Kyc 2017

MAIN: GENL-14/2017-18 A DATE 27.04.
2017
SUB : CUST - 02 CO: AML CELL FILE M-6 S - 106
Sub: Master Circular on Know Your Customer (KYC)/Anti Money Laundering

(AML) / Combating Financing of Terrorism (CFT)
Money laundering involves disguising financial assets so that these can be used without
detection of the illegal activities that produce them. Through money laundering, the
launderer transforms the monetary proceeds derived from criminal activities into funds with
an apparently legal source. In simple words, it is a process of converting dirty money into
good money.
Trade Based Money Laundering (TBML) is considered as one of the main methods by
which criminal organizations and terrorist financiers move money for the purpose of
disguising its origins and integrating it back into the formal economy, by adopting
techniques by over-invoicing, under-invoicing, multiple invoicing, presenting fake import
bills to banks, etc.
To prevent banks from being used, intentionally or unintentionally, by criminal elements for
money laundering or terrorist financing activities, KYC guidelines are to be strictly adhered
to by branches. By not adhering to KYC procedures, bank is exposed to reputational,
operational and compliance risks
In view of the above, branches should know or understand their customers, their financial
dealings at the time of entering into account based relationship by obtaining the
mandatory information from the customer, collecting the prescribed documents, verifying
the credentials and entering all the data in the system.
This Master Circular is issued for guidance to branches in the area of KYC/AML
procedures. The major elements of the KYC guidelines can be classified as below:
Customer Identification:
The customers who intend to have an account based relationship with the bank or put
through any transaction through our Bank (walk-in-customers), should be identified by
obtaining Officially Valid Documents depending on the customer type.
Customer Unification:
All the customers are identified with a unique Customer Number (CIF) and all the accounts
of the customer should be brought under one CIF. Branches should use the reports
pushed by Project Office in the Help Desk for the customer deduplication.
Periodical updation of KYC:

Full KYC exercise should be undertaken once in 2 years for High Risk Customers, once in
8 years for Medium Risk Customers and once in 10 years for Low Risk Customers. Such
documents obtained should be maintained properly at the branches.
Master Circular on KYC/AML/CFT
Fixing of Threshold Limits:

The threshold limit for each customer should be fixed based on the income / turnover for
monitoring of the transactions beyond the threshold limit.
Customer Risk Categorisation:

Review of risk categorisation should be done for all customers once in 6 months,
depending on the customer type and turnover.
Monitoring of transactions:
Transactions are to be monitored to ensure that they are consistent with the profile/activity
of the customer. Suspicious transaction, if any, should be reported immediately.
Combating Financing of Terrorism:

In terms of PMLA Rules, 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. Three caution lists, viz. Al-Qaida, Taliban and OFAC lists
are available in Help Desk->Desk Officer->Forex->Caution List. Branches can verify the
lists in cases of suspicion at the time of opening an account or any other transaction.
The detailed procedures to be followed by the branches to comply with the above
requirements are given in the annexure.
Since non-compliance of KYC/AML/CFT guidelines is a serious issue and will attract

penalty from the regulators, branc5hes are advised to strictly adhere to the guidelines.
K CHANDRA REDDY
General Manager (I&C)
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INDEX
SNo Topics Page
Definitions 4
Know Your Customer (KYC) 6
1 Customer Acceptance 6
2 Customer identification procedure 6
2.1 Customer Identification -Specific Requirements 6
2.2 Customer Identification for various types of customers 7
2.3 Customer Due Diligence Requirements while opening accounts 8
1. Individuals 8
2. Relaxed Norms for Walk-in Customers 9
3. Self Help Groups 11
4. Small Accounts 11
5. Proprietorship 12
6. Partnership 13
7. Companies 14
8. Trusts and Foundations 15
9. Unincorporated association or body of individuals 16
10.Schools, Colleges, etc. 17
11.Foreign Students studying in India 18
12.AML guidelines with regard to Lockers 19
2.4 Enhanced Due Diligence for specific customers 20
2.5 Simplified KYC norms for Foreign Portfolio Investors (FPIs) 21
2.6 Periodic Updation of KYC Details 21
3. Remittances/ Wire Transfers / Sale of third party products 22
3.1 Remittances-Demand Drafts/NEFT/RTGS/Travellers Cheques 22
3.2 Selling of Third Party Products 23
3.3 Sale of Bank's own products/Credit Cards/Prepaid Travel Cards 23
3.4 International Money Transfer Operations 23
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3.5 Transactions relating to Foreign Exchange 24

3.6 Rupee Drawing Arrangement 25
3.7 Franchisee Arrangement 25
3.8.Correspondent Banks 25
4 Walk-in Customers / KYC Requirements 26
5 Fixation of Threshold Limits 30
6 Monitoring of Transactions 30
7 Risk Management 32
7.1 Customer Risk Categorisation & Periodic Review 32
7.2 Turnover/Income Criteria for Customer Risk Categorisation 34
7.3 Review of Customer Risk Categorisation 34
7.4 Accounts of Multi Level Marketing Firms 35
7.5 Money Mules 35
7.6 Closure of non-KYC complied accounts 36
8 Suspicious Transaction Reports (STR) 36
8.1 Alert Indicators 37
9 Combating Financing of Terrorism 39
10 Central KYC Registry 41
11 Record Management 41
12 Reporting Obligations to FIU 42
13 Other guidelines 43
14 Compliance to FATCA/CRS regulations 47
Annexure I - Format for details of Beneficial Owners 51
Annexure II -KYC documents for eligible Foreign Portfolio Investors 52
Annexure III - Format for KYC-Walk-in-Customer Profile 54
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Definitions
(i) Act and Rules means the Prevention of Money-Laundering Act, 2002 and the Prevention of
Money-Laundering (Maintenance of Records) Rules, 2005, respectively and amendments thereto.
(ii) Transaction means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement
thereof and includes:
a. opening of an account;
b. deposit, withdrawal, exchange or transfer of funds in whatever currency, whether in cash

or by cheque, payment order or other instruments or by electronic or other non-physical
means;
c. the use of a safety deposit box or any other form of safe deposit;
d. entering into any fiduciary relationship;
e. any payment made or received, in whole or in part, for any contractual or other legal
obligation; or
f. establishing or creating a legal person or legal arrangement.
iii) Common Reporting Standards (CRS) means reporting standards set for implementation of
multilateral agreement signed to automatically exchange information based on Article 6 of the
Convention on Mutual Administrative Assistance in Tax Matters.
iv) Customer means a person who is engaged in a financial transaction or activity with a
Regulated Entity (RE) and includes a person on whose behalf the person who is engaged in the
transaction or activity, is acting.
(v) Walk-in Customer means a person who does not have an account based relationship with the
RE, but undertakes transactions with the RE.
(vi) Beneficial Owner (BO) is the natural persons(s), who, whether acting alone or together,
or through one or more juridical person, has/have a controlling ownership interest or who
exercise control through other means.
(vii) Customer Due Diligence (CDD) means identifying and verifying the customer and the
beneficial owner using Officially Valid Documents as a proof of identity and a proof of
address.
(viii) Customer identification means undertaking the process of CDD.
(ix) FATCA means Foreign Account Tax Compliance Act of the United States of America
(USA) which, inter alia, requires foreign financial institutions to report about financial accounts
held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership
interest.
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(x) Central KYC Registry (CKYCR) means an entity defined under Rule 2(1)(aa) of the PML
Rules, to receive, store, safeguard and retrieve the KYC records in digital form of a customer.
(xi) Non-face-to-face customers means customers who open accounts without visiting the
branch/offices of the Bank or meeting the officials of banks.
(xii) On-going Due Diligence means regular monitoring of transactions in accounts to ensure that
they are consistent with the customers profile and source of funds.
(xiii) Periodic Updation means steps taken to ensure that documents, data or information
collected under the CDD process is kept up-to-date and relevant by undertaking reviews of existing
records at periodicity prescribed by the Reserve Bank.
(xiv) Politically Exposed Persons (PEPs) are individuals who are or have been entrusted with
prominent public functions in a foreign country, e.g., Heads of States/Governments, senior
politicians, senior government/judicial/military officers, senior executives of state-owned
corporations, important political party officials, etc.
(xv) Simplified procedure means the procedure for undertaking customer due diligence in respect
of customers, who are rated as low risk by the RE and who do not possess any of the six officially
valid documents, with the alternate documents prescribed in Page 10 'Address proof for Low Risk
Customers'.
(xvi) Shell bank means a bank which is incorporated in a country where it has no physical
presence and is unaffiliated to any regulated financial group.
(xvii) Wire transfer means a transaction carried out, directly or through a chain of transfers, 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.
(xviii) Domestic and cross-border wire transfer: When the originator bank and the beneficiary
bank is the same person or different person located in the same country, such a transaction is a
domestic wire transfer, and if the originator bank or beneficiary bank is located in different
countries such a transaction is cross-border wire transfer.
(xix) Non-Profit Organisation (NPO) means any entity or organization that is registered as a trust
or a society under the Societies Registration Act, 1860 or any similar State legislation or a company
registered under Section 8 of the Companies Act, 2013.
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Know Your Customer (KYC):
1. CUSTOMER ACCEPTANCE:
1.1 Branches should ensure the following guidelines before entering into an account based
relationship with the customer.
a) No account is opened (or kept) in anonymous or fictitious / benami name(s), where customer
identity has not been disclosed or cannot be verified.
b) Documentation and / or other information requirements are to be collected in respect of
different categories of customers, depending on perceived risk and keeping in mind the
requirements of PML Act, 2002 and instructions / guidelines issued by Reserve Bank of India /
Financial Intelligence Unit / Government of India etc from time to time.
c) Account should not be opened where the branch is unable to apply appropriate customer due
diligence (CDD) measures, either due to non cooperation of the customer or non reliability of
the data / information furnished by the customer.
d) CDD procedure is to be followed for all the joint account holders, while opening a joint
account.
e) Circumstances, in which a customer is permitted to act on behalf of another person / entity,
must be in conformity with the established law and practice of banking as there could be
occasions when an account is operated by a mandate holder or where an account is opened by
an intermediary in fiduciary capacity.
f) Before opening a new account branches should 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.
1.2 Customer Acceptance Policy shall not result in denial of banking/financial facility to members
of the general public, especially those, who are financially or socially disadvantaged.
2. CUSTOMER IDENTIFICATION PROCEDURE (CIP)
2.1 Identification of customers is required in the following cases:

