.4
Routing of funds through
multiple accounts
Transactions greater than INR[X1] between more
than [N] accounts aggregating to more than [X2]
on the same day.
26
TY1.5
Frequent low cash deposits
Cash deposits in amounts ranging between
INR[X1] to [X2] greater than [N] times in [Y] days.
27
TY1.6
Frequent low cash
withdrawals
Cash withdrawals in amounts ranging between
INR[X1] to [X2] greater than [N] times in [Y] days.
28
TY2.1
Many to one fund transfer
29
TY2.2
One to many fund transfer
30
TY2.3
Routing of funds through
multiple locations
Routing of funds through multiple countries or
locations
31
TY3.1
Customer providing different
details to avoid linkage
Customer providing different IDs or date of birth
at different instances
TY3.2
Multiple customers working
together
Common address/telephone used by multiple
unrelated customers.Common ID used by
multiple
customers.Group
of
individuals
conducting transactions at the same time
TY4.1
Repeated small cash
deposits followed by
immediate ATM withdrawals
in different locations.
Cash deposit in amount ranging between INR[X1]
to INR[X2] greater than [N] times in [Y] days
followed by immediate ATM withdrawals in
different locations.
TY4.2
Repeated small value
transfers from unrelated
parties followed by
immediate ATM
withdrawals.
Account to account transfer (RTGS/NEFT) from
unrelated parties in amount ranging between
INR[X1] to INR[X2] greater than [N] times in [Y]
days followed by immediate ATM withdrawals
32
33
34
Indicator
Rule/ Scenario
Funds sent by more than [N] remitters to one
recipient.
Funds sent by one remitter for more than [N]
recipients.
Consolidated guidelines on KYC norms and AML measures
Page 86 of 122
Sl
35
36
37
Code
Indicator
Rule/ Scenario
TY4.3
Repeated small value
remittance from unrelated
parties followed by
immediate ATM withdrawls
Inward remittance(especially from high risk
countries) from unrelated parties in amount
ranging between INR[X1] to INR[X2] greater than
[N] times in [Y] days followed by immediate ATM
withdrawals(especially other bank’s ATM
TY4.4
Repeated small value
withdrawls in sensitive
locations
Cash withdrawl in amount ranging between
INR[X1] to INR[X2] greater than [N] times in [Y]
days in locations with known terrorist incidents
TY4.5
Repeated small value
inward remittances from
unrelated parties used for
specific activity
Inward remittance(especially from high risk
countries) used for purchase of communication
equipments, tickets, hotel booking etc.
Cash repayments greater than INR[X] amount in
cash in [Y] days
38
TY5.1
Majority of repayment in
cash
39
TY5.2
Large debit balance in credit
card
Debit balance in credit card is greater than
INR[X]
40
TY5.3
Large value card
transactions for purchase of
high value goods
Card used greater than INR[X] for jewellery
(MCC5944) in [Y] days.
41
TY5.4
Large value cash withdrawls
against international card.
Cash withdrawls greater than INR[X] against
international card in [Y] days.
42
TY5.5
Repeated small valur cash
withdrawls against
international card
Cash withdrawls against international card in
amount ranging between INR[X1] to INR[X2]
greater than [N] times in [Y] days in locations with
known terrorist incidents
43
TY5.6
Large repetitive card usage
by the same merchant.
More than [N] transactions at same merchant
aggregating to more than INR[X] in [Y] days.
44
TY7.1
Repayment of loan in cash
Loan repayments in cash greater than INR[X] in
[Y] months.
45
TY7.2
Premature closure of large
FDR through PO/DD
Premature closure of large FDR for amount
greater than INR[X1] within [N] days and
payment by PO/DD
46
TY7.3
High number of cheque
leaves
Greater than [X1] number of cheque leaves
issued for savings bank account and [X2] for
current account in a period of [Y] days.
Card repayment in cash is greater than [Z]
percent of repayments in [Y] days.
Consolidated guidelines on KYC norms and AML measures
Page 87 of 122
Sl
Code
47
TY7.4
Frequent locker operation
Number of locker operations greater than [X]
times in [Y] days.
48
RM1.1
High value transactions by
high risk customers
Transactions greater than INR[X] by high risk
customers
49
RM1.2
High value cash
transactions in NPO
Cash transactions greater
Trust/NGO/NPO in [Y] days.
50
RM1.3
High value cash
transactions related to real
estate
Cash transactions greater than INR[X] related to
real estate transactions in [Y] days
51
RM1.4
High value cash
transactions by dealer in
precious metal or stone
Cash transactions greater than INR[X] by dealer
in precious metal or stone or high value goods in
[Y] days
52
RM2.1
High value transactions in
product/services with high
ML risk
Transactions greater than INR[X]
product/services with high ML risk.
using
53
RM2.2
High value inward
remittance
Inward remittance greater
aggregated in [Y] days
value
54
RM2.3
Inward remittance in a new
account
Inward remittance greater than [X] value in a new
account within [Y] days
RM2.4
Inward remittance
inconsistent with client
profile
Inward remittance greater than [X] value in [Y]
days in account of students, housewife,
pensioner, salaried person, wage earner and
minor.
RM3.1
High value transactions with
a country with high ML risk
Transaction greater than INR[X] involving a
country considered to be high risk from the
money laundering or drug trafficking perspective.
RM3.2
High value transactions with
Tax Havens.
Transaction greater than INR[X] involving tax
havens or countries that are known for highly
secretive banking and corporate law practices
RM3.3
High value transactions in a
location with high ML risk
Transaction greater than INR[X] in a location
considered to be high risk from the money
laundering and drug trafficking perspective.
55
56
57
58
Indicator
Rule/ Scenario
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than
than
INR[X]
[X]
Page 88 of 122
in
Sl
Code
Indicator
Rule/ Scenario
59
RM4.1
Transactions involving a
country with high TF risk
Transactions involving a country considered to be
high risk from the terrorist financing perspective.
60
RM4.2
Transactions involving a
location with high TF risk
Transactions involving a location considered to
be high risk from the terrorist financing
perspective.
61
RM4.3
Transactions involving a
location with terrorist
incident.
Transactions involving a location prior to or
immediately after a terrorist incident
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Appendix -VIII
OFFLINE ALERT INDICATORS PROVIDED BY IBA STUDY
FOR DETECTION OF SUSPICIOUS TRANSACTIONS AT BRANCHES
Sl.
No.
Alert Indicator
Indicative Rule / Scenario
1
CV1.1-Customer left without
opening account
2
CV2.1- Customer offered false or
forged identification documents
3
WL2.2- Identity documents are not
verifiable
Customer did not open account after being informed
about KYC requirement
Customer gives false identification documents or
documents that appears to be counterfeited, altered or
inaccurate.
Identity documents presented are not verifiable, i.e.
foreign documents etc.
4
CV3.1- Address found to be non
existent
Address provided by the customer is found to be non
existent.
5
CV3.2- Address found to be wrong
Customer not staying at address provided during
account opening
6
CV4.2- Difficult to identify beneficial
owner
Customer uses complex legal structures or where it is
difficult to identify the beneficial owner.
7
LQ1.1- Customer is being
investigated for criminal offences
Customer has been the subject of enquiry from any
law enforcement agency relating to criminal offences.
8
LQ2.1- Customer is being
investigated TF offences
Customer has been the subject of enquiry from any
law enforcement agency relating to TF or terrorist
activities.
9
MR1.1- Adverse media report about
criminal activities of customer
Match the customer details with persons reported in
local media / open source for criminal offences.
10
MR2.1- Adverse media report about
TF or terrorist activities of customer
11
EI 1.1- Customer did not complete
transaction
Match the customer details with persons reported in
local media / open source for terrorism or terrorist
financing related activities.
Customer did not complete transaction after queries
such source of funds etc.
12
EI 2.1- Customer is nervous
Customer is hurried or nervous
13
EI 2.2- Customer is over cautious
Customer over cautious in explaining genuineness of
the transaction.
EI 2.3- Customer provides
inconsistent information
Customer changes the information provided after more
detailed information is required. Customer provides
information that seems minimal, possibly false or
inconsistent.
14
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Sl.
No.
15
Alert Indicator
EI 3.1- Customer acting on behalf of
a third party
Indicative Rule / Scenario
Customer has vogue knowledge about amount of
money involved in the transaction.
Customer taking instructions for conducting
transactions.
16
EI 3.2- Multiple customers working
as a group
Multiple customers arrive together but pretend to
ignore each other
17
EI 4.1- Customer avoiding nearer
branches
Customer travels unexplained distances to conduct
transactions.
18
EI 4.2- Customer offers different
identifications on different occasions
Customer offers different identifications on different
occasions with an apparent attempt to avoid linkage of
multiple transactions.
19
EI 4.3- Customer wants to avoid
reporting
Customer makes enquiries or tries to convince staff to
avoid reporting.
20
EI 4.4- Customer could not explain
source of funds
Customer could not explain source of funds
satisfactorily.
21
EI 5.1- Transaction is unnecessarily
complex
Transaction is unnecessarily complex for its stated
purpose.
22
EI 5.2- Transaction has no
economic rationale
The amount or frequency or the stated reason of the
transaction does not make sense for the particular
customer.
23
EI 5.3- Transaction inconsistent with
business
Transaction involving movement of which is
inconsistent with the customer’s business.
24
EI 6.1- Unapproved inward
remittance in NPO
Foreign remittance received by NPO not approved by
FCRA.
25
PC1.1- Complaint received from
public
Complaint received from public for abuse of account
for committing fraud etc.
26
BA1.1- Alert raised by agent
Alert raised by agents about suspicion.
27
BA1.2- Alert raised by other
institution
Alert raised by other institutions, subsidiaries or
business associates including cross-border referrals.
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Appendix - IX
AN INDICATIVE LIST OF SUSPICIOUS ACTIVITIES
Transactions Involving Large Amounts of Cash
a. Exchanging an unusually large amount of small denomination notes for those of higher
denomination.
b. Purchasing or selling of foreign currencies in substantial amounts by cash settlement despite the
customer having an account with the bank.
c. Frequent withdrawal of large amounts by means of cheques, including traveller’s cheques.
d. Frequent withdrawal of large cash amounts that do not appear to be justified by the customer’s
business activity.
e. Large cash withdrawals from previously dormant/inactive account or from an account, which has
just received an expected large credit from abroad.
f.
Company transactions, both deposits and withdrawals that are denominated by unusually large
amounts of cash, rather than by way of debits and credits normally associated with the normal
commercial operations of the company e.g. cheques, letters of credit, bills of exchange etc.
g. Depositing cash by means of numerous credit slips by a customer such that the amount of each
deposit is not substantial, but the total of which is substantial.
Transactions which do not make Economic Sense
i) A customer having a large number of accounts with the same bank, with frequent transfers between
different accounts.
ii) Transactions in which assets are withdrawn immediately after being deposited, unless the
customer’s business activities furnish a plausible reason for immediate withdrawal.
Activities not consistent with the Customer’s Business
h.
Corporate accounts where deposits or withdrawals are primarily in cash rather than cheques.
i.
Corporate accounts where deposits and withdrawals by cheque/telegraphic transfer/foreign
inward remittances/any other means are received from/made to sources apparently
unconnected with the corporate business activity/dealings.
j.
Unusual applications for DD/TT/PO against cash.
k.
Accounts with large volume of credits through DD/TT/PO whereas the nature of business
does not justify such credits.
l.
Retail deposit of many cheques but rare withdrawals for daily operations.
Attempts to avoid Reporting/Record keeping Requirements
i)
A customer who is reluctant to provide information needed for a mandatory report, to have the
report filed or to proceed with a transaction after being informed that the report must be filed.
ii) Any individual or group that coerces/ induces or attempts to coerce/ induce a bank employee not
to file any reports or any other forms.
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iii) An account where there are several cash deposits/withdrawals below a specified threshold level
to avoid filing of reports that may be necessary in case of transactions above the threshold level,
as the customer intentionally splits the transactions into smaller amounts for the purpose of
avoiding the threshold limit. Avoid splitting of cash deposit by non-PAN holders. Accept form
60/61 for applicable transactions, where PAN is not available.
iv) Multiple DDs purchased by purchasers against cash for total value exceeding Rs.50000 from a
particular branch on the same day favouring the same beneficiary. The mode of transactions
indicated possibility of structured transaction. Walk-in customers resort to structuring of a single
cash transaction in to a series of transactions below the threshold limit of Rs.50000 and
purchased multiple DDs in a single day.
v) In case of transactions carried out by a non-account based customer, that is a walk-in customer,
where the amount of transaction is equal to or exceeds Rs.50000, whether conducted as a single
transaction or several transactions that appear to be connected, the customer’s identity and
address should be verified. However, if a bank has reason to believe that a customer is
intentionally structuring a transaction in to a series of transactions below threshold limit of
Rs.50000, bank should verify identity and address of the customer and also consider filing a
suspicious transaction report (STR) to FIU-IND.
Unusual Activities
i) An account of a customer who does not reside/have office near the branch even though there are
bank branches near his residence/office.
ii) A customer who often visits the safe deposit area immediately before making cash deposits,
especially deposits just under the threshold level.
iii) Funds coming from the list of countries/centers which are known for money laundering.
Customer who provides Insufficient or Suspicious Information
i) A customer/company who is reluctant to provide complete information regarding the purpose of the
business, prior banking relationships, officers or directors, or its locations.
ii) A customer/ company who is reluctant to reveal details about its activities or to provide financial
statements.
iii) A customer who has no record of past or present employment but makes frequent large
transactions.
Certain Suspicious Funds Transfer Activities
i) Sending or receiving frequent or large volumes of remittances to/from countries outside India.
ii) Receiving large TT/DD remittances from various centers and remitting the consolidated amount to
a different account/center on the same day leaving minimum balance in the account.
iii) Maintaining multiple accounts, transferring money among the accounts and using one account as
a master account for wire/funds transfer.
Certain Suspicious Behavior of Employees
i) An employee whose lavish lifestyle cannot be supported by his or her salary.
ii) Negligence of employees/ willful blindness is reported repeatedly.
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Some examples of suspicious activities/ transactions to be monitored by the operating staff.

