SOUND MIND LEADS TO SAFE
BANKING
KNOW YOUR CUSTOMER
What is KYC?
“KYC (Know Your Customer) is a framework
for banks which enables them to know /
understand the customers and their financial
dealings to be able to serve them better.”
All banks have been advised by The Reserve Bank
of India (RBI) to follow certain ‘KYC Guidelines’
Objectives of KYC
 To enable the Bank to
identification of its relationship
have
positive
 Is in the interest of customers to safeguard their
hard earned money
When does KYC apply?
KYC will be carried out at the following stages:
 Opening a new account
 In respect of accounts where documents as per current KYC
standards have not been submitted while opening the initial
account
 Opening a Locker Facility where these documents are not
available with the Bank for all the Locker facility holders
 When the Bank feels it necessary to obtain additional
information from existing customers based on conduct of
account
 When there are changes to signatories, mandate holders,
beneficial owners etc.
 For non-account holders approaching the Bank for high
value one-off transactions like Drafts, Remittances etc.
Proof needed from customers
regarding KYC
RBI mandates three proofs to be collected from customers:
 Photograph
 Proof of identity
 Proof of address
These are to be submitted by the customer both at the time
of opening of account as well as at the time of change of
address.
Small Deposit Accounts
 Small deposit accounts are those accounts where,
 Balance does not exceed Rs. 50,000/- and
 Annual turnover does not exceed Rs. 1,00,000/-
 Simplified KYC norms prescribed for Small Deposit
accounts
 Customers can open this type of accounts by
getting introduced by existing fully KYC compliant
account as also attestation of address / photograph
by him.
Contact Point in Banks for
KYC
 Contact point for customers in the Bank will be the
Relationship Manager / official who opens the account and
is the contact person during transactions
MONEY LAUNDERING
What is Money Laundering?
 Money laundering refers to the conversion of money
illegally obtained to make it appear as if it originated from
a legitimate source.
 It is being employed by launderers worldwide to conceal
proceeds of criminal activity associated with it, such as
drugs / arms trafficking, terrorism and extortion.
Effect on Customers
 For prevention of opening of accounts in false identities,
Banks have to ask for proof of customer’s identity and
address during opening of new accounts
 Being asked for these documents does not imply that the
customers are suspected of money laundering
 It is a necessity to identify all prospective account holders
or customers as anybody including a criminal could
falsely use another customer’s identity, if the respective
documents are not obtained.
What proof of identity will you
need?
 Best identification documents are those issued by a
Government authority, having a photograph, address and
signature
 One document can be used to establish both identity and
address, else two or more documents will suffice
Some proofs of Identity &
Address for Individuals:
 Passport
 Election ID card
 Driving License
 Voter ID card
Proofs of Identity & Address for
companies, Trusts, Firms:
 Partnership Deed
 Trust Deed
 Memorandum & Articles of
Association
 Certificate of Incorporation etc.
What proof of identity will you
need? (Contd.)
Documents used for
Identity only for
individuals:
Documents used for
Address only for
individuals :
 Pan card
 ID card of reputed
employers
Salary Slip
Electricity Bill
Telephone Bill
Ration Card
Prevention of Money
Laundering Act (PMLA) 2002
 Mandates banks to report certain transactions to the
nominating agency under instructions issued by RBI in
consultation with the Indian Government and Indian
Bank’s Association
 It specifies that,
 Demand drafts, mail transfers and travelers cheques for Rs.
50,000/- and above can be issued only by debit to customer’s
account or cheque etc, and not against cash payment
 Demand drafts, mail transfers and travelers cheques for Rs.
50,000/- and above can be paid by banks only by credit to
customer’s account or through other banking channels and not
cash
Help us to Help You
 By being patient when a Bank staff asks you to
provide documents to prove your identity /
address
 By maintaining confidentiality of your account
details and identity documents
For any further queries, please contact
1800112211 (tollfree from BSNL/MTNL) or 080-26599990.