(a) Commencement of an account-based relationship with the customer.
(b) Carrying out any international money transfer operations for a person who is not an account
holder of the bank.
(c) When there is a doubt about the authenticity or adequacy of the customer identification data
it has obtained.
(d) Selling third party products as agents, selling their own products, payment of dues of credit
cards/sale and reloading of prepaid/travel cards and any other product for more than rupees
fifty thousand.
(e) Carrying out transactions for a non-account based customer, that is a walk-in customer,
where the amount involved is equal to or exceeds rupees fifty thousand, whether conducted as
a single transaction or several transactions that appear to be connected.
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(f) When there is a reason to believe that a customer (account- based or walk-in) is
intentionally structuring a transaction into a series of transactions below the threshold of rupees
fifty thousand.
2.2. While undertaking customer identification, Branches should ensure that:
a) Decision making functions of determining compliance with KYC norms lies with the branch
official.
b) Introduction should not be insisted while opening accounts.
c) The customers are not required to furnish separate proof of address current address, if it is
different from the address recorded in the OVD. In such cases, a declaration from the
customer about his/her local address to which all correspondence is to be sent, is sufficient.
d) The local address for correspondence, for which their proof of address is not available, is to
be verified through positive confirmation such as acknowledgement of receipt of letter,
cheque books, ATM cards, telephonic conversation, visits to the place or the like.
e) In case if it is observed that the address mentioned as per proof of address has undergone a
change, branches should ensure that fresh proof of address is obtained within a period of six
months.
2.2. The Customer identification requirements in respect of different types of customers are given
below.
2.2.1. For customers who are natural persons:
The Branches should obtain sufficient data and documents to verify the
i. Identity of the customer/s,
ii. Address / location, and also
iii. Recent photograph.
2.2.2. For customers that are legal persons / juridical persons / entities:
The Branches should obtain sufficient data and documents to verify:
i. the identity / legal status / existence of the legal person / entity through proper and relevant
documents;
ii. The identity of persons acting as Proprietor, Partners, Directors, Trustees, Members of
Managing committee, Office bearers etc
iii. The ownership and control structure of the customer and determine who are the beneficial
owners (natural persons) who ultimately owns or controls the legal person and identity of
such beneficial owner/s.
iv. The identity of person purporting to act on behalf of the legal person/entity is so authorised
to do so with the support of a mandate or Power of Attorney and identify the person/s with
the help of officially valid documents.
2.2.3. Obtention of Photographs

Photographs are to be obtained at the time of opening the accounts, in the following manner
Type of account Photographs to be obtained from.
For individuals/Joint Accounts All parities to the account
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Partnership firms All partners

Limited Companies All directors
Clubs, Associations, Trustees, HUF All members of Managing committee.
2.3 Customer due Diligence requirements (CDD) while opening accounts
2.3.1. Accounts of individuals:
For opening accounts of individuals, branches should obtain one certified copy of an 'officially
valid document' containing details of identity and address, one recent photograph and such other
documents pertaining to the nature of business and financial status of the customer as may be
required by the branch.
The Officially Valid Documents for KYC compliance for different types of customers are furnished
below:
KYC REQUIREMENTS FOR DIFFERENT TYPES OF CUSTOMERS
1. Individual/s
A. Photograph (for all types of customers)
One recent photograph
B. For Photo ID proof (For Low, Medium & High Risk customers)
Any one of the Officially Valid Documents given below
1. Passport,
2. Driving license,
3. Permanent Account Number (PAN) Card,
4. The Voters Identity Card issued by Election Commission of India,
5. Job card issued by NREGA duly signed by an officer of the State Government,
6. The letter issued by the Unique Identification Authority of India containing
details of name, address and Aadhaar number
(a) The information containing personal details like name, address, age, gender
etc and photographs made available from UIDAI as a result of e-KYC
process will also be treated as an officially valid document
(b) Transfer of KYC data electronically from UIDAI is accepted as valid
process for KYC verification
Provided Branches/Business Correspondents obtain authoristion from the

individual user authorizing UIDAI by way of explicit consent to release his/her
identity/address through biometric authentication.
Branches can print/download directly, the prospective customers e-Aadhar

letter from the UIDAI portal or e-KYC procedure as above, if such a customer
knows only his/her Aadhar number or if the customer carries only a copy of the
e_Aadhar downloaded from a place/source elsewhere.
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For Photo ID proof (For Low Risk customers alone)
If a person does not have any of the officially valid documents mentioned above, but if
he is categorized as low risk by banks, then he/she can open a bank account by
submitting any one of the following documents:
7. Identity card with applicants photograph issued by Central/State Government

Departments, Statutory / Regulatory Authorities, Public Sector Undertakings,
Scheduled Commercial Banks, and Public Financial Institutions;
8. Letter issued by a gazetted officer, with a duly attested photograph of the
person
C. For Address Proof (For Low, Medium & High Risk customers)
1. Passport
2. Driving License
3. Voter identity card issued by Election Commission of India
4. Job Card issued by NREGA duly signed by an Officer of the State Govt
5. Letter issued by UIDAI containing name, address & Aadhaar Number
For Address Proof (For Low Risk customers alone)
6. Identity card with applicants photograph issued by Central/State Government

Departments, Statutory / Regulatory Authorities, Public Sector Undertakings,
Scheduled Commercial Banks, and Public Financial Institutions
7. Letter issued by a Gazetted Officer, with a duly attested photograph of the
person
8. Utility bill which is not more than two months old of any service provider
(electricity, telephone, postpaid mobile phone, piped gas & water bill)
9. Property or Municipal Tax Receipt
10. Bank account or Post Office savings bank account statement
11. Pension or family pension payment orders (PPOs) issued to retired employees
by Government Departments or Public Sector Undertakings, if they contain the
address.
12. Letter of allotment of accommodation from employer issued by State or
Central Government departments, Statutory or Regulatory bodies, Public
Sector Undertakings, Scheduled Commercial Banks, Financial Institutions and
Listed companies. Similarly Leave and License agreements with such
employers allotting official accommodation
13. Documents issued by Government departments of foreign jurisdictions and
letter issued by Foreign Embassy or Mission in India.
Single document for proof of identity and proof of address.

If the officially valid document submitted for opening a bank account has both,
identity and address of the person, there is no need for submitting any other
document for address proof.
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Document with a different name consequent to marriage

A document shall be deemed to be an "Officially Valid Document" even if
there is a change in the name subsequent to its issuance, provided it is
supported by a marriage certificate issued by the State Government or a
Gazette Notification, indicating such a change of name.
Specific type of customer such as Minor and House wife

With regard to specific type of customers such as minor and housewife, if
they are assessed as low risk customers, account can be opened on the basis of
any of the documents meant for Low risk customers, in the absence of the six
officially valid documents mentioned in 1.B
D. PAN Card in the name of customer

As per Rule 114(B) of Income Tax Act, 1961, PAN should be quoted for
opening of bank accounts.
The proviso to Rule 114B state that any person who does not have a PAN and
who enters into a transaction specified in this rule shall make a declaration in
Form 60.
If the customer is a minor and who does not have any income chargeable to
income tax, he shall quote the PAN of his father or mother as guardian.
Proprietor can quote his PAN in all the accounts including personal accounts
and proprietorship accounts.
For nature of Business and Financial status