Large Cash Transactions

Multiple accounts under the same name

Frequently converting large amounts of currency from small to large denomination notes

Placing funds in term Deposits and using them as security for more loans

Large deposits immediately followed by wire transfer

Sudden surge in activity level

Same funds being moved repeatedly among several accounts

Multiple deposits of money orders, Banker’s Cheques, drafts of third parties

Transactions inconsistent with the purpose of the account

Maintaining a low or overdrawn balance with high activity
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Appendix -X
File No.17015/10/2002-IS-VI
Government of India
Ministry of Home Affairs
Internal Security-I Division
*****
New Delhi, dated 27th August, 2009
ORDER
Subject : Procedure for implementation of Section 51A of the Unlawful Activities
(Prevention)Act, 1967
The Unlawful Activities (Prevention) Act, 1967 (UAPA) has been amended and notified on
31.12.2008, which, inter-alia, inserted Section 51A to the Act. Section 51A reads as under:"51A. For the prevention of, and for coping with terrorist activities, the Central Government shall
have power to –
(a)
freeze, seize or attach funds and other financial assets or economic resources held by, on
behalf of or at the direction of the individuals or entities Listed in the Schedule to the Order, or
any other person engaged in or suspected to be engaged in terrorism;
(b)
prohibit any individual or entity from making any funds, financial assets or economic resources
or related services available for the benefit of the individuals or entities Listed in the Schedule
to the Order or any other person engaged in or suspected to be engaged in terrorism;
(c)
prevent the entry into or the transit through India of individuals Listed in the Schedule to the
Order or any other person engaged in or suspected to be engaged in terrorism",
The Unlawful Activities (Prevention) Act define "Order" as under :1.
"Order" means the Prevention and Suppression of Terrorism (Implementation of Security
Council Resolutions) Order, 2007, as may be amended from time to time.
In order to expeditiously and effectively implement the provisions of Section 51A, the following
procedures shall be followed:-
Appointment and Communication of details of UAPA nodal officers :2.
As regards appointment and communication of details of UAPA nodal officers :
(i)
(ii)
The UAPA nodal officer for IS-I division would be the Joint Secretary (IS.I), Ministry of
Home Affairs. His contact details are 011-23092736(Tel), 011-23092569(Fax) and (email).
The Ministry of External Affairs, Department of Economic Affairs, Foreigners Division
of MHA, FIU-IND; and RBI, SEBI, IRDA (hereinafter referred to as Regulators) shall
appoint a UAPA nodal officer and communicate the name and contact details to the ISI Division in MHA.
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(iii)
(iv)
(v)
(vi)
The States and UTs should appoint a UAPA nodal officer preferably of the rank of the
Principal Secretary/Secretary, Home Department and communicate the name and
contact details to the IS-I Division in MHA.
The IS-I Division in MHA would maintain the consolidated list of all UAPA nodal
officers and forward the list to all other UAPA nodal officers.
The RBI, SEBI, IRDA should forward the consolidated list of UAPA nodal officers to
the banks, stock exchanges/depositories, intermediaries regulated by SEBI and
insurance companies respectively.
The consolidated list of the UAPA nodal officers should be circulated to the nodal
officer of IS-I Division of MHA in July every year and on every change. Joint
Secretary(IS-I), being the nodal officer of IS-I Division of MHA, shall cause the
amended list of UAPA nodal officers to be circulated to the nodal officers of Ministry of
External Affairs, Department of Economic Affairs, Foreigners Division of MHA, RBI,
SEBI, IRDA and FIU-IND.
Communication of the list of designated individuals/entities
3.
As regards communication of the list of designated individuals/entities :
(i)
The Ministry of External Affairs shall update the list of individuals and entities subject
to UN sanction measures on a regular basis. On any revision, the Ministry of External
Affairs would electronically forward this list to the Nodal Officers in Regulators, FIUIND, IS-I Division and Foreigners' Division in MHA.
(ii)
The Regulators would forward the list mentioned in (i) above (referred to as designated
lists) to the banks, stock exchanges/depositories, intermediaries regulated by SEBI
and insurance companies respectively.
(iii)
The IS-I Division of MHA would forward the designated lists to the UAPA nodal officer
of all States and UTs.
(iv)
The Foreigners Division of MHA would forward the designated lists to the immigration
authorities and security agencies.
Regarding funds, financial assets or economic resources or related services held in the form
of bank accounts, stocks or insurance policies etc.
4.
As regards funds, financial assets or economic resources or related services held in the form
of bank accounts, stocks or insurance policies etc., the Regulators would forward the
designated lists to the banks, stock exchanges/depositories, intermediaries regulated by SEBI
and insurance companies respectively. The RBI, SEBI and IRDA would issue necessary
guidelines to banks, stock exchanges/depositories, intermediaries regulated by SEBI and
insurance companies requiring them to (i)
Maintain updated designated lists in electronic form and run a check on the given
parameters on a regular basis to verify whether individuals or entities listed in the
schedule to the Order (referred to as designated individuals/entities) are holding any
funds, financial assets or economic resources or related services held in the form of
bank accounts, stocks or insurance policies etc. with them.
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(ii)
(iii)
(iv)
(v)
In case, the particulars of any of their customers match with the particulars of
designated individuals/entities, the banks, stock exchanges/ depositories,
intermediaries regulated by SEBI and insurance companies shall immediately, not later
than 24 hours from the time of finding out such customer, inform full particulars of the
funds, financial assets or economic resources or related services held in the form of
bank accounts, stocks or insurance policies etc. held by such customer on their books
to the Joint Secretary (IS.I), Ministry of Home Affairs, at Fax No.011-23092569 and
also convey over telephone on 011-23092736. The particulars apart from being sent
by post should necessarily be conveyed on e-mail.
The banks, stock exchanges/ depositories, intermediaries regulated by SEBI and
insurance companies shall also send by post a copy of the communication mentioned
in (ii) above to the UAPA nodal officer of the state/ UT where the account is held and
Regulators and FIU0IND, as the case may be.
In case, the match of any of the customers with the particulars of designated
individuals/entities is beyond doubt, the banks stock exchanges / depositories,
intermediaries regulated by SEBI and insurance companies would prevent designated
persons from conducting financial transactions, under intimation to Joint Secretary
(IS.I), Ministry of Home Affairs, at Fax No. 011-23092569 and also convey over
telephone on 011-23092736. The particulars apart from being sent by post should
necessarily be conveyed on e-mail.
The banks, stock exchanges/depositories, intermediaries regulated by SEBI and
insurance companies shall file a Suspicious Transaction Report (STR) with FIU-IND
covering all transactions in the accounts covered by paragraph (ii) above , carried
through or attempted, as per the prescribed format.
5.
On receipt of the particulars referred to in paragraph 3(ii) above, IS-I Division of MHA would
cause a verification to be conducted by the State Police and/or the Central Agencies so as to
ensure that the individuals/entities identified by the banks, stock exchanges/depositories,
intermediaries regulated by SEBI and Insurance Companies are the ones listed as designated
individuals/entities and the funds, financial assets or economic resources or related services,
reported by banks, stock exchanges/depositories, intermediaries regulated by SEBI and
insurance companies are held by the designated individuals/entities. This verification would be
completed within a period not exceeding 5 working days from the date of receipt of such
particulars.
6.
In case, the results of the verification indicate that the properties are owned by or held for the
benefit of the designated individuals/entities, an order to freeze these assets under section
51A of the UAPA would be issued within 24 hours of such verification and conveyed
electronically to the concerned bank branch, depository, branch of insurance company branch
under intimation to respective Regulators and FIU-IND. The UAPA nodal officer of IS-I
Division of MHA shall also forward a copy thereof to all the Principal Secretary/Secretary,
Home Department of the States or UTs, so that any individual or entity may be prohibited from
making any funds, financial assets or economic assets or economic resources or related
services available for the benefit of the designated individuals/entities or any other person
engaged in or suspected to be engaged in terrorism. The UAPA nodal officer of IS-I Division
of MHA shall also forward a copy of the order under Section 51A, to all Directors General of
Police/Commissioners of Police of all states/UTs for initiating action under the provisions of
Unlawful Activities (Prevention) Act.
The order shall take place without prior notice to the designated individuals/entities.
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Regarding financial assets or economic resources of the nature of immovable properties.
7.
IS-I Division of MHA would electronically forward the designated lists to the UAPA nodal
officer of all States and UTs with the request to have the names of the designated
individuals/entities, on the given parameters, verified from the records of the office of the
Registrar performing the work of registration of immovable properties in their respective
jurisdiction.
8.
In case, the designated individuals/entities are holding financial assets or economic resources
of the nature of immovable property and if any match with the designated individuals/entities is
found, the UAPA nodal officer of the State/UT would cause communication of the complete
particulars of such individual/entity along with complete details of the financial assets or
economic resources of the nature of immovable property to the Joint Secretary (IS.I), Ministry
of Home Affairs, immediately within 24 hours at Fax No.011-23092569 and also convey over
telephone on 011-23092736. The particulars apart from being sent by post should necessarily
be conveyed on e-mail.
9.
The UAPA nodal officer of the State/UT may cause such inquiry to be conducted by the State
