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ALLAHABAD BANK
HEAD OFFICE, AML & KYC CELL
Page 1 of 121
INDEX
Paragraph
Particulars
Page No.
Chapter -1 Introduction
1.1
Definition of Customer
1.2
Definition of Transactions
1.3
General Guidelines
1.4
f)
10
10
10
i)
10
j)
10
10
KYC Policy
11
Chapter - 2 Customer Acceptance Policy
2.1
12
2.2
Customer Profile
13
2.3
Risk Cartegorisation
13
2.4
13
15
15
Guidelines
16
Chapter - 3 Customer Identification Procedure
3.1
17
17
17
17
d) Beneficial Owners
18
19
f)
19
Page 2 of 121
19
Paragraph
3.2
Particulars
h) Shifting of bank accounts to another centre Proof of address
20
i)
20
j)
22
22
22
22
D. Other Requirements
24
E. Photograph
25
26
26
27
3.4
22
I.
3.3
Page No.
Walk-in Customer
27
28
28
28
28
29
29
30
30
30
31
32
A. Correspondent Bank
32
32
33
3.5
33
3.6
34
3.7
34
3.8
Small Account
35
3.9
A. Small accounts
35
36
38
Page 3 of 121
Paragraph
Particulars
Page No.
39
4.2
39
4.3
40
41
42
43
43
4.4
44
4.5
44
4.6
Terrorist Finance
45
4.7
46
4.8
50
4.9
50
4.10
Wire Transfer
51
52
52
4.11
Closure of accounts
53
4.12
53
53
2. Information to be preserved
55
55
56
a)
57
b)
58
c)
58
d)
60
e)
60
61
62
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Paragraph
Particulars
Page No.
63
63
b) Branch Manager
63
63
d) Nodal Officers
64
64
f)
64
5.2
64
5.3
65
5.4
65
5.5
Retention of Records
65
5.6
Customer Education
65
5.7
65
5.8
66
5.9
66
5.10
Designated Director
66
5.11
Principal Officer
67
5.12
67
Page 5 of 121
Paragraph
Particulars
Page No.
Appendix -I
68
Appendix -II
72
Appendix-III
75
Appendix-IV
76
Appendix-V
77
Appendix-VI
79
Appendix-VII
81
Appendix-VIII
87
Appendix-IX
89
Appendix-X
92
Appendix-XI
98
Appendix-XII
Risk Profile
100
Appendix-XIII
102
Appendix-XIV
108
Appendix-XV
109
Appendix-XVI
List of Circulars on Know Your Customer (KYC) Guidelines issued from July
2013
115
INVENTORY
--
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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]
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.
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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 customers 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/bankers 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.
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)
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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)
(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/Bankers Cheque/Inter Office Instrument for Rs.50,000 and above
Branches must not accept cash for issuing of Demand Drafts(DD) / Bankers Cheque(BC) /
Inter-Office-Instrument (IOI) of Rs.50,000 and above to customers / walk-in customers.
j)
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1.5
KYC Policy
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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 customers 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)
(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)
(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)
(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)
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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Businessmen/ Traders whose activities are well defined and transactions in the accounts
commensurate with the business transactions.
People belonging to lower economic strata of society and whose accounts show small
balances and low turn over.
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 RBIs 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)
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)
Customers that are likely to pose a higher than average risk should be categorized as Level - III
(High risk) depending upon customers back ground, nature and location of activity, country of
origin, source of funds and his clients 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.
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.
Non-resident customers.
Funds coming from the list of countries/ centers which are known for money laundering.
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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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)
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 21 st
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.
(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)
(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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Page 20 of 121
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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.
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.
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 and
Page 22 of 121
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.
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
Page 24 of 121
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.
Page 25 of 121
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 is not mandatory for opening an account. Since introduction is not necessary for
opening of accounts under PML Act and Rules or Reserve Banks 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 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.
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 Banks 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
introducers 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
b) Any other evidence as to the identity and address of the customer to the satisfaction of the bank.
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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
employer, at least one of the officially valid documents as provided in the Prevention of Money
Laundering Rules (viz. passport, driving licence, PAN Card, Voters 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.
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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
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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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.
ii.
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.
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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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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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ii)
If the prospective customer knows only his/her Aadhaar number, the bank may print
the prospective customers 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 customers 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)
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ii)
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
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Page 38 of 121
Chapter - 4
Monitoring of Transactions
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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.