E. Any document in respect of the nature of business and financial status of the client
may also be obtained. For example Salaried class, Professional, Businessman,
Industrialist, Investor, money lender, dealer in Real estate / Jewellery, etc.
Notes:
1. No separate proof of address is required for current address
A customer shall not be required to furnish separate proof of current address, if

it is different from the address recorded in the OVD. In such cases, the branch
shall merely obtain a declaration from the customer indicating the address to
which all correspondence will be made by the branch. For example migrant
workers, transferred employees etc
This address may be verified by the bank through positive confirmation such
as acknowledgement of receipt of (i) Letter, Cheque Books, ATM Cards; (ii)
telephonic conversation; (iii) visits etc.
In the event of change in this address due to relocation or any other reason,
customers may intimate the new address for correspondence to the bank within
two weeks of such a change.
2. Change of Permanent Address / Address as per proof of address
As long as permanent address does not change, the issue of separate

address proof would not arise. In the event of change in permanent
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address, the customer is allowed Six Months time to update the address in
any one of the officially valid documents and submit the same to banks.
3. No separate KYC documentation is required while transferring accounts
from one branch to another branch of the same bank.
Once KYC is done by one branch of the bank, it is valid for transfer of
the account to any other branch of the same bank. The customer would
be allowed to transfer his/her account from one branch to another
branch without restrictions and on the basis of declaration of his / her
local address for communication. In such cases customers may intimate
the new address for correspondence to the bank within two weeks of
such a change.
4. Time limit to submit KYC documents for Low risk customers
In case a customer categorized as low risk, is unable to submit the KYC

documents due to genuine reasons, he/she may submit the documents to
the bank within a period of six months from the date of opening
account.
5. Time limit to submit proof of local address for foreign students

Foreign students have been allowed a time of one month for furnishing
the proof of local address.
2. Self Help Groups

For identification of SHG
Copies of the minutes of the meeting of Self Help Group duly signed by the
chairperson of the meeting / President & Secretary with seal.
The list of members of the group with their name, Father/Husbands name,
age, address, telephone number etc with individual members signature against
the name.
Certified copy of Resolution taken in the meeting authorizing opening of such
accounts (mentioning the type of account and specifying the name & style of
the said account to be opened) and also specifying the Bank and branch name,
wherein the accounts to be opened and conferring authority on the persons,
who, in accordance with the resolution are to operate the accounts / sign
cheques etc.
Note:
(a) KYC verification of all the members of SHG shall not be required while opening
the savings bank account of the SHG
(b) KYC verification of all the office bearers shall suffice.
(c) No separate KYC verification of the members or office bearers shall be necessary
at the time of credit linking of SHGs.
3. Small Accounts
The persons who do not have any of the officially valid documents can open small
accounts on the basis of a
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Self-attested photograph and

The prospective account holder has to sign or affix thumb print in the presence
of the Bank Officer in the account opening form and
The bank officer certifies under his signature that the person opening the
account has signed in his presence.
The small accounts shall have the following limitations
The aggregate of all Credits in a financial Year cannot exceed Rs. 100,000/-
The aggregate of all withdrawal and transfers in a month cannot exceed Rs.
10,000/-
The balance at any point of time cannot exceed Rs. 50,000/-
Foreign remittances are not allowed in the account.
These small accounts would be valid normally for a period of twelve months.
Thereafter, such accounts would be allowed to continue for a further period of twelve
more months, if the account holder provides a document showing that he/she has
applied for any of the officially valid document, within twelve months of opening the
small account.
A small account can be converted into a regular account as soon as the normal
requirements for full KYC are complied
4. Proprietorship
For Proprietor
1. A passport size photograph and an officially valid document (out of the six
officially valid documents specified for individual customers) in respect of the
Proprietor who is also the sole beneficial owner AND
For Proprietorship concern:
2. ANY TWO of the following documents in the name of Proprietary concern
Registration certificate (in the case of a registered concern),
Certificate / License issued by the Municipal authorities under Shop and
Establishment act,
Sales and income tax returns, CST / VAT certificate, certificate / registration
document issued by Sales Tax/Service Tax/Professional Tax authorities,
License issued by the registering authority like Certificate of Practice issued by
the Institute of Chartered Accountants of India, Institute of Companies
Secretaries of India, Indian Medical Council, Food and Drug Control
Authorities,
Certificate / registration licensing document issued in the name of proprietary
concern by Central Government or State Government Authority/Department.
IEC (Importer Exporter Code) issued to the proprietary concern by the office of
the DGFT,
The complete Income Tax Return (not just the acknowledgement) in the name of
the sole proprietor where firms income is reflected, duly
authenticated/acknowledged by the Income Tax authorities
Utility Bills such as electricity, water, and landline telephone bills in the name of
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proprietary concern.
Any other License of Certificate of Practice issued in the name of proprietary
concern by any professional body incorporated under a statute.
Note: In cases where the designated authority is satisfied that it is not possible to
furnish two of the above documents, he/she would have the discretion to accept
only one of these documents as activity proof. In such cases the branch should
undertake contact point verification, collect such information as would be
required to establish the existence of such a firm, confirm, clarify and satisfy
themselves that the business activity has been verified from the address of the
proprietary concern.
3. PAN in the name of Proprietor (As per Section 114(B) of IT Act, 1961, PAN
should be quoted for opening of accounts)
For Address Proof

In normal case the above documents may contain address of the proprietorship firm
also. For local address, the firm may be asked to submit a declaration giving local
address details.
For person/s who operate the account.
A passport size photograph and an officially valid document (out of the six
person holding an attorney to transact on its behalf.
5. Partnership
For identification of partnership concern
All of the following documents
I. Copy of Registration certificate duly verified with the original
II. Copy of Partnership deed duly verified with the original
III. PAN Card in the name of Partnership duly verified with the original (As per
Rule 114(B) of Income Tax Act, 1961, PAN should be quoted for opening of
accounts)
IV. List of all the partners including Minor if any admitted to the benefits of
Partnership.
V. Partnership letter signed by all the partners in their individual capacity (D5).
VI. Details of Beneficial owners duly certified by the managing partner / partner as
per Annexure-6
VII. Power of attorney granted to the person authorized to transact on its behalf.
Note: Un-registered partnerships can also open account based on Partnership deed
supported by any document as may be required to collectively establish the legal
existence of partnership, such as License from Panchayat/Municipality/Corporation,
Permission or consent from any government department, Sales and income tax
returns, CST/VAT certificate / registration document issued by Sales Tax / Service
Tax / Professional Tax authorities / the complete Income Tax Returns duly
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authenticated/acknowledged by the Income Tax authorities / Copy of latest balance

sheets / import export code (IEC) etc in lieu of registration certificate
For Address Proof
In normal case the above documents may contain address of the entity also. For local
address, the entity may be asked to submit a declaration giving local address details.
For all person/s who operate the account.
person holding an attorney to transact on its behalf.
For all Partners and all Beneficial owners

officially valid documents specified for individual customers) in respect of all
the partners and beneficial owners.
Note:
Beneficial owner is the natural person(s), has ownership of / entitlement to
more than 15% of capital or profits of the partnership
Where no natural person is identified as above, the beneficial owner is the
natural person who holds the position of senior managing official.
6. Companies
For identification of company
i. Copy of Certificate of incorporation (compulsory)
ii. Copy of Memorandum of Association duly verified with the original and
certified as true and upto-date
iii. Copy of Articles of Association duly verified with the original and certified as
true and upto-date
iv. A copy of the Certificate of commencement of business (in case of Public
Limited Company) duly verified with the original.
v. PAN Card in the name of company duly verified with the original (As per Rule
114(B) of Income Tax Act, 1961, PAN should be quoted for opening of
accounts)
vi. A copy of Board resolution, on the lines indicated in the opening form, duly
certified to be true by the chairman of the meeting at which the resolution had
been passed authorising the opening an account with the Bank.
vii. A resolution from the Board of Directors and power of attorney granted to its
managers, officers or employees to transact on its behalf;
viii. List of Board of Directors of the Company
ix. Details of Beneficial owners duly certified by the CEO / CFO / Director /
Company Secretary as per Annexure-6
For Address Proof

In normal case the above documents may contain address of the company also. For
local address, the entity may be asked to submit a declaration giving local address
details.
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For person/s who operate the account.

x. A passport size photograph and an officially valid document (out of the six
officially valid documents specified for individual customers) in respect of
managers, officers or employees holding an attorney to transact on its behalf.
For Directors and Beneficial owners
xi. A passport size photograph and an officially valid document (out of the six
officially valid documents specified for individual customers).
Note:
Beneficial owner is the natural person(s), who has a controlling ownership
interest or who exercises control through other means.
Controlling ownership interest means ownership of or entitlement to more
than 25% of shares or capital or profits of the company.
Control shall include the right to appoint majority of the directors or to
control the management or policy decisions including by virtue of their
shareholding or management rights or shareholders agreements or voting
agreements.
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.
7. Trusts and foundations