Police so as to ensure that the particulars sent by the Registrar performing the work of
registering immovable properties are indeed of these designated individuals/entities. This
verification would be completed within a maximum of 5 working days and should be conveyed
within 24 hours of the verification, if it matches with the particulars of the designated
individual/entity to Joint Secretary(IS-I), Ministry of Home Affairs at the Fax telephone
numbers and also on the e-mail id given below.
10.
A copy of this reference should be sent to the Joint Secretary (IS.I), Ministry of Home Affairs,
at Fax No.011-23092569 and also convey over telephone on 011-23092736. The particulars
apart from being sent by post would necessarily be conveyed on e-mail. MHA may have the
verification also conducted by the Central Agencies. This verification would be completed
within a maximum of 5 working days.
11.
In case, the results of the verification indicate that the particulars match with those of
designated individuals/entities, an order under Section 51A of the UAPA would be issued
within 24 hours, by the nodal officer of IS-I Division of MHA and conveyed to the concerned
Registrar performing the work of registering immovable properties and to FIU-IND under
intimation to the concerned UAPA nodal officer of the State/UT.
The order shall take place without prior notice, to the designated individuals/entities.
12.
Further, the UAPA nodal officer of the State/UT shall cause to monitor the
transactions/accounts of the designated individual/entity so as to prohibit any individual or
entity from making any funds, financial assets or economic resources or related services
available for the benefit of the individuals or entities listed in the schedule to the order or any
other person engaged in or suspected to be engaged in terrorism. The UAPA nodal officer of
the State/UT shall upon coming to his notice, transactions and attempts by third party
immediately bring to the notice of the DGP/Commissioner of Police of the State/UT for also
initiating action under the provisions of Unlawful Activities (Prevention) Act.
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Implementation of requests received from foreign countries under U.N. Security Council
Resolution 1373 of 2001.
13.
U.N. Security Council Resolution 1373 obligates countries to freeze without delay the funds or
other assets of persons who commit, or attempt to commit, terrorist acts or participate in or
facilitate the commission of terrorist acts; of entities owned or controlled directly or indirectly
by such persons; and of persons and entities acting on behalf of, or at the direction of such
persons and entities, including funds or other assets derived or generated from property
owned or controlled, directly or indirectly, by such persons and associated persons and
entities. Each individual country has the authority to designate the persons and entities that
should have their funds or other assets frozen. Additionally, to ensure that effective
cooperation is developed among countries, countries should examine and give effect to, if
appropriate, the actions initiated under the freezing mechanisms of other countries.
14.
To give effect to the requests of foreign countries under U.N. Security Council Resolution
1373, the Ministry of External Affairs shall examine the requests made by the foreign countries
and forward it electronically, with their comments, to the UAPA nodal officer for IS-I Division
for freezing of funds or other assets.
15.
The UAPA nodal officer of IS-I Division of MHA, shall cause the request to be examined,
within 5 working days so as to satisfy itself that on the basis of applicable legal principles, the
requested designation is supported by reasonable grounds, or a reasonable basis, to suspect
or believe that the proposed designee is a terrorist, one who finances terrorism or a terrorist
organization, and upon his satisfaction, request would be electronically forwarded to the nodal
officers in Regulators. FIU-IND and to the nodal officers of the States/UTs. The proposed
designee, as mentioned above would be treated as designated individuals/entities.
16.
Upon receipt of the requests by these nodal officers from the UAPA nodal officer of IS-I
Division, the procedure as enumerated at paragraphs 4 to 12 above shall be followed.
The freezing orders shall take place without prior notice to the designated persons involved.
Procedure for unfreezing of funds, financial assets or economic resources or related services
of individuals/entities inadvertently affected by the freezing mechanism upon verification that
the person or entity is not a designated person
17.
Any individual or entity, if it has evidence to prove that the freezing of funds, financial assets
or economic resources or related services, owned/held by them has been inadvertently
frozen, they shall move an application giving the requisite evidence, in writing, to the
concerned bank, stock exchanges/depositories, intermediaries regulated by SEBI, insurance
companies, Registrar of Immovable Properties and the State/UT nodal officers.
18.
The banks stock exchanges/depositories, intermediaries regulated by SEBI, insurance
companies, Registrar of Immovable Properties and the State/UT nodal officers shall inform
and forward a copy of the application together with full details of the asset frozen given by any
individual or entity informing of the funds, financial assets or economic resources or related
services have been frozen inadvertently, to the nodal officer of IS-I Division of MHA as per the
contact details given in paragraph 4(ii) above within two working days.
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19.
The Joint Secretary (IS-I), MHA, being the nodal officer for (IS-I) Division of MHA, shall cause
such verification as may be required on the basis of the evidence furnished by the
individual/entity and if he is satisfied, he shall pass an order, within 15 working days,
unfreezing the funds, financial assets or economic resources or related services, owned/held
by such applicant under intimation to the concerned bank, stock exchanges/depositories,
intermediaries regulated by SEBI, insurance company and the nodal officers of States/UTs.
However, if it is not possible for any reason to pass an order unfreezing the assets within
fifteen working days, the nodal officer of IS-I Division shall inform the applicant.
Communication of Orders under section 51A of Unlawful Activities (Prevention) Act.
20.
All Orders under section 51A of Unlawful Activities (Prevention) Act, relating to funds, financial
assets or economic resources or related services, would be communicated to all banks,
depositories/stock exchanges, intermediaries regulated by SEBI, insurance companies
through respective Regulators, and to all the Registrars performing the work of registering
immovable properties, through the State/UT nodal officer by IS-I Division of MHA.
Regarding prevention of entry into or transit through India
21.
As regards prevention of entry into or transit through India of the designated individuals, the
Foreigners Division of MHA, shall forward the designated lists to the immigration authorities
and security agencies with a request to prevent the entry into or the transit through India. The
order shall take place without prior notice to the designated individuals/entities.
22.
The immigration authorities shall ensure strict compliance of the Orders and also
communicate the details of entry or transit through India of the designated individuals as
prevented by them to the Foreigners' Division of MHA.
Procedure for communication of compliance of action taken under Section 51A.
23.
The nodal officers of IS-I Division and Foreigners Division of MHA shall furnish the details of
funds, financial assets or economic resources or related services of designated
individuals/entities frozen by an order, and details of the individuals whose entry into India or
transit through India was prevented, respectively, to the Ministry of External Affairs for onward
communication to the United Nations.
24.
All concerned are requested to ensure strict compliance of this order.
(D .Diptivilasa)
Joint Secretary to Government of India
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Appendix - XI
An Illustrative Check list covering Money-Laundering Activities
A customer maintains multiple accounts, transfer money among the accounts and uses one account
as a master account from which wire/funds transfer originates or into which wire/funds transfer are
received (a customer deposits funds in several accounts, usually in amounts below a specified
threshold limit and the funds are then consolidated into one master account and wired outside the
country).
A customer regularly depositing or withdrawing large amounts by wire transfer to/ from or through
countries that are known sources of narcotics or where Bank secrecy laws facilitate laundering
money.
A customer sends and receives wire transfers (from financial haven countries) particularly if there is
no apparent business reason for such transfers and is not consistent with the customer’s business or
history.
A customer receiving many small incoming wire transfer of funds or deposits of cheques and money
orders, then orders large outgoing wire transfers to another city or country.
A customer experiences increased wire activity when previously there has been no regular wire
activity.
Loan proceeds unexpectedly are wired or mailed to an offshore Bank or third party.
A business customer uses or evidences or sudden increase in wired transfer to send and receive
large amounts of money, internationally and/ or domestically and such transfers are not consistent
with the customer’s history.
Deposits of currency or monetary instruments into the account of a domestic trade or business, which
in turn are quickly wire transferred abroad or moved among other accounts for no particular business
purpose.
Sending or receiving frequent or large volumes of wire transfers to and from offshore institutions.
Instructing the Bank to transfer funds abroad and to expect an equal incoming wire transfer from
other sources.
Wiring cash or proceeds of a cash deposit to another country without changing the form of the
currency.
Receiving wire transfers and immediately purchasing monetary instruments prepared for payment to
a third party.
Periodic wire transfers from a person’s account/s to Bank haven countries.
A customer pays for a large (international or domestic) wire transfers using multiple monetary
instruments drawn on several financial institutions.
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A customer or a non-customer receives incoming or makes outgoing wire transfers involving currency
amounts just below a specified threshold limit, or that involve numerous Bank or travellers cheques
A customer or a non customer receives incoming wire transfers from the Bank to ‘Pay upon proper
identification’ or to convert the funds to bankers’ cheques and mail them to the customer or noncustomer, when :–