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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Watch list (WL) The customer details matched with watch lists (eg. UN list, Interpol list etc)
Transaction monitoring (TM) Transaction monitoring alert (e.g. unusually large transaction,
increase in transaction volume etc.)
Risk Management System (RM) Risk management system based alert (e.g. high risk
customer, country, location, source of funds, transaction type etc.)
B.
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
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.)
Media Reports (MR): Adverse media reports about customer. (e.g. newspaper reports)
Employee Initiated (EI): Employee raised alert (e.g. behavioral indicators such as customer
had no information about transaction, attempted transaction etc.)
Public Complaint (PC): Complaint received from public (e.g. abuse of account for committing
fraud 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 customers 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) / Bankers
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.
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 CUSTOMERS 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 customers 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 :
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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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)
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)
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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.
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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
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.
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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 originators
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.
(b) Intermediary bank
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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
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.
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.)
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, bankers 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)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
payment orders, or
bankers cheques, or
demand drafts, or
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
remittances for credit or loading to electronic cards, or
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)
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)]
Page 55 of 121
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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.
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 banks 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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Broad categories of reason for suspicion and examples of suspicious transactions are indicated as
under :
Reason Examples of suspicious transactions
Identity of client
Background of client
Multiple accounts
Activity in accounts
Nature of
transactions
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 clients 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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Description
Non-Personal Trust
Non-Personal Clubs
Non-Personal Associations
Non-Personal NGOs
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 27 th 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
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.
Page 61 of 121
Page 62 of 121
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. Banks 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 banks 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 arrive at threshold limit for each account and to exercise due diligence in identifying
suspicious transactions.
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.
Page 63 of 121
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 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 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.
Page 64 of 121
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]
Page 65 of 121
Page 66 of 121
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.
Page 67 of 121
Appendix 1
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.
Page 68 of 121
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.
Page 69 of 121
Page 70 of 121
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.
Page 71 of 121
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) Voters 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
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.
Page 72 of 121
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
Page 73 of 121
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
Page 74 of 121
Appendix-III
Foreign Portfolio Investors (FPIs) categorized by SEBI
Category
I.
II.
a)
b)
c)
d)
e)
III.
Page 75 of 121
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
Proof of
Exempted *
Exempted *
Management
Identity
(Whole Time
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.
Page 76 of 121
Appendix - V
Government of India
Ministry of Finance
(Department of Revenue)
Notification
New Delhi, the 16th 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.
Page 77 of 121
(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, SibSection (i) vide number G.S.R.444 (E), dated the 1 st July, 2005 and subsequently amended by
number G.S.R.717 (E), dated the 13 th December, 2005, number G.S.R. 389(E), dated the 24th May,
2007, number G.S.R. 816(E), dated the 12 th November, 2009, number G.S.R.76 (E), dated the 12 th
February, 2010 and number G.S.R. 508(E), dated the 16th June, 2010. 59
Page 78 of 121
Appendix - VI
FINANCIAL INCLUSION
ALLAHABAD
FOR INDIVIDUALS
VILLAGE/TOWN
DISTRICT
Please open an Account as per information given below.
Appropriate Boxes
)
First Applicant / Sole Applicant:
FULL NAME
Mr./Mrs./Ms
FATHERS/
HUSBANDS
NAME Mr.
MOTHERS
NAME Mrs.
DATE OF BIRTH
First
(Please
fill
in
TEL. No.
GENDER ( )
Aadhar No.
OPERATING
INSTRUCTIONS
( )
ADDRESS
Sole/First
Applicant
S. No.
1.
2.
3.
4.
By
Me
Jointly
By
Any Two
SC
Any
of
Us/
Survivor
Affix
Photograph
Others (Specify)
CATEGORY ( )
OBC
Tick
Business
Service
Voter ID No.
OTHER
General
and
OCCUPATION ( )
Agriculturi
st
Housewife
Email ID
Letters
Last
MOBILE No.