For identification of Trust / foundation etc
i. Copy of Registration certificate duly verified with the original. (In the case of a
Public Trust, a copy of the certificate issued by Charity Commissioner or such
other competent authority to be obtained. Private trusts may not have
registration)
ii. Copy of Trust deed duly verified with the original.
iii. Copy of any supplementary deed of appointment of new trustees verified with
the original.
iv. PAN Card in the name of Trust / foundations duly verified with the original
(As per Rule 114(B) of Income Tax Act, 1961, PAN should be quoted for
opening of accounts)
v. A resolution from the Board of trustees to open an account with the Bank duly
certified by the chairman of the meeting
vi. Power of attorney granted to the authorised person to transact on its behalf;
vii. List of all the trustees.
viii. Letter from Trustees
ix. Details of Beneficial owners duly certified by the Managing trustee.
Note: Unregistered trusts/foundations can also open account based on trust deed
supported by any document as may be required to collectively establish the legal
existence of the entity, such as License from Panchayat or Municipality or
Corporation, Permissions or consent from any government department, Sales and
15
income tax returns, CST/VAT certificate / registration document issued by Sales Tax /
Service Tax / Professional Tax authorities / Income Tax Returns / Copy of latest
balance sheets / import export code (IEC) etc in lieu of registration certificate.
For Address Proof
address, the entities may be asked to submit a declaration giving local address details
For person/s who operate the account
x. A passport size photograph and an officially valid document (out of the six
person holding a power of attorney to transact on its behalf.
For all trustees and all Beneficial owners

xi. A passport size photograph and an officially valid document (out of the six
the trustees / members of managing committee and beneficial owners
Note:
Where the client is a trust, identification of beneficial owner shall include
identification of author (founder) of the trust, the trustee, the beneficiaries with more
than 15% interest in the trust and any other natural person exercising ultimate
effective control over the trust through a chain of control or ownership.
8. Un-incorporated association or body of individuals
For identification of Association / body etc
i. Copy of the Registration Certificate if registered along with any one of the
License from Panchayat or Municipality or Corporation / Permission or
consent from any government department / Sales and income tax returns / CST
/ VAT certificate / registration document issued by Sales Tax / Service Tax /
Professional Tax authorities / Bye-laws / Income Tax Returns / Copy of latest
balance sheets / import export code (IEC) etc as may be required to collectively
establish the legal existence of such an association or body of individuals; duly
verified with the original.
ii. PAN Card in the name of Un-incorporated association or body of individuals
duly verified with the original (As per Rule 114(B) of Income Tax Act, 1961,
PAN should be quoted for opening of accounts)
iii. Resolution of the managing body of such association or body of individuals to
open an account with the Bank;
iv. Power of attorney granted to the person authorized to transact on its behalf;
v. List of members of Managing committee.
vi. Details of Beneficial owners duly certified by the chairman of the Managing
committee as per Annexure-6
Note:
Unregistered trusts/partnership firms shall be included under the term
unincorporated association.
16
Term body of individuals includes societies.

For Address Proof
address, the entities may be asked to submit a declaration giving local address details.
vii. A passport size photograph and an officially valid document (out of the six
person holding a power of attorney to transact on its behalf;
For all the members of managing committee and all Beneficial owners
viii. A passport size photograph and an officially valid document (out of the six
members of the managing committee and beneficial owners.
Note:
Where the client is an unincorporated association or body of individual, the
beneficial owner is the natural person(s), who, has ownership of or entitlement
to more than 15% of the property or capital or profits of such association or
body of individuals.
9. Schools, Colleges etc
For identification of the institution
A copy of the rules and regulations of the institution duly verified with the
original.
A copy of the resolution of the Governing Body authorizing opening and
operation of the account, duly certified by the chairman of the meeting in which
it is passed.
Power of attorney granted to the person authorized to transact on its behalf.
List of persons comprising the Governing Body. The updated / revised list
should be obtained every year.
Details of Beneficial owners duly certified by the chairman of the Managing
committee / Governing body as per Annexure-6
In case of Government Schools, the branch should ensure whether the school /
college is authorized to open an account by the education department and the
usual terms and conditions on which such accounts are allowed to be opened
should be verified. The account opening form should be signed by the persons
authorized to open and operate the account as per the Government Order. The
operations should be allowed as per the terms and conditions / rules framed by
education department for this purpose.
In case of Aided Schools, the permission of Board of Secondary Education is
necessary. Before accepting an account in the name of an aided school, the
Branch Manager should make sure that the Governing Body of the school has the
permission.
For Address Proof
17
address, the entity may be asked to submit a declaration giving local address details.
person holding a power of attorney to transact on its behalf.
For all the Members of Governing Body and all Beneficial owners
members of the Governing Body / managing committee and beneficial owners
Note:
Branch may ascertain the ownership pattern of the school, college etc to find
out whether it comes under Proprietorship, Partnership, Company, Trust,
Society etc and thereafter the rules applicable to such customer type may be
applied for identifying beneficial owners.
10. Foreign Students studying in India
Non-Resident Ordinary Account (NRO) account alone can be opened

Students with Pakistani nationality will require prior approval from Reserve
Bank of India for opening the account.
For identification of the student
Photo of the proposed customer
Copy of Passport with appropriate Visa & immigration endorsement which
contains the proof of identity and address in the home country
Letter offering admission from the educational institution
The account may be opened and allowed to operated for 30 days with a
condition of allowing foreign remittances not exceeding USD 1,000 or
equivalent into the account and a cap of Rs. 50,000/- on aggregate in the same,
during the 30-day period.
Within a period of 30 days, the foreign student should submit 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.
On submission of the proof of current address, the account would be treated as
a normal NRO account, and can be operated in terms of instructions on Non-
Resident Ordinary Rupee (NRO account and the provisions of FEMA, 1999.
For opening accounts of juridical persons not specifically covered in the above, such
as Government or its Departments, societies, universities and local bodies like village
panchayats, a certified copy of the following documents are to be obtained:
i) Document showing name of the person authorised to act on behalf of the
entity;
ii) Officially valid documents for proof of identity and address in respect of the
person holding a power of attorney to transact on its behalf and
iii) Such documents as may be required to establish the legal existence of such an
entity/juridical person
18
IMPORTANT NOTES:
1. Verification of copies of documents with original and Authentication:
Original of the documents may be obtained for verification and copy duly
attested by the official concerned after due verification regarding validity etc.
should be kept along with the account opening form.
2. Need for due diligence:
Due diligence means any measure undertaken by the Bank to collect and
verify the information and positively establish the identity of the customer. It
means in addition to obtaining the documents, all efforts must be taken to
verify the information and ensure the genuineness of documents, purpose and
nature of business relationship, in order to ensure that the account is opened
and operated by the person authorised to do so
3. For identification of any other customer type or operational guidelines
Branches are advised to refer Deposit Manual for detailed guidelines on KYC
norms of any other type of customer and for other operational guidelines.
AML guidelines with regard to Lockers.
A. Branches should carry out customer due diligence for both new and existing customers
under the above category as per standards prescribed for Medium Risk customers. If the
customer is classified in a high risk category, customer due diligence as per KYC norms
applicable to such higher risk category should be carried out.
Measures for lockers which have remained not operated
a) Where the lockers have remained not operated for more than three years for medium risk
category or one year for a higher risk category, branches should immediately contact the
locker-hirer and advise him to either operate the locker or surrender it. This exercise should
be carried out, even if the locker hirer is paying the rent regularly.
b) Branches should also ask the locker hirer to give in writing the reasons why he/she did not
operate the locker. In case the locker hirer has some genuine reasons as in the case of NRIs
or persons who are out of town due to a transferable job etc., branches may allow the locker
hirer to continue with the locker.
c) In case the locker hirer does not respond nor operate the locker, branches should consider
break opening the locker, after giving due notice to him/her.
19
2.4 Enhanced due diligence for specific customers/ transactions

1. Accounts of Politically Exposed Persons (PEPs).
(a) Branches should gather sufficient information on the PEP including information about the
sources of funds accounts of family members and close relatives;
(b) Branches should verify the identity of the person before accepting the PEP as a customer;
(c) The decision to open an account for Politically Exposed Persons (PEP) and / or the family
members / close relatives of PEPs should be taken by the Zonal Manager. Politically
exposed persons are individuals who are or have been entrusted with prominent public
functions in a foreign country, e.g., Heads of States or of Governments, senior politicians,
senior government / judicial / military officers, senior executives of state-owned
corporations, important political party officials etc. In case an existing customer or
beneficial owner of an existing account subsequently becomes a PEP, Branch should obtain
the approval of the respective Zonal Manager to continue the business relationship and
subject the account to Enhanced Customer Due Diligence (EDD) measures.
(d) all such accounts are subjected to enhanced monitoring on an on-going basis;
(e) in the event of an existing customer or the beneficial owner of an existing account
subsequently becoming a PEP, Zonal Managers approval should be obtained to continue
the business relationship;
(f) the CDD measures as applicable to PEPs including enhanced monitoring on an on-going
basis are to be adhered to.
These instructions are also applicable to accounts where a PEP is the beneficial owner
2. Accounts of non face-to-face customers. (Customers who open accounts without visiting
the branch / offices of the Bank or meeting the officials of Banks.)
With the introduction of telephone and electronic Banking, increasingly accounts are being
opened by Banks for customers without the need for the customer to visit the branches. In
the case of non-face-to-face customers, apart from applying the usual customer
identification procedures, branches shall apply specific and adequate procedures to mitigate
the higher risk involved. Certification of all the documents presented should be insisted
upon and, if necessary, additional documents may be called for. In such cases, Branches
may also require the first payment to be effected through the customer's account with
another Bank which, in turn, adheres to similar KYC standards. In the case of cross-border
customers, there is the additional difficulty of matching the customer with the
documentation and the Branches may have to rely on third party certification/introduction.
In such cases, it must be ensured that the third party is a regulated and supervised entity and
has adequate KYC systems in place
3. Accounts of Clients opened by professional intermediaries.
a. When the Branch has knowledge or reason to believe that the client account opened by a
professional intermediary is on behalf of a single client, that client must be identified.
20
b. Branches may hold 'pooled' accounts managed by i) professional intermediaries on behalf of