The amount is very large (say over Rs.10 lakhs)


The funds come from a foreign country or
Such transactions occur repeatedly
A customer or a non-customer arranges large wire transfers out of the country which are paid for by
multiple Bankers’ cheques (just under a specified threshold limit)
A Non-customer sends numerous wire transfers using currency amounts just below a specified
threshold limit.
Consolidated guidelines on KYC norms and AML measures
Page 102 of 122
Appendix - XII
ALLAHABAD BANK
BRANCH ……………………………
CUSTOMER RISK PROFILE











Type of Account
A/c No
Date of Opening
Full Name
Nationality
Occupation
@PAN/GIR No.
Driving Licence
Residential Address
NRI Passport No.
$(with Phone No., if any)
:
:
:
:
:
:
:
:
:
:
:
Mr./Ms.
Mr./Ms
Mr./Ms
@ Form No.60/61 may be submitted in the absence of PAN/GIR No.
$ if available
Purpose of Opening the Account Potential Activity expected in the Source of funds
Annual Income
A/c (Monthly / Annual Turnover)
Classification of the Account as per the observation of the official opening the A/c
(Please mark wherever applicable)
High Risk Medium Risk Low Risk
(Salaried/ Fixed Income group/Pensioner’s A/c)
Signature of the Official opening the A/c
Consolidated guidelines on KYC norms and AML measures
Page 103 of 122
BUSINESS RISK PROFILE
(If engaged in business)

Geographical location of the business
:

Nature/Activity of business / Occupation
:

Estimated income from the business
:

Any other source of income
:

Total annual Income
:

Approximate value of :(a) Movable Assets
:
(b) Immovable assets
:

Details of existing bank account, if any

Details of Credit Facilities, if any, availed
:

Details of foreign countries,
(if any visited during last three years)
:
:
Consolidated guidelines on KYC norms and AML measures
Page 104 of 122
Appendix -XIII
List of firms advised by RBI posing as Multi Level Marketing (MLM) Agencies
a.
Vide HOIC10668/AML&KYC/2009-10/05 dated 02.09.2009
i)
Fine India Sales Pvt. Ltd.
ii) Lakshya Levels Marketing
iii) Eve Industries
iv) Trident Advertising & Trade Links Pvt. Ltd.
v) Super Life Link Distributors
vi) Lue Brain Education Society
vii) Manya Mantra Marketing
b.
Vide HOIC11442/AM L&KYC/2011-12/01 dated 30.06.2011
SpeakAsia - Agents
State - Andhra Pradesh
Sl.
No.
1.
2.
Name
Location
City
Manasareddy Devireddy
Ms.Swamy
Andhra Pradesh
Andhra Pradesh
Krishna
Andhra Pradesh
Name
Location
City
Ms B. S. Autocare
ArunachalPradesh
Itanagar
Name
Location
City
SPA Associates
Assam
Silchar
Name
Location
City
Raj Kishore Prasad
Anuj Kumar
Bihar
Bihar
Patna
Nalanda
State - Arunachal Pradesh
Sl.
No.
1.
State - Assam
Sl.
No.
1.
State - Bihar
Sl.
No.
1.
2.
State - Chattisgarh
Union Territories - Chandigarh, Dadra Nagar Haveli and Daman Diu
Consolidated guidelines on KYC norms and AML measures
Page 105 of 122
Sl.
No.
1.
2.
3.
4.
5.
6.
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Shivam Enterprises
Shink Enterprises
Shink Enterprises
Delhi
Delhi
Delhi
Delhi
Laxmi Nagar main
Road
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Patel Communication
Daksh Resources
Target Advertising
Samrajaya consultancy Services
Dreamz
Gujarat
Gujarat
Gujarat
Gujarat
Gujarat
Ahmedabad
Ankleshwar
Surat
Ahmedabad
Surat
Name
Location
City
M/S Shree sai Group
Durej Network
Haryana
Haryana
Rewari
-
State - Delhi
Sl.
No.
1.
2.
3.
State - Goa
Sl.
No.
1.
2.
3.
4.
5.
6.
State - Gujrat
Sl.
No.
1.
2.
3.
4.
5.
State - Haryana
Sl.
No.
1.
2.
Consolidated guidelines on KYC norms and AML measures
Page 106 of 122
State – Himachal Pradesh
Sl.
No.
1.
2.
3.
4.
5.
6.
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Sinaan
A R Earnings
EMS Group Bangalore
Karnataka
Karnataka
Karnataka
Haveri
Bengaluru
Bengaluru
State – Jammu & Kashmir
Sl.
No.
1.
2.
3.
4.
5.
6.
State - Jharkand
Sl.
No.
1.
2.
3.
4.
5.
6.
State - Karnataka
Sl.
No.
1.
2.
3.
Consolidated guidelines on KYC norms and AML measures
Page 107 of 122
State - Kerala
Sl.
No.
1.
Name
Location
City
speakkerala
Kerala
Kochi
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Amit Sabhlok
Goldmine
Money Solutions
Rama Infotech
P S Associates
Madhya Pradesh
Madhya Pradesh
Madhya Pradesh
Madhya Pradesh
Madhya Pradesh
Jabalpur
Indore
Gwalior
Gwalior
Bhopal
Name
Location
City
Grow Rich Associates
Speak India Online
Bramhanath Enterprises
M/s R.K. Investments
Bramhanath Enterprises
Balaji Associates
IQRA Infotech
Permal Reddiar
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Mumbai
Mumbai
Mumbai
Nashik
Pune
Nagpur
Mumbai
Vashi
Union Territory - Lakshadweep
Sl.
No.
1.
2.
3.
4.
5.
6.
State – Madhya Pradesh
Sl.
No.
1.
2.
3.
4.
5.
State - Maharashtra
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
Consolidated guidelines on KYC norms and AML measures
Page 108 of 122
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Gallop New Media Inc.
ABN Research Online
Star Enterprises
Biomile Marketing Pvt. Ltd
NIVI International
Universal Enterprises
Shreeram Infotech
Money Ocean Financial Solutions
Speak Mumbai
BTC World
Rishikesh Investments
Pomp & Glory Enterprises
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Pune
Mumbai
Navi Mumbai
Dahanu
Mumbai
Mumbai
Mumbai
Mumbai
Mumbai
Mumbai
Amravati
Sanpada Navi
Mumbai
States – Manipur & Meghalaya, Mizoram, Nagaland, Sikkim and Tripura
Union Territories - Puducherry
Sl.
No.
1.
2.
3.
4.
5.
6.
Name
Location
City
Grow Rich Associates
Speak India Online
Perfect Online Survey
Bramhanath Enterprises
Amrita Enterprises
Shreeya Info Media
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Ashirbada Marketing
Orissa
Bhubaneswar
Name
Location
City
R S Associates
SIMR Associates
M/S laxmi Enterprises
Digital Prana
Deep Associates
Punjab
Punjab
Punjab
Punjab
Punjab
Bathinda
Jalndhar
Ludhiana
Amritsar
Amritsar
Name
Location
City
Krishna Associates
Accurasoft Outsourcing
Rajasthan
Rajasthan
Jaipur
Jaipur
State – Orissa
Sl.
No.
1.
State – Punjab
Sl.
No.
1.
2.
3.
4.
5.
State – Rajasthan
Sl.
No.
1.
2.
Consolidated guidelines on KYC norms and AML measures
Page 109 of 122
State – Uttar Pradesh
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Name
Location
City
Turtle Informatics
M/s Agarwal & Company
Rajesh Enterprises
Akruti Techsolutions Pvt. Ltd
Golden Sky Tours
Amrita Enterprises
Shreeya Info Media
Gayatri Built Well Pvt. Ltd
Sunrise Vision
S.S. BPO Services Pvt. Ltd.
Speak Nation
Protocol Services and
Consultancy
Raj services
Shri Sai Enterprises
Sai Kripa Agency
Star Infotech
Speak Continent
Saloni Share Solution
Chandradeep Enterprises
Bankey Bihari Associates
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Lucknow
Muzaffar Nagar
Raipur
Gorakhpur
Varanasi
Farrukhabad
Lucknow
Greater Noida
Allahabad
Lucknow
Moradabad
Lucknow
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Varanasi
Rampur
Varanasi
Lucknow
Lucknow
Patna
Bareilly
Muzaffar Nagar
Name
Location
City
Perfect Online Survey
Swift Online Money
Hi Tech Online Survey
Uttaranchal
Uttaranchal
Uttaranchal
Dehradun
Dehradun
Haridwar
Name
Location
City
Gopsun Deal Trade Private Ltd.
West Bengal
Kolkata
State – Uttaranchal
Sl.
No.
1.
2.
3.
State – West Bengal
Sl.
No.
1.
Consolidated guidelines on KYC norms and AML measures
Page 110 of 122
Appendix - XIV
Companies/Individuals identified/suspected of carrying out MLM activities
1. HIMBJS Holidays Private Ltd.
2. HIMBJS Risk Management Pvt. Ltd.
3. Itech. Eye Consumer Electronic Private Ltd.
4. Spattern Computers Private Ltd.
5. SHIMBJS Automobile Private Ltd.
6. Accresent Way Mktg Pvt. Ltd.
7. Baishag Real Estate and Construction Ltd.
8. Angel Agritech Ltd.
9. Angelay Food Products Pvt. Ltd.
10. Yatra Hospitality Services Pvt. Ltd.
11. Swapnaneer Abasan Pvt. Ltd.
12. Angel Mediline and Research Centers Pvt. Ltd.
13. Angel Rural Development Ltd.
14. Angel Cinivision and Media Pvt. Ltd.
15. Angel Movie Max and Entertainment Pvt. Ltd.
16. Angel Allied India Ltd.
17. Yuvraj Construction
18. Mr Sekh Nazibulla
19. Mr SK Hasibul Haque
Consolidated guidelines on KYC norms and AML measures
Page 111 of 122
Appendix - XV
Changes incorporated in the current consolidated guidelines vis-à-vis guidelines
issued in terms of last Policy vide IC No. 12808 dated 16.12.2013
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
(As per last
Policy vide IC
12808 dated
16.12.2013)
Nil
Revision proposed
Rationale/Remarks
1.
Chapter-1,
Para-1.2
Definition of Transactions in terms of Govt.
of India Notification vide which "Transaction"
means a purchase, sale, loan, pledge, gift,
transfer, delivery or the arrangement thereof
Chapter-1,
Para1.3(iv)
Nil
3.
Chapter-1,
Para1.4(c)
4.
Chapter-2,
Para2.3(iii)
Requirement
of PAN for