STATE
CAPITAL
Date:________________________________
Middle
BANK
(www.allahabadbank.in)
Branch:
Code:
RELEGION ( )
ST
Former or
Survivor
Others
On
behalf
Minor
by Guardian
Hindu
of
Muslim
Others
Specify
Sikh
Christian
Others
Present
Permanent
PIN
PIN
Particulars ( )
Rupay Card / Debit Card
Internet Banking Facility
Mobile Banking Facility
Nomination Facility
Yes
No
I nominate following person to whom in the event of my/minors 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
* DoB if
Deposit
Details
Depositor
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
Witness 1
Name
Address
Signature
Witness 2
Name
Address
Signature
=====================================================================================================================
Page 79 of 121
CUT HERE
------------------------------------------------------------
Nomination Registered
---------------------------------------------
Branch
The above mentioned nomination is registered at Serial No. ___________________ in respect of (Type of A/c)---------Deposit A/C
No._______________________
For Allahabad Bank
S.S. No.)
FINANCIAL INCLUSION
ALLAHABAD
BANK
(www.allahabadbank.in)
Branch:
Code:
FOR INDIVIDUALS
LIST 1
LIST 2
Sl.
No.
1.
1.
2.
2.
3.
3.
4.
4.
5.
Aadhar Card
5.
6.
6.
( )
Tick
Sl.
No.
( )
Tick
CIF No.
Branch Name
Account No.
Type of A/c
Date of Opening of A/c
Mobile No.
E Mail
(Signature)
FOR BANKS USE ONLY
PROCESSING FOR OPENING OF ACCOUNT
ACCOUNT No.
`_____________________
Page 80 of 121
d.
Recommended
Name, S.S. No. & Signature
Authorized Official
------------------------------------------------------------
Sanctioned
Name, S.S. No. & Signature of
CUT HERE
-------------------------------------------------
Page 81 of 121
Appendix -VII
ALERT SCENARIOS INDICATED BY IBA STUDY FOR
DETECTION OF SUSPICIOUS TRANSACTIONS
Sl
Code
WL1.1
Match
of
customers
details
individuals/entities on various UNSCR lists.
WL1.2
WL1.3
Indicator
Rule/ Scenario
with
WL2.1
TM1.1
TM1.2
TM1.3
10
TM1.4
TM2.1
TM2.2
Page 82 of 121
Sl
Code
Indicator
Rule/ Scenario
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
TM2.3
12
TM2.4
13
TM3.1
14
TM3.2
15
TM3.3
16
TM4.1
17
TM4.2
18
TM5.1
19
TM5.2
TM6.1
TM6.2
TY1.1
11
20
21
22
Page 83 of 121
in newly
Sl
Code
23
TY1.2
24
TY1.3
25
TY1.4
26
TY1.5
27
TY1.6
28
TY2.1
29
TY2.2
30
TY2.3
31
TY3.1
TY3.2
TY4.1
TY4.2
32
33
34
Indicator
Rule/ Scenario
Page 84 of 121
Sl
35
36
37
Code
Indicator
Rule/ Scenario
TY4.3
TY4.4
TY4.5
38
TY5.1
Majority of repayment in
cash
39
TY5.2
40
TY5.3
41
TY5.4
42
TY5.5
43
TY5.6
44
TY7.1
45
TY7.2
TY7.3
46
Page 85 of 121
Sl
Code
47
TY7.4
48
RM1.1
49
RM1.2
50
RM1.3
51
RM1.4
52
RM2.1
using
53
RM2.2
value
54
RM2.3
RM2.4
Inward remittance
inconsistent with client
profile
RM3.1
57
RM3.2
58
RM3.3
55
56
Indicator
Rule/ Scenario
than
than
INR[X]
[X]
Page 86 of 121
in
Sl
Code
Indicator
Rule/ Scenario
59
RM4.1
Transactions involving a
country with high TF risk
60
RM4.2
Transactions involving a
location with high TF risk
RM4.3
Transactions involving a
location with terrorist
incident.
61
Page 87 of 121
Appendix -VIII
OFFLINE ALERT INDICATORS PROVIDED BY IBA STUDY
FOR DETECTION OF SUSPICIOUS TRANSACTIONS AT BRANCHES
Sl.
No.
Alert Indicator
3
4
10
11
12
13
14
15
Page 88 of 121
Sl.
No.
16
17
18
19
20
21
Alert Indicator
22
23
24
25
26
27
Page 89 of 121
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 travellers cheques.
d. Frequent withdrawal of large cash amounts that do not appear to be justified by the customers
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
customers business activities furnish a plausible reason for immediate withdrawal.
Activities not consistent with the Customers Business
h.