entities like mutual funds, pension funds or other types of funds and ii) lawyers / chartered
accountants or stockbrokers for funds held 'on deposit' or 'in escrow' for a range of clients.
c. Where funds held by the intermediaries are not co-mingled at the branches 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 branches, the Branches should still look
through to the beneficial owners.
d. 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 noted that the ultimate
responsibility for knowing the customer lies with the Branches.
e. Branches should not allow opening and / or holding of an account on behalf of 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
the customer confidentiality
.
2.5.Simplified KYC norms for Foreign Portfolio Investors (FPIs)
Accounts of FPIs which are eligible/ registered as per SEBI guidelines, for the purpose of
investment under Portfolio Investment Scheme (PIS), can be opened by accepting KYC documents
as detailed in Annexure-II, subject to Income Tax (FATCA/CRS) Rules.
Branches should obtain an undertaking from FPIs or the Global Custodian acting on behalf of the
FPI, that the exempted documents as detailed in Annexure-II will be submitted, as and when
required.
2.6 Periodical Updation Of KYC Details
2.6.1 'KYC updation'' can be defined as a process of customer identification and consequent re-
affirmation of his identity using reliable, independent source documents, data or information
available, in addition to the collection of a photograph.
2.6.2 As per RBI Guidelines Banks need to continue to carry out on-going due diligence with
respect to the business relationship with every client and closely examine the transactions in order
to ensure that they are consistent with their knowledge of the client his business and risk profile and
wherever necessary, the source of funds.
Low risk Full KYC exercise will be required to be done at least every ten years for low
customers risk individuals and entities.
While doing KYC exercise of low risk customers:
Banks need not seek fresh proofs of identity and address, in case there
is no change in status with respect to their identities and addresses.
But a self-certification by the customer to that effect is to be obtained.
In case there is a change in address, customers are to merely forward a
certified copy of document by mail/post etc.
Branches need not insist on physical presence of such low risk
customer at the time of periodical updation.
21
Medium Full KYC exercise will be required to be done at least every eight years for
risk medium risk individuals and entities
customers Full KYC exercise means obtaining latest KYC documents / Copies of
other documents such as Aadhaar Card / PAN Card / Form 60/61 /
Copy of any document in respect of the nature of business and
financial status of the client / and details such as e-mail id / Land line
Telephone number / Mobile number etc and updating the same in the
system
High risk Full KYC exercise will be required to be done at least every two years for high
customers risk individuals and entities.
2.6.3. On a minor attaining majority, the right of the guarding to operate upon the account
automatically comes to an end. Such minor customers who have attained majority have to submit
fresh photograph, specimen signature duly attested by the guardian who was hitherto operating the
account on behalf of minor and continue operations in the account independently.
2.6.4. During the periodic review, if the low risk category customer for whom simplified
procedure is applied, is re-categorised as medium or high risk category, then branches should
obtained one of the six OVDs for proof if identity and proof of address.
2.6.5 The following Customer /Account Types are exempted from periodical updation of KYC
documents.
Accounts where information is available in Public Domain: Central, State & Public Sector
Undertakings / Corporations and Accounts of some publicly known entities like listed
companies.
Non-transactional liability products like term deposits
Restricted value accounts like the Small Accounts/No Frill Accounts in view of in-built
safeguards provided in the system
In Pensioner Accounts the date of latest Life Certificate can be considered for KYC Updation
Non-transactional Asset products like home loans, personal loans, etc. having a pre-determined
cash flow (EMI) which carry low AML risk and where a higher level of due diligence has been
conducted at the time of credit exposure
Standard Asset products like Cash Credit, Overdrafts, and Credit Cards, which are subject to
periodic review/renewal where KYC updation may be treated as a part of the review/renewal
exercise
The date of opening of New accounts with the existing CIF of the Customer can be considered
as KYC Updating. While opening such new accounts under an existing CIF, Branches are
advised to re-visit the existing KYC Compliance.
3. Remittances/ Wire Transfers / Sale of third party products

3.1. Remittances such as Issue of Demand Drafts/ NEFT/RTGS/Travellers Cheques/IMPS etc:
Branches to ensure that any remittance of funds such as Demand Drafts/ NEFT/ RTGS/IMPS etc
and issue of Travellers Cheques for value of Rs. 50,000/- and above is effected only to the
debit of customers accounts or
22
against cheques and not against cash and after

obtention and verification of the PAN given by the account based customers.
Note: The person making the payment in cash for purchase of bank draft is to furnish his
Permanent Account Number (PAN). If on behalf of any company, firm or Association of persons,
any individual is making deposit representing such person, then such person will have to indicate
the PAN of the person on whose behalf the draft has been purchased viz. the person who is the
owner of the funds making the deposit to the Bank for purchasing the drafts.
Any transaction under the category for an amount below Rs. 50,000/-, against cash, is to be
complying with norms applicable for Walk-in Customers.
3.2. Selling of Third Party products

While selling third party products, the following should be complied:
a) The identity and address of the walk-in customer shall be verified for transactions above rupees
fifty thousand.
b) Transactions involving rupees fifty thousand and above shall be undertaken
by debit to customers account or against cheques and not against cash and
after obtention and verification of the PAN given by the account based as well as walk-in
customers.
A walk-in customer, (non-account based customer) where the amount of transaction is equal to or
exceeds Rs. 50,000/- (Rupees fifty thousand only), whether conducted as a single transaction or
several transactions that appear to be connected must be
customers.
However, if a branch has reason to believe that a customer is intentionally structuring a
transaction into a series of transactions below the threshold of Rs. 50000/-, the bank should
verify the identity and address of customer and also consider filing a suspecious transaction
report (STR) to FIU-IND.
3.3.Sale of Gold/Silver/Platinum / Sale of Banks own products / Payment of dues of credit

cards / Sale and reloading of prepaid/travel cards and any other product for Rs. 50,000/- and
above
When banks sell Gold/Silver/Platinum / own products / Accepts payment of dues of credit cards /
Sale and reloading of prepaid/ travel cards and any other product for Rs. 50,000/- and above must
be
a) by debit to customers account or against cheques and after
b) obtention and verification of the PAN given by the account based customer, as well as walk-in
customers.
Any transaction under the category for an amount below Rs. 50,000/-, against cash, is to be
complying with norms applicable for Walk-in Customers.
23
3.4. International Money Transfer Operations:

In terms of Clause (b) (ii) of Sub Rule (1) of Rule 9 of the PML Rules, 2005, Banks and finincial
Institutions are required to verify the identity of the customers for all international Money transfer
operations.
3.5. Transactions relating to Foreign Exchange
(Refer CO International Division Circular FX-30/2009-10 dated 23.12.2009 and FX-33/2011-12
dated 28.12.2011)
3.5.1.The guidelines on KYC compliance on foreign exchange related transactions such as Money
changing Activities / Xpress Money / Money gram & DD drawing Arrangement are:
No transaction should be conducted for anonymous or fictitious / benami name/s.
Documents and other information should be collected in accordance with extant KYC
guidelines
For purchase of foreign currency notes and / or TCs from customers for any amount less
than USD 200 or equivalent, the details of ID should be maintained
For purchase of foreign currency notes and / or TCs from customers for any amount of USD
200 and above or equivalent, the details of ID should be verified and copy retained.
Requests for payment in cash in Indian rupees to resident customers towards purchase of
foreign currency notes / TCs from them may be acceded to the extent of only USD 1000 or
its equivalent per transaction.
Requests for payment in cash by foreign visitors / NRIs may be acceded to the extent of
only USD 3000 or its equivalent per transaction
In all other cases branches should make payment by way of Account Credit / Account Payee
cheque / Demand Draft only.
In case of sale of foreign exchange, irrespective of the amount involved, the passport of the
customer should be insisted upon for identification, and FX should be sold only on personal
application and after verification of ID. A Copy of ID has to be retained by branch.
Payment for Rs. 50,000/- and above towards sale of FX should be received by way of
crossed cheque / through debit cards / credit cards etc.
All cross border wire transfers must be accompanied by accurate and meaningful originator
information such as Name and address of the originator and where an account exists, the
number of that account etc.
The ordering Bank i.e. the bank which originates a wire transfer, as per the order placed by
its customer, must ensure that qualifying wire transfer contain complete originator
information.
The intermediary Bank i.e. the Bank processing an intermediary element of a chain of wire
transfer must ensure that all originator information accompanying the wire transfer is
retained with the transfer.
The beneficiary Bank should have effective risk-based procedure in place to identify wire
transfers lacking complete originator information.
24
The concurrent auditor has to check all cross broder inward remittance transactions under Xpress
Money and Money Gram to verify that they have been undertaken in compliance with the anti-
money laundering guidelines and have been reported whenever required to the concerned
authorities
3.5.2.Complete originator information relating to qualifying wire transfers should be preserved at
least for a period of five years by the ordering bank.
3.5.3.Beneficiary bank should report transaction lacking complete originator information to FIU-
IND as a suspicious transaction.
3.6. Rupee Drawing Arrangement including both Draft and Electronic Funds transfer:
By Nodal branch: Treasury Branch , which is the Nodal branch for Rupee Drawing Arrangement,
has to ensure that
a. Proper remitter details and purpose of remittance in case of high value transaction / DDs
are ascertained and recorded
b. The details of sudden spurt in remittance in favour of a single beneficiary and the reason
for the same are also recorded.
By Paying branches:
a. KYC norms of beneficiary have to be stringently followed.