transactions
above
Rs50,000
Nil
With effect from April 1, 2012, bank is
debarred from making payment of
cheques/drafts/pay orders/banker’s cheques
bearing that date or any subsequent date, if
they are presented beyond the period of
three months from the date of such
instrument.
This instruction would also apply to sale of
bank’s own products, payment of dues of
credit
cards/sale
and
reloading
of
prepaid/travel cards and any other product
for Rs. 50,000 and above.
NPOs/NGOs promoted by United Nations or
its agencies may be classified as Low Risks
customers.
RBI Cir
DBOD.AML.BC.
No.26/14.01.001/2013
-14 dated 17.07.2014]
[Govt. of India
Notification dated
27.08.2013
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.1 (iii)
2.
5.
Chapter-2,
Para2.3(iii)
Nil
(Addition to
current
circular)
Bank should take steps to identify and
assess ML/TF risk for customers, countries
and geographical areas as also for products/
services/ transactions/delivery channels.
Bank should have policies, controls and
procedures, duly approved by the board, in
place to effectively manage and mitigate risk
adopting a risk-based approach.
6.
Chapter-3,
Para3.1(b)
Nil
Bank has to seek ‘mandatory’ information
required for KYC purpose which the
customer is obliged to give while opening an
account or during periodic updation. Other
‘optional’
customer
details/additional
information, if required may be obtained
separately after the account is opened only
with the explicit consent of the customer.
Consolidated guidelines on KYC norms and AML measures
[RBI Cir DBOD.AML.
BC.No.29/14.01.001/2
014-15 dated
12.07.2014, Point
No.5)]
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.3 (c)
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.3 (d)
[RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.4 (b)]
Page 112 of 122
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
7.
Chapter-3,
Para3.1(c)
Nil
Customer identification requirements in
respect of a few typical cases, especially,
legal persons requiring an extra element of
caution should be taken with reasonable
measures to identify the beneficial owner(s).
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.4 (c)
8.
Chapter-3,
Para3.1(d)
Definition of
Beneficial
Owners
modified
Consequent upon GOI Notification dated
27.08.2013, definition of Beneficial Owners
has been modified, and, therefore, revised
procedure for identification is clarified
RBI Cir DBOD.AML.
BC.No.26/14.01.001/2
013-14 dated
17.07.2014] [GOI
Notification dated
27.08.2013
9.
Chapter-3,
Para3.1(e)
Nil
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.4 (e)
10.
Chapter-3,
Para3.1(h)
Norms of
Proof of
Address in
case of
shifting has
been
amended
The increasing complexity and volume of
financial transactions necessitate that
customers do not have multiple identities
within a bank, across the banking system
and across the financial system, and in
order to achieve it Unique Customer
Identification Code (UCIC) should be
introduced
Norms for furnishing proof of address have
been relaxed to allow submitting only one
documentary proof of address (either current
or permanent) while opening a bank account
or while undergoing periodic updation. Also,
the norms is relaxed in case of shifting from
one place to other
11.
Chapter-3,
Para3.1(i)/(iii)
Clarification
of ‘Full KYC’
Full KYC may include all measures for
confirming identity and address and other
particulars of the customer that the bank
may consider reasonable and necessary
based on the risk profile of the customer.
RBI Master Cir
DBOD. AML.BC.
No.22/ 14.01.001/
2013-14 dated
01.07.2014 Point No.
2.4 J(i)
12.
Chapter-3,
Para3.1(i)/(v)
Requirement
of positive
confirmation
at specific
intervals for
medium &
low risk
customers
In view of application of client due diligence
& on-going due diligence, requirement of
‘positive confirmation’ for medium & low risk
customers have since dispense with
RBI Cir DBOD.
AML.BC. No.39/
14.01.001/ 2013-14
dated 04.09.2014
Point No. 2
13.
Chapter-3,
Para3.1(i)/(vi)
Physical
presence of
customers at
time of
periodic
updation
Physical presence of the customers may,
however, not be insisted upon at the time of
such periodic updation
RBI Cir DBOD.
AML.BC. No.39/
14.01.001/ 2013-14
dated 04.09.2014
Point No. 3
Consolidated guidelines on KYC norms and AML measures
RBI Cir DBOD.AML.
BC.No.119/14.01.001/
2013-14 dated
09.06.2014
Page 113 of 122
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
14.
Chapter-3,
Para-3.1(i)
Nil
15.
Chapter-3,
Para-3.1(i)
Nil
16.
Chapter-3,
Para-3.1(j)
Nil
17.
Chapter-3,
Para3.2(C)
Verification of
Junk/Invalid
PAN and
rectification
thereof
If the address on the document submitted RBI Master Cir
for identity proof by the prospective DBOD. AML.BC.
customer is same as that declared by No.22/
him/her in the account opening form, the 14.01.001/2013-14
document may be accepted as a valid proof dated 01.07.2014
for both identity and address.
Point No. 2.4 (l)
It is been decided that where a customer, RBI
Cir
DBOD.AML.BC.
categorized as low risk, expresses inability
to complete the documentation requirements No.26/14.01.001/2013
-14 dated 17.07.2014
on account of any reason that the bank
& Govt. of India
considers to be genuine, and where it is Notification
dated
essential not to interrupt the normal conduct 27.08.2013]
of business, the bank may complete the
verification of identity within a period of six
months from the date of establishment of the
relationship.
Officially Valid Documents based on GOI RBI Master Cir
DBOD.
Notification dated 27.08.2013
Also, discretion given to banks to this effect AML.BC.No.22/14.01.
001/2014-15 dated
stands withdrawn
01.07.2014, Point
No.2.4 (c)
Verification of all existing PAN already HO IC No.
entered and on-going verification of PAN 13084/AML &
KYC/2014-2015/04
for the new accounts with NSDL dated 05.06.2014
18.
Chapter-3,
Para3.2(D)
Nil
19.
Chapter-3,
Para3.3(vi) (c)
Nil
20.
Chapter-3,
Para-3.4
(A,B&C)
Nil
Rationale/Remarks
database has since been taken up, and
reports
having
details
of
PAN
discrepancies are uploaded regularly in
branch report folders for ensuring
necessary corrective steps by the
concerned branches
Relying on third party for verifying the RBI Cir
identity of customers – conditions to be DBOD.AML.BC.
No.26/14.01.001/2013
fulfilled
-14 dated 17.07.2014
& Govt. of India
Notification dated
27.08.2013
Guidelines on CDD to PEPs
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.5 f (iii)
Guidelines on –
RBI Master Cir
DBOD.
(a) Correspondent Bank,
(b) Correspondent relationship with a AML.BC.No.22/14.01.
001/2014-15 dated
‘Shell Bank’
01.07.2014, Point
(c) Due Diligence in Correspondent No.2.20 (a, b & c)
Banking Relationship
Consolidated guidelines on KYC norms and AML measures
Page 114 of 122
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
21.
Chapter-3,
Para-3.5
Nil
Simplified KYC norms for Foreign Portfolio
Investors (FPIs)
22.
Chapter-3,
Para-3.8 A