Corporate accounts where deposits or withdrawals are primarily in cash rather than cheques.
i.
j.
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.
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.
Page 90 of 121
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 customers 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.
Page 91 of 121
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
Page 92 of 121
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",
(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.
Page 93 of 121
(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.
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.
Page 94 of 121
(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.
Page 95 of 121
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.
Implementation of requests received from foreign countries under U.N. Security Council
Resolution 1373 of 2001.
Page 96 of 121
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.
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,
Page 97 of 121
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.
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.
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.
(D .Diptivilasa)
Joint Secretary to Government of India
Page 98 of 121
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 customers 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 customers 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 persons 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.
Page 99 of 121
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 :
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.
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/Pensioners A/c)
Movable Assets
Immovable assets
Appendix -XIII
List of firms advised by RBI posing as Multi Level Marketing (MLM) Agencies
a.
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
Bihar
Bihar
Patna
Nalanda
State - Assam
Sl.
No.
1.
State - Bihar
Sl.
No.
1.
2.
State - Chattisgarh
Union Territories - Chandigarh, Dadra Nagar Haveli and Daman Diu
Sl.
No.
1.
2.
3.
4.
5.
6.
Name
Location
City
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
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
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.
Sl.
No.
1.
2.
3.
4.
5.
6.
Name
Location
City
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
Maharashtra
Maharashtra
Uttaranchal
Maharashtra
Uttar Pradesh
Uttar Pradesh
Mumbai
Mumbai
Dehradun
Mumbai
Farrukabad
Lucknow
Name
Location
City
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
Location
City
State - Jharkand
Sl.
No.
1.
2.
3.
4.
5.
6.
State - Karnataka
Sl.
No.
1.
2.
3.
State - Kerala
Sl.
No.
Name
1.
speakkerala
Kerala
Kochi
Name
Location
City
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
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Mumbai
Mumbai
Mumbai
Nashik
Pune
Nagpur
Mumbai
Vashi
Pune
Mumbai
Navi Mumbai
Dahanu
Mumbai
Mumbai
Mumbai
Mumbai
Mumbai
Mumbai
Amravati
Sl.
No.
1.
2.
3.
4.
5.
6.
Sl.
No.
1.
2.
3.
4.
5.
State - Maharashtra
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Maharashtra
Sanpada Navi
Mumbai
Name
Location
City
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
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
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
State Orissa
Sl.
No.
1.
State Punjab
Sl.
No.
1.
2.
3.
4.
5.
State Rajasthan
Sl.
No.
1.
2.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
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
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
Uttaranchal
Uttaranchal
Uttaranchal
Dehradun
Dehradun
Haridwar
Name
Location
City
West Bengal
Kolkata
State Uttaranchal
Sl.
No.
1.
2.
3.
Appendix - XIV
Appendix - XV
Changes incorporated in the current consolidated guidelines vis--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
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
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)
6.
Chapter-3,
Para3.1(b)
Nil
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
(As per last
Policy vide
IC 12808
dated
16.12.2013)
Existing
Guideline
Revision proposed
Rationale/Remarks
Sl.
No.
Chapter/
Paragraph
Revision proposed
Rationale/Remarks
7.
Chapter-3,
Para3.1(c)
Nil
8.
Chapter-3,
Para3.1(d)
Definition of
Beneficial
Owners
modified
9.
Chapter-3,
Para3.1(e)
Nil
10.
Chapter-3,
Para3.1(h)
Norms of
Proof of
Address in
case of
shifting has
been
amended
11.
Chapter-3,
Para3.1(i)/(iii)
Clarification
of Full KYC
12.
Chapter-3,
Para3.1(i)/(v)
Requirement
of positive
confirmation
at specific
intervals for
medium &
low risk
customers
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
(As per last
Policy vide
IC 12808
dated
16.12.2013)
Physical
presence of
customers at
time of
periodic
updation
Revision proposed
Rationale/Remarks
13.
Chapter-3,
Para3.1(i)/(vi)
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
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
18.
Chapter-3,
Para3.2(D)
Nil
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
(As per last
Policy vide
IC 12808
dated
16.12.2013)
Revision proposed
Rationale/Remarks
27.08.2013
19.
Chapter-3,
Para3.3(vi) (c)
Nil
20.