b. Purpose of each remittance has to be ascertained from the beneficiary, in case the same is
not printed on the DD, and branch has to record the same on the back of each draft in case
of DDs.
3.7. Franchisee arrangement:

Branches, which have entered into Franchisee Arrangement with Restricted Money Changers have
to keep in constant touch with the Franchisees. All the guidelines contained in the A.P. (Dir
Circular) no.17 dated 26.11.2009 are applicable to Franchisees. Franchiser branch has to ensure
that Franchisees are displaying the names of the Bank and branch in their offices, and that they are
authorized only to purchase foreign currency.
3.8.Correspondent Banks
3.8.1.Correspondent Banking is the provision of Banking services by one Bank (the correspondent
Bank) to another Bank (the respondent bank). These services may include cash / funds
management, international wire transfers, drawing arrangements for demand drafts and mail
transfers, payable-through-accounts, cheques clearing etc.
3.8.2.Sufficient information should be gathered to understand fully the nature of the business of the
correspondent / respondent Bank. Information on the other Banks management, major business
activities, level of AML/CFT compliance, purpose of opening the account, identity of any third
party entities that will use the correspondent Banking services, and regulatory / supervisory
framework in the correspondent's/respondents country may be of special relevance. Similarly, It
should be ascertained, from the publicly available information, whether the other Bank has been
subject to any money laundering or terrorist financing investigation or regulatory action. The
responsibilities of each Bank with whom correspondent Banking relationship is established should
be clearly documented. In the case of payable-through-accounts, the correspondent Bank should be
25
satisfied that the respondent bank has verified the identity of the customers having direct access to
the accounts and is undertaking ongoing 'due diligence' on them. The correspondent bank should
also ensure that the respondent Bank is able to provide the relevant customer identification data
immediately on request.
3.8.3.Correspondent relationship should not be entered into with a Shell bank. It should also be
ensured that the correspondent banks do not permit their accounts to be used by shell banks.
3.8.4.Correspondent Banking relationship with Co-operative Banks:
3.8.4.1.Some branches have the arrangements with co-operative Banks wherein the latter open
current accounts with commercial banks and use the cheque book facility to issue at par cheques
to their constituents and walk-in customers for facilitating their remittance and payments. Since the
at par facility offered by commercial banks to co-operative banks is in the nature of correspondent
banking arrangements, branches should monitor and review such arrangements to assess the risks
including credit risk and reputational risk arising therefrom. For this purpose, branches should
retain the right to verify the records maintained by the client co-operative banks / societies for
compliance with the extant instructions on KYC and AML under such arrangements.
3.8.4.2.Co-operative banks should ensure that the at par cheque facility is utilised only
a) for their own use
b) for their account-holders who are KYC compliant, provided that all transactions of Rupees Fifty
thousand or more are strictly by debit to the customers accounts.
c) for walk-in customers against cash for less than rupees fifty thosand per individual.
3.8.4.3.Co-operative banks should maintain the following:
a) records pertaining to issuance of at par cheques covering, inter alia, applicants name and
account number, beneficiary details and date of issuance of the at par cheque.
b) sufficient balances/drawing arrangements with the commercial bank extending such facility for
purpose of honouring such instruments.
Co-operative banks should ensure that at par cheques issued are crossed account payee
irrespective of the amount involved.
4. a. Walk-in Customers
A walk-in customer, where the amount of transaction is equal to or exceeds Rs. 50,000/- (Rupees
fifty thousand only), whether conducted as a single transaction or several transactions that appear to
be connected must be
customers.
However, if a branch has reason to believe that a customer is intentionally structuring a
transaction into a series of transactions below the threshold of Rs. 50000/-, the bank should
verify the identity and address of customer and also consider filing a suspecious transaction
report (STR) to FIU-IND.
4. b. Multiple transactions by the same customer in a day
26
The following transactions require KYC compliance as per RBI directions, since the aggregate of
several transactions done by the same customer may exceed Rs.50,000/-, the threshold fixed by RBI
for cash transactions.
a) A walk-in customer purchases different DDs favouring same/different beneficiaries where

the individual amount is below Rs. 50,000/- but aggregate exceeds Rs.50,000/- in a day
b) A walk-in customer sends different NEFT remittances favouring same/different

beneficiaries where the individual amount is below Rs. 50,000/- but aggregate exceeds
Rs.50,000/- in a day
c) A walk-in customer purchases Banks own products, Gold / Silver / Platinum or third party
products / insurance products etc where the individual amount is below Rs.50000/- but
aggregate exceeds Rs. 50,000/- in a day
d) A walk-in customer / third party (other than account holder) remits cash into an account
through a number of transactions where the individual amount is less than Rs. 50,000/- but
aggregate exceeds Rs.50,000/- in a day.
4.c. KYC Requirement for transactions by Walk-in-Customers:
Nature of Transaction KYC compliance requirement.
A. Remittances such as DD / NEFT / RTGS / BPO etc
1 Remittances such as Application must be filled up with proper details such

Demand draft / NEFT / as name, address, telephone number etc of the
BPO etc upto and applicant.
inclusive of Rs. 20,000/-
However no KYC documents need be insisted in
support of the details except where there is a suspicion
of potential fraud.
2 Remittances such as Application must be filled up with proper details such
Demand draft / NEFT / as name, address, telephone number etc of the
BPO etc above Rs. applicant.
20,000/- Copy of any one of the Officially Valid Documents
furnished in Table-1 OR if the customer is unable to
produce any OVD, then copy of any one of the
documents furnished in Table-2, to be obtained for the
proof of identity of the walk-in customer.
B. Cash deposits into accounts by third Parties

1 Cash deposits upto and Deposit challan must be filled up with proper details
inclusive of Rs. 20,000/- such as name, address, telephone number etc of the
into accounts by third person depositing cash.
parties i.e. persons other
than Account holder or However no KYC documents need be insisted in
employee/Partner/Director support of the details except where there is a suspicion
/ Trustee etc in case of of potential fraud.
entities.
27
2 Cash deposits above Rs. Deposit challan must be filled up with proper details
20,000/- into accounts by such as name, address, telephone number etc of the
third parties i.e. persons person depositing cash.
other than Account holder
or employee/ Partner/ Copy of any one of the Officially Valid Documents
Director/ Trustee etc in furnished in Table-1 OR if the customer is unable to
case of entities. produce any OVD, then copy of any one of the
documents furnished in Table-2, to be obtained for the
proof of identity of the walk-in customer.
C. Payment of Cash against Un-crossed instruments across the counter
1 Payment of an un-crossed Name, Address, telephone number, signature etc of the

instrument payable to person receiving cash is to be obtained on the reverse
bearer where amount is of the instrument.
below Rs.50,000/- However no KYC documents need be insisted in
support of the details except where there is a suspicion
of potential fraud.

bearer where the amount of the instrument.
is Rs.50,000/- and above
Copy of any one of the documents specified in Table-1:
Officially Valid documents OR Table-2: Documents
other than OVD under relaxed norms, to be obtained
for the proof of identity of the walk-in customer.
Order irrespective of the of the instrument.
amount
Copy of any one of the Officially Valid Documents as
per Table-1 OR if the customer is unable to produce
any OVD, then any one of the documents furnished in
Table-2, to be obtained for the proof of identity of the
walk-in customer.
D. Sale of Gold Coin / third party products / Credit Cards / Travel Cards etc
1 Sale of Banks own Application must be filled up with proper details such
products, Gold / Silver / as name, address, telephone number etc of the
Platinum or third party applicant.
products / insurance
products against cash and Copy of any one of the Officially Valid Documents as
remittance of dues of per Table-1 OR if the customer is unable to produce
Credit cards / prepaid any OVD, then any one of the documents furnished in
travel cards etc by cash Table-2, to be obtained for the proof of identity of the
irrespective of the amount. walk-in customer.
28
E. Walk-in customers of all other categories.