Opening of
Small
Account
Guidelines on opening & operation of Small
Accounts have been amended
23.
Chapter-3,
Para-3.8.
B (b&c)
Officially
Valid
Documents
Officially valid documents have been
amended with introduction of e-KYC
procedure in the bank
RBI Cir
DBOD.AML.BC.
No.103/14.01.001/201
3-14 dated
03.04.2014
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.9 (a)
RBI circular DBOD.
AML.BC.No.44/
14.01.001/2013-14
dated September 2,
2013
24.
Chapter-3,
Para-3.8.
B (g)
Nil
25.
Chapter-3,
Para-3.9
Nil
26.
Chapter-4,
Para-4.3
(b, c & d)
Nil
Provision for ‘Simplified measures’ for RBI Cir
verification of customers to be considered DBOD.AML.BC.
No.26/14.01.001/2013
for Low Risk customers
-14 dated 17.07.2014
& Govt. of India
Notification dated
27.08.2013
Comprehensive Financial Inclusion – brief Govt. of India
directives dated
guidelines & approach
09.07.2014
 Bank has to prescribe threshold limits for RBI Master Cir
a particular category of accounts for DBOD.
paying specific attention to the AML.BC.No.22/14.01.
001/2014-15 dated
transactions which exceed these limits.
01.07.2014, Point
 Branches should exercise ongoing due No.2.13 (a , c & d)
diligence
 The risk categorization of customers,
compilation and periodic updation of
customer profiles, monitoring and
closure of alerts in accounts by bank
27.
Chapter-4,
Para4.3(e)
Multi Level
Marketing
Further clarification of the activity of Multi
Level Marketing (MLM) concerns has been
given
28.
Chapter-4,
Para-4.3.3
Monitoring of
cash
transactions
within
threshold
limit of
Rs.50,000
Real-time alert generation through Pop-up
for issuance of DD/BC/IOI in cash within a
range of Rs.40,000 to Rs.49,999, and
generation of exceptional report to that
effect is introduced in terms of RBI directives
Consolidated guidelines on KYC norms and AML measures
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.13 (b)
RBI observation on
Thematic Review on
adherence to AML &
KYC issues of our
Bank
Page 115 of 122
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
29.
Chapter-4,
Para-4.6
Sources of U N Security Council Sanctions
List – amended guidelines
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.17 (b)
30.
Chapter-4,
Para4.7(ix)
Monitoring to
prevent
money
laundering for
Terrorist
Finance (TF)
Nil
Jurisdictions that do not or insufficiently
apply the FATF Recommendations
31.
Chapter-4,
Para4.12(1)
Maintenance
of records of
transactions –
in respect of
CTR
Further explanation on CTR with example
32.
Chapter-4,
Para4.12(3)
Period of maintenance of records has been
amended and lowered down from 10 years
to 5 years
33.
Chapter-4,
Para4.12(4)
Maintenance
of records of
transactions
&
identification
of the
customers
Guidelines on
CTR
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.19
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.24(a)
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.24(c)
34.
Chapter-4,
Para4.12(4)(a)
Nil
35.
Chapter-4,
Para4.12(4)(b)
36.
Chapter-4,
Para4.12(4)(d)
To be
reported to
FIU-IND
within 7
working days
of occurrence
Nil
Guidelines on opening of ‘Non-Customer
Current Account’ – where it is advised
interalia to seek HO permission for opening
of any such account
CCR to be reported to FIU-IND under
specified format within 15th day of
succeeding month
Directions of FIU-IND on submission of CTR
are noted
Details guidelines of submission of Cross
Border Wire Transfer to FIU-IND has
clarified
Consolidated guidelines on KYC norms and AML measures
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.25(a)
Instruction Circular
No. 12699/BPR
Cell/2013-14/10 dated
08.10.2013
RBI Cir
DBOD.AML.BC.
No.26/14.01.001/201
3-14 dated
17.07.2014 & Govt. of
India Notification
dated 27.08.2013
Govt. of India
Notification No.
12/2013 dated
27.08.2013], [RBI Cir.
No. DBOD. AML No.
16415/14.01.001/
2013-14 dated March
28, 2014], [FIU-IND
publication of FAQs
on CWTR
Page 116 of 122
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
37
Chapter-4,
Para4.12(5)
Nil
Procedure to be followed for submission of
reports, and rule for violation
38.
Chapter-5
Nil
Introductory write-up on Risk Management
39.
Chapter-5
(5.1)
Chapter-5
(5.7)
Nil
Roles & responsibilities of Nodal Officers
Introduction
of New
Technologie
s
Clarifications given as per RBI guidelines
which includes interalia to ensure full
compliance with KYC/AML/CFT
41.
Chapter-5
(5.10)
Nil
Appointment of Designated Director & roles
& responsibilities have been clarified as per
GOI directives
42.
Chapter-5
(5.11)
Principal
Officer
Roles and responsibilities of Principal
Officer clarified in terms of RBI directives
43.
Appendix-II
Documents
to be
obtained for
different
types of
customers
Definition of ‘Officially Valid Documents’ for
identity & address proof have been
modified. Also, modifications made in terms
of GOI notification dated 27.08.2013 for
different types of customers
RBI
Cir
DBOD.AML.BC.
No.26/14.01.001/201
3-14
dated
17.07.2014] [Govt. of
India
Notification
dated 27.08.2013
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.15
Bank’s guidelines
issued on 07.07.2014
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.16
RBI Cir
DBOD.AML.BC.
No.26/14.01.001/201
3-14 dated
17.07.2014 & Govt. of
India Notification
dated 27.08.2013
RBI Master Cir
DBOD.
AML.BC.No.22/14.01.
001/2014-15 dated
01.07.2014, Point
No.2.23(b)
RBI Cir
DBOD.AML.BC.
No.26/14.01.001/201
3-14 dated
17.07.2014 & Govt. of
India Notification
dated 27.08.2013
44.
Appendix-III
Nil
Format of one page account opening form, As approved by the
as approved by the bank, for Financial bank in terms of GOI
directives
Inclusion
40.
Consolidated guidelines on KYC norms and AML measures
Page 117 of 122
Appendix – XVI
List of Circulars on ‘Know Your Customer (KYC)’ Guidelines issued from July 2013
Sl.
No.
1.
Instruction
Circular No.
12591/AML &
KYC/2013-14/06
Date
Subject
Gist of Circular
25.07.2013
Compliance to KYC
norms
2.
12609/AML &
KYC/2013-14/07
30.07.2013
3.
12647/MKTG/201314/18
04.09.2013
Simplifying norms for
Periodical Updation
of KYC
Know your customer(KYC)
Norms/Anti-Money
Laundering (AML)
Standards/Combating of
Financing of Terrorism
(CFT)/Obligations of banks
under Prevention of Money
laundering Act(PMLA),2002
To ensure compliance of the
basic KYC norms in terms of
RBI directives
On-going due diligence
& updation of the customers’
records
Compliance of KYC norms in
case selling of Third Party
Product as agents.
4.
12677/AML &
KYC/2012-13/08
26.09.2013
Know your customer(KYC)
Norms/Anti-Money
Laundering (AML)
Standards/Combating of
Financing of Terrorism
(CFT)/Obligations of banks
under Prevention of Money
laundering Act PMLA,2002Information sought by banks
from customers
Norms for obtaining
‘mandatory’ information and
‘optional customer
details’/’additional
information’.
5.
12678/AML &
KYC/2012-13/09
26.09.2013
Foreign students
studying in India –
KYC procedure for
opening of bank
accounts.
Guidelines on KYC