Chapter-3,
Para-3.4
(A,B&C)
Nil
Guidelines on
(a) Correspondent Bank,
(b) Correspondent relationship with a
Shell Bank
(c) Due Diligence in Correspondent
Banking Relationship
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
21.
Chapter-3,
Para-3.5
Nil
22.
Chapter-3,
Para-3.8 A
Opening of
Small
Account
23.
Chapter-3,
Para-3.8.
B (b&c)
Officially
Valid
Documents
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
27.
Chapter-4,
Para4.3(e)
Multi Level
Marketing
28.
Chapter-4,
Para-4.3.3
Monitoring of
cash
transactions
within
threshold
limit of
Rs.50,000
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
29.
Chapter-4,
Para-4.6
30.
Chapter-4,
Para4.7(ix)
Monitoring to
prevent
money
laundering for
Terrorist
Finance (TF)
Nil
31.
Chapter-4,
Para4.12(1)
Maintenance
of records of
transactions
in respect of
CTR
32.
Chapter-4,
Para4.12(3)
33.
Chapter-4,
Para4.12(4)
Maintenance
of records of
transactions
&
identification
of the
customers
Guidelines on
CTR
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
Sl.
No.
Chapter/
Paragraph
Existing
Guideline
Revision proposed
Rationale/Remarks
37
Chapter-4,
Para4.12(5)
Nil
38.
Chapter-5
Nil
39.
Chapter-5
(5.1)
Chapter-5
(5.7)
Nil
Introduction
of New
Technologie
s
41.
Chapter-5
(5.10)
Nil
42.
Chapter-5
(5.11)
Principal
Officer
43.
Appendix-II
Documents
to be
obtained for
different
types of
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.2.15
Banks 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.26/14.01.001/2013
-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.2.23(b)
RBI Cir
DBOD.AML.BC.
No.26/14.01.001/2013
-14 dated 17.07.2014
& Govt. of India
Notification dated
27.08.2013
44.
Appendix-III
Nil
40.
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
4.
12677/AML &
KYC/2012-13/08
26.09.2013
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.
22.10.2013
7.
12738/AML &
KYC/2013-14/11
29.10.2013
8.
12750/AML &
KYC/2013-14/12
12.11.2013
Sl.
Instruction
Date
Subject
Gist of Circular
No.
9.
Circular No.
12753/Dev/201314/13
10.
18.11.2013
Non-Resident Ordinary
Account(NRO Account),Compliance of Guidelines
12760/AML &
KYC/2013-14/14
21.11.2013
11.
12776/AML &
KYC/2013-14/15
28.11.2013
Due diligence in
Correspondent Banking
Relationship
Incorporation of clause
indicating banks 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
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
14.
12951/AML &
KYC/2013-14/19
08.03.2014
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
Sl.
Instruction
Date
Subject
Gist of Circular
No.
16.
Circular No.
12975/AML &
KYC/2013-14/21
17.
22.03.2014
Reporting of Suspicious
transactions Election
expenditure monitoring
12976/AML &
KYC/2013-14/22
22.03.2014
Election Expenditure
Monitoring Challenges in
Intelligence Gathering and
Sharing
18.
13013/AML &
KYC/2014-15/01
07.04.2014
19.
13030/AML &
KYC/2014-15/02
16.04.2014
13052/AML &
KYC/2014-2015/03
13.05.2014
21.
13084/AMl&
KYC/2014-2015/04
05.06.2014
22.
13114/AML &
KYC/2014-15/05
20.06.2014
20.
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
Requirement of positive
confirmation for medium &
low risk customers has since
been dispense with.
INVENTORY
Sl. No.
1.
Particulars
Definition of Customer
Page No.
7
2.
Definition of Transactions
3.
Risk Categorisation
13
4.
5.
Beneficial Owners
Accounting opening of close relatives viz. wife, son, daughter & parents
18
19
6.
20
7.
20
8.
22
9.
22
10.
26
11.
27
12.
30
13.
31
14.
33
15.
Money Mules
34
16.
Small Account
35
17.
38
18.
39
19.
40
20.
42
21.
43
22.
43
23.
45
24.
25.
Freezing of Assets
Maintenance & Preservation of Records
46
53
26.
57
27.
58
28.
58
29.
60
30.
60
31.
62
32.
33.
Nodal Officer
Designated Director
64
66
34.
Principal Officer
67
35.
36.
72
72
37.
79
38.
39.
81
100