1 Any person or entity connected with a Branch Manager / the relevant
financial or Non-financial transaction which authority has to ensure that proper
can pose significant reputational or other risk details such as name, address,
to the bank irrespective of the amount telephone number etc of the
involved. individual or entity concerned are
For example: Guarantor, Surety, Indemnifier, obtained and recorded.
Awardees of Contracts / Work Orders, Copy of any one of the Officially
Claimants of Deposits / Assets / Actionable Valid Documents as per Table-1 OR
Claims / Estates / Contents of Locker / if the customer is unable to produce
Pledged items / Valuables etc. any OVD, then any one of the
Note: For nominees, KYC need to be documents furnished in Table-2, to
insisted only when claim is made. be obtained for the proof of identity
of the walk-in customer.
4.d. Simplified procedure to be adopted for regular walk-in customers
As per PML Act / Rules, the details of Customer and the transactions are to be preserved for a
minimum period of 5 years from the date of transaction / date of end of relationship whichever is
later. Hence the following simple procedure is put in place to facilitate a hassle-free compliance by
regular walk-in customers.
1. Branch to obtain a simple Walk-in Customer profile in the format (Annexure--III) enclosed
duly filled up and signed along with Two Copies of any one of the Officially Valid
documents for the purpose of Photo ID.
2. Verify the copy with original and authenticate the same for having verified by affixing
Signature and Seal.
3. Create a Customer Information File (CIF) in CBS under "Non-Customer' status by selecting
888: Non-Customer from drop down given for Status
4. Return one copy of the Photo ID with the CIF Number noted on the face of the ID, to the
customer, with branch Seal affixed on the same.
5. Quote the CIF number (without any space, prefix, suffix etc) for all the transactions made
by him in the mandatory field for Applicant's name / payee's name etc
6. Customer can use this CIF number by producing the copy of this Photo ID for all his/her
future transactions, in any branch, without giving KYC documents every time.
However, branches may not insist for creation of Customer Master (CIF), for one-off / occasional /
in-frequent transaction by the customer.
4.e.Conversion of Non-customer CIF into Customer CIF for opening accounts:
It is mandatory to obtain normal CIF opening form duly filled up and signed, along with Officially
Valid Documents for Photo ID and Address ID, as per norms applicable to account opening and
update the same in CIF before converting the '888: Non-customer' CIF into '000: Active' Customer
CIF
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5. Fixation Of Threshold Limits
Fixing Threshold Limit based on transaction profile of customer is one of the essential features of
Transaction Monitoring and facilates monitoring of transactions breaching the limit at the Branch
level. The indicative threshold limits for different types of customers are given below
5.1. For Low Risk Accounts: An indicative threshold limit that may be fixed in the account by
branches is given below:
(i) Rs. 1 Lakh or 25% of the annual income, whichever is higher for Low Risk Individual customers
having
No frill accounts
Small Accounts
Smart Kid Accounts
Accounts opened under NREGP Scheme etc.
(ii) Rs. 2 Lakhs or 25% of the annual income, whichever is higher for Low Risk Individual
customers such as
Workers/Labours/Agricultural Labours
Employees with monthly Salary up to Rs.15000/- per month.
(iii) Rs. 5 Lakhs or 25% of the annual income, whichever is higher for Low Risk Individual
customers such as
Students
SHG Accounts
Professionals/Employees with income up to Rs. 50000/- per month
(iv) Rs. 10 Lakhs or 25% of the annual income, whichever is higher for all other types of accounts
(v) In the case of business enterprises Rs. 10 lakhs or one month turnover, whichever is higher.
5.2 For High Risk accounts: Branches should fix the threshold limit taking note of the background
of the customer, such as the country of origin, sources of funds, the type of transactions involved
and other risk factors. However, such threshold limit shall not exceed the limits cited above.
The threshold limits may be reviewed and revised based on experience gained and requirements of
Top Management, Government, RBI and other Statutory Authorities.
Any transaction beyond the threshold limit fixed for the account should be looked into with extra
caution.
The limits specified above are only indicative and branches may fix the threshold limits realistically
taking into account the Income, Turnover etc of the customer.
6. MONITORING OF TRANSACTIONS
i) Branches should exercise ongoing due diligence with respect to the business relationship with
every client and closely examine the transactions in order to ensure that they are consistent with
their knowledge of the client, his business and risk profile and where ever necessary, the source of
30
funds. Monitoring customer activity and transactions that take place throughout a relationship helps
the banks to know their customers, assess risk and provides greater assurance that the Bank is not
being used for the purposes of financial crime. Thus monitoring means analysis of a customers
transactions to detect whether the transactions appear to be suspicious from an AML or CFT
perspective.
ii) Transaction involving financing of the activities relating to terrorism includes transaction
involving funds suspected to be linked or related to, or to be used for terrorism, terrorist act or by a
terrorist, terrorist organisation or those who finance or are attempting to financing of terrorism.
iii) 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, Banks shall review the due diligence measures including verifying again the
identity of the client and obtaining information on the purpose and intended nature of the business
relationship, as the case may be.
iv) For Transaction Monitoring to be effective, Branches should pay special attention to the
following aspects:
a. Branches should have an understanding of the normal and reasonable activity of the customer
so that they have the means of identifying transactions that fall outside the regular pattern of
activity and normal threshold limits assigned for Transaction Levels
b. Transactions which are unusually large & complex which have no apparent economic or
visible lawful purpose
c. Transactions that involve large amounts of cash inconsistent with the normal and expected
activity of the customer
d. Very high account turnover inconsistent with the size of the balance maintained may indicate
that funds are being 'washed' through the account.
e. Unusually large number of Transactions in an account indicating significant deviation from
known transaction profile of customer
f. Transaction with jurisdictions included in Financial Action Task Force (FATF) Notifications
v) High-risk accounts have to be subjected to intensified monitoring based on certain key

indicators such as the country of origin, sources of funds, the type of transactions involved and
other risk factors for such accounts
vi) Branches, while monitoring the transaction, shall determine whether a client is acting on
behalf of a beneficial owner, identify the beneficial owner and take all reasonable steps to verify his
identity. Branches should not open an account (or should consider closing an existing account),
when it is unable to apply appropriate Customer Due Diligence measures. In the given
circumstances when a branch believes that it would no longer be satisfied that it knows the true
indentity of the account holder, the branch should also file an STR with the respective Corporate
Office AML Cell through the Zonal Office
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7. RISK MANAGEMENT
Branches should prepare a profile for each new customer based on risk categorisation. The
customer profile should contain information relating to customers identity, social/financial status,
nature of business activity, information about the clients business and their location etc. While
considering the customers identity, the ability to confirm identity documents through online
or other services offered by issuing authorities should be factored in. The nature and extent of
due diligence will depend on the risk perceived by the bank.
7.1 Customer Risk categorisation & Periodic Review.

Customer Risk Categorisation (CRC)The perception 'Customer risk' in the present context
refers to the money laundering and terrorist funding risk associated with a particular customer from
a bank's perspective. This risk is based on the risk perceptions associated with the parameters
comprising a customer's profile, and the level of risk associated with the product and channels
being used by him.
Customer Risk Profiling is to be done and customers are to be categorized into low, medium and
high risk based on defined parameters of risk perception as briefly outlined below:
Customer constitution: Individual, proprietorship, partnership, private limited etc

Business segment: Retail, Corporate, etc
Country of Residence/Nationality: Whether India or any overseas location / Indian
or foreign national
Product Subscription: Salary account, NRI Products, etc
Economic profile: High Net worth Individual (HNI), Public Limited Company etc
Account Status: Active, inoperative, dormant
Account vintage: less than six months old etc
Presence in regulatory negative / PEP / defaulter / Fraudster lists
Suspicious Transaction Reports (STR) filed for the customer
AML Alerts
7.1.1. High Risk

Customers who are likely to pose a higher than average risk to the bank may be categorized as High
Risk or Medium Risk depending on customer's background, nature and location of activity, country
of origin, sources of funds income / turnover levels and his client profile etc.
The indicative list of customers in High Risk Category requiring higher due diligence include
High net worth individuals

Non-face to face customers
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Non-resident customers / foreigners irrespective of the place of residence / jurisdictions /

locations. Hence all NRI customers are to be classified as High Risk only; not as
Medium/Low risk.
Customers engaged in cash intensive businesses, dealers in Art / Antique Goods, Bullion ,
Jewellery, Precious Metals , Arms/Ammunition & Real Estate.
Politically Exposed Persons (PEPs) of foreign origin, customers who are close relatives of
PEPs and accounts in which a PEP is the ultimate beneficial owner
Persons with dubious reputation as per public information available.
Firms with 'sleeping partners'
Companies having close family shareholding or beneficial ownership.
Multi level marketing companies & Money Services Bureau etc.
All trusts including public and private trusts, charities, unregulated clubs / organizations &
NGOs and organizations receiving donations (excluding NPOs / NGOs promoted by United
Nations or its agencies)
Non-Banking Financial Companies / Institutions
Banks are required to apply enhanced due diligence measures for high risk customers, especially
those for whom the sources of funds are not clear and obtain information on the customer beyond
documentary evidence such as information on net worth, intended business activity in case of NRI
customers etc. Besides obtaining higher level of approvals for opening such accounts, Banks are
also required to take up verification of customer information with independent data sources.
7.1.2. Medium Risk
Examples of customers in Medium Risk Category include
Providers of telecommunications service, internet caf, IDD call service, phone cards, phone
center
Travel agency etc
7.1.3. Low Risk