requirements viz. ‘proof of
address’ for opening of NRO
bank accounts of
Foreign students
studying in India.
6.
12713/AML & KYC
/2013-14/10
22.10.2013
Deletion of Invalid/ Junk PAN
Guidelines to obtain genuine
PAN, and thereby instruction
issued for deletion of Junk /
Invalid PAN
7.
12738/AML &
KYC/2013-14/11
29.10.2013
Fictitious Offer-Filling of FIR
by Banks
Guidelines to prevent opening
of account lured by fictitious
offer which are susceptible to
fraud
8.
12750/AML &
KYC/2013-14/12
12.11.2013
Campaign to update Know
Your Customer (KYC)
Drive/Campaign for KYC
updation as well as updation
of CBS database
Consolidated guidelines on KYC norms and AML measures
Page 118 of 122
Sl.
No.
9.
Instruction
Circular No.
12753/Dev/201314/13
Date
Subject
Gist of Circular
18.11.2013
Non-Resident Ordinary
Account(NRO Account),Compliance of Guidelines
Due diligence for strict
adherence of FEMA,1999
regulations on operation of
NRO and NRE accounts
10.
12760/AML &
KYC/2013-14/14
21.11.2013
Simplifying norms for
Periodical Updation of KYC
Guidelines based in IBA
Working Group
recommendation on full KYC
measures, positive
confirmation & asset
accounts
11.
12776/AML &
KYC/2013-14/15
28.11.2013
Due diligence in
Correspondent Banking
Relationship
Incorporation of clause
indicating bank’s right to
verify the records maintained
by the client cooperative
banks/societies towards
compliance of KYC and AML
in view of the due diligence in
Correspondent Banking
Relationship.
12.
12808 /AML
&KYC/2013-14/16
16.12.2013
Policy/ Guidelines on “KYC”
norms/”AML”
measures/”CFT”
Detailed Guidelines on
“KYC” norms/”AML”
measures/”CFT” based on
RBI Master Circular dated
01.07.2014
13.
12940/AML &
KYC/2013-14/18
03.03.2014
Adherence to KYC & AML
Norms
Ensuring Strict compliance of
KYC/AML norms
14.
12951/AML &
KYC/2013-14/19
08.03.2014
Know your customer(KYC)
Norms/Anti-Money
Laundering (AML)
Standards/Combating of
Financing of Terrorism
(CFT)/Obligations of banks
under Prevention of Money
laundering Act PMLA,2002Information sought by banks
from customers-Recognizing
E-Aadhaar as an “Officially
Valid Document’ under PML
Rules
Acceptance of e-Aadhaar
letter downloaded from UIDAI
portal as ‘Officially Valid
Documents’ for KYC norms
under PML Rules
15.
12974/AML &
KYC/2013-14/20
20.03.2014
Identification & Completion of
KYC of Beneficial Owners
Guidelines on identification &
completion of KYC norms of
Beneficial Owners of the
accounts
Consolidated guidelines on KYC norms and AML measures
Page 119 of 122
Sl.
No.
16.
Instruction
Circular No.
12975/AML &
KYC/2013-14/21
Date
Subject
Gist of Circular
22.03.2014
Reporting of Suspicious
transactions Election
expenditure monitoring
Monitoring of transaction over
Rs.50,000 in the accounts of
politically exposed person as
well as walk-in-customers
based on the directions of
Election Commission
17.
12976/AML &
KYC/2013-14/22
22.03.2014
Election Expenditure
Monitoring Challenges in
Intelligence Gathering and
Sharing
Obtaining specific mandate
from account holders
(candidate and their relatives)
for disclosure of information
of their accounts during
Election Process
18.
13013/AML &
KYC/2014-15/01
07.04.2014
Know your customer(KYC)
Norms/Anti-Money
Laundering (AML)
Standards/Combating of
Financing of Terrorism
(CFT)/Obligations of banks
under Prevention of Money
laundering Act PMLA,2002Harmonization of KYC norms
for Foreign Portfolio
Investors(FPIs)
Detailed guidelines of KYC
norms for Foreign Portfolio
Investors(FPIs)
19.
13030/AML &
KYC/2014-15/02
16.04.2014
Operation of Bank Accounts
& Money Mules- Suspicious
Transactions Reports9STRs)
for incidents of Account
Lending activity
Alertness towards Account
Lending activity and reporting
of the same for preparation of
STRs
13052/AML &
KYC/2014-2015/03
13.05.2014
Sharing of KYC Documents
by the Banks in Fraud Cases
Sharing copies of KYC
documents to collecting
banks in case of fraud
21.
13084/AMl&
KYC/2014-2015/04
05.06.2014
On-line PAN verification
Verification of online PAN
through NSDL and deletion of
invalid PAN
22.
13114/AML &
KYC/2014-15/05
20.06.2014
Proof of Address- Know your
customer(KYC) Norms/AntiMoney Laundering (AML)
Standards/Combating of
Financing of Terrorism
(CFT)/Obligations of banks
under Prevention of Money
laundering Act PMLA,2002
Relaxation in address proof
for migrant workers,
transferred employees etc.
20.
Consolidated guidelines on KYC norms and AML measures
Page 120 of 122
Sl.
No.
Instruction
Circular No.
Date
Subject
Gist of Circular
23.
13194/AML &
KYC/2014-15/06
14.07.2014
Offline Alerts-STR
Submission
Reporting of suspicious
transaction from branch level
based on Offline Alert
Parameters.
24.
13295/AML &
KYC/2014-15/11
09.09.2014
Know your customer(KYC)
Norms/Anti-Money
Laundering (AML)
Standards/Combating of
Financing of Terrorism
(CFT)/Obligations of banks
under Prevention of Money
laundering Act PMLA,2002Client Due Diligence
measures
Requirement of positive
confirmation for medium &
low risk customers has since
been dispense with.
Consolidated guidelines on KYC norms and AML measures
Page 121 of 122
INVENTORY
Sl. No.
1.
Particulars
Definition of Customer
Page No.
7
2.
Definition of Transactions
7
3.
Risk Categorisation
13
4.
Beneficial Owners
18
5.
Accounting opening of close relatives viz. wife, son, daughter & parents
19
6.
Shifting of bank accounts to another centre – Proof of address
20
7.
Periodical updation of Customer Identification Data
20
8.
Officially Valid Documents for Proof of Identity & Proof of Address
22
9.
Obtaining PAN/GIR/Form60/Form61 and verification of PAN with NSDL data
22
10.
KYC verification for SHG
26
11.
Simplified KYC for Low Income Group
27
12.
Accounts of Politically Exposed Persons (PEPs)
30
13.
Accounts of Foreign Students
31
14.
Simplified KYC norms for Foreign Portfolio Investors (FPIs)
33
15.
Money Mules
34
16.
Small Account
35
17.
Financial Inclusion (FI)
38
18.
Operations in New Accounts
39
19.
Accounts of Multi Level Marketing (MLM)
40
20.
Offline Transaction Monitoring and reporting of STRs
42
21.
Monitoring of structured cash transactions
43
22.
White-listing of accounts for AML system
43
23.
Terrorist Finance – Monitoring of account opening
45
24.
25.
Freezing of Assets
Maintenance & Preservation of Records
46
53
26.
Cash Transaction Report (CTR)
57
27.
Counterfeit Currency Report (CCR)
58
28.
Suspicious Transaction Report (STR)
58
29.
Non-Profit Organisation Transaction Report (NTR)
60
30.
Cross-border Wire Transfer Report (CWTR)
60
31.
Roles & Responsibilities of bank’s officials
62
32.
Nodal Officer
64
33.
Designated Director
66
34.
Principal Officer
67
35.
36.
Proof of Identity & Proof of Address for Individuals
Documents to be obtained for different types of accounts
72
72
37.
A/C opening form for FI accounts
79
38.
39.
Alert Scenarios for detection of Suspicious Transactions
Customer Risk Profile Format
81
100
Consolidated guidelines on KYC norms and AML measures
Page 122 of 122