Customersindividuals and entitieswhose identities and sources of wealth can be easily
identified and transactions in whose accounts by and large conform to the known profile may be
categorized as low risk.
Illustrative examples of low risk customers include
Salaried employees / Pensioners whose salary structures are well defined,
People belonging to lower economic strata of the society whose accounts show small
balances and low turnover,
Government departments & Government owned companies,
Regulators and statutory bodies etc.
In Low Risk Accounts, it is advised that only the basic requirements of verifying the identity and
location of the customer are to be met. All borrowal customers where due diligence is done at the
time of granting the facilities will also fall under the low risk category except borrowal accounts
having dealings with High / Medium risk countries which need to be classified accordingly.
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7.2 Turnover / Income Criteria for Customer Risk Categorisation

Besides the above parameters for Risk Categorisation (viz. Contitution / Domicile of the Customer /
Product / Services availed), the Credit Summations (Turnover) in the Account in a year
representing the Gross Income/Turnover of the constituent has been adopted as one of the criteria
for customer Risk Categorisation. Customers, in whose account the aggregate credits to the
account fall within the range as specified hereunder, are to be classified accordingly:
Customer Type Low Risk - Medium Risk - High Risk -
/ Annual Income/ Annual Income/ Turnover Annual Income/
Constitution Turnover Turnover
Individuals Upto and Above Rs.10 lakhs &
Clubs & inclusive of Rs.10 (below) Upto and inclusive Above Rs. 50
Associations lakhs of Rs.50 lakhs lakhs
Sole Upto and Above Rs. 1 Crore &

Above Rs. 5
Proprietary inclusive of Rs. 1 (below) Upto and inclusive
Crore of Rs.5 Crore Crore
concerns
Upto and Above Rs. 5 Crore &

Partnership Above Rs.10
inclusive of Rs.5 (below) Upto and inclusive
firms Crore of Rs.10 Crore Crore
Limited Cos. Upto and Above Rs.10 Crore &

Above Rs. 50
(Public & inclusive of Rs.10 (below) Upto and inclusive
Crore of Rs.50 Crore Crore
private)
7.3. Review of Customer Risk Categorisation (CRC Review)

a. RBI Guidelines mandate that Banks should put in place a system of periodical review of risk
categorization of accounts and the need for applying enhanced due diligence measures. Such
review of risk categorization of customers should be carried out at a periodicity of not less
than once in six months.
b. Since CRC is an on going process, a 'risk date' i.e. a cut-off date would need to be
determined to serve as a start date for the process of risk categorisation and the periodic
reviews will be reckoned from this date. Accordingly the half yearly Risk Review Dates for
completing the CRC Review have been given as 31st January and 31st July every year.
c. During such review, the risk assigned to an existing customer may undergo change
depending upon the changes in the parameters, constituting his profile. The major challenges
in the Review of Customer Risk Categorization are the availability of data and its accuracy
and the timelines suggested for reviewing all accounts on an half yearly basis.
d. Considering the above the Turnover / Income Criteria for Customer Risk Categorisation
spelt out in 7.2 above is being adopted for Review of Customer Risk Categorization as this is
one of the important and quantifiable parameters for review.
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e. Reports furnishing information regarding the accounts breaching the turnover criteria are
being generated by CBS PO and pushed to Branches for Review: For other accounts not
exceeding the turnover stipulated the existing Risk Categorisation will be continued.
f. The Review of Customer Risk Categorization as given above will be in addition to branch
level override, based on specific inputs from the Customer or others, such as change in
Constitution etc.
7.4. Accounts of Multi Level Marketing Firms (MLMs)
Certain firms posing as Multi Level Marketing (MLM) agencies for consumer goods and services
have been mobilizing large deposits from the public (with promise of high return) by opening
accounts at various bank branches. These funds running into crore of rupees were being pooled at
the principal accounts of the MLM Firms and were eventually flowing out of the accounts for
purpose appearing illegal or highly risky. Hence while opening agency accounts in the name of
proprietary concerns, utmost customer due diligence is to be undertaken.
a) Branches shall undertake quick review, in cases where accounts have already been opened in
the names of the marketing agencies, retail traders, investment firms, following RBI guidelines.
b) Wherever large number of cheque books has been issued to such firms, the relative decision
may be reviewed in the light of the following:
Whether the cheque books have been issued to customers on the basis of their express request
and after following the internal processes laid down in the matter.
Whether the number of cheque books is consistent with / matching the profile of the customers
as also their nature of business operations.
c) Unusual operations noticed during the above review may be immediately reported to their
respective Zonal Offices who will file STR to Corporate Office AML Cell, to enable them to report
to other appropriate authorities such as Financial Intelligence Unit (FIU-IND).
7.5 Money Mules

(CO:Inspection Dept Cir No.Admin-59/10-11 dated 24.12.2010)
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.
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 and not up to date, making it difficult
for enforcement agencies to locate the account holder.
If the accounts are opened with partial compliance / non-compliance of KYC norms, unscrupulous
persons may misuse this situation for money laundering operations as money mules and it will be
difficult to locate the account holder and bank will be exposed to high risk.
35
7.6.Closure Of Non-KYC Complied Accounts
Where the branch is unable to apply appropriate KYC measures due to non-furnishing of
information and/or non-cooperation by the customer, despite repeated reminders by banks, branches
should impose partial freezing on such KYC non compliant accounts in a phased manner. The
procedure to be followed for imposing partial freeze is given below.
i. A notice to be sent to the customer requesting to produce the KYC documents to the home
branch within three months. Copy of the letter to be preserved carefully for records.
ii. If the customer do not sumit the documents within the period, a reminder to be sent to the
customer giving another three months time to produce the KYC documents.
iii. Inspite of repeated requests, if the customer do not comply with the guidelines, branch may
impose a partial freezing by allowing all credits and disallowing all debits.
iv. Customer would be free to close the account any time during the period.
v. If the accounts are still KYC non-compliant after six months of imposing initial partial
freezing, banks may disallow all debits and credits from/to the accounts rendering them
inoperative.
vi. Further it would always be open to the Branch to close the accounts of such customers.
Branch Manager may take the decision after ensuring completion of formalities.
7.5.Ring Fencing:
In the case of accounts where submission of KYC has not been complied by customers at the time
of opening or periodic updation, Ring Fencing will be applied which will disallow peripheral
utilities such as ATM, Netbanking, Mobile Banking. When the customers approach the branches
for re-activation of such utilities, branches have to immediately get the appropriate KYC documents
and update in the system and then only take up for activation of the facilities.
8. Suspicious Transaction Reports (STR)

a) Suspicious Transactions means a transaction including an attempted transaction, whether or
not made in cash which, to a person acting in good faith-
i. gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence
specified in the Schedule to the Act, regardless of the value involved or
ii. appears to be made in circumstances of unusual or unjustified complexity or
iii. appears to have no economic rationale or bonafide purpose or
iv. gives rise to reasonable ground of suspicion that it may involve financing of the activities
relating to terrorism.
Transaction involving financing of the activities relating to terrorism includes transaction
involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or
by a terrorist, terrorist organisation or those who finance or are attempting to finance terrorism.
b) While determining suspicious transactions, branches should be guided by definition of
suspicious transaction contained in PMLA Rules as amended from time to time.
36
i. It is likely that in some cases transactions are abandoned / aborted by customers on being
asked to give some details or to provide documents. It is clarified that Branches should report
all such attempted transactions in STRs, even if not completed by customers, irrespective of
transaction amount.
ii. Branches should make STRs if they have reasonable ground to believe that the transaction
involve proceeds of crime generally irrespective of the amount of transaction and/or the
threshold limit envisaged for predicate offences in part B of Schedule of PMLA, 2002.
iii. Branches should verify the customers identity and address 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. Further, if the branch has a
reason to believe that customer is intentionally structuring a transaction into series of
transactions below the threshold of Rs.50000/- the branch should verify the identity and
address of the customer and also consider filing a Suspicious Transaction Report (STR).
iv. The Suspicious Transaction Report (STR) should be furnished 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.
v. Branches should not put any restrictions on operations in the accounts where an STR has been
made. Branches and the employees should keep the fact of furnishing of STR strictly
confidential, as required under PML rules. Moreover, it should be ensured that there is no
tipping off to the customer at any level.
8.1. Alert Indicators (Customer Behavioral based) of Suspicious Transactions for
identification at Branch level:
Broad categories of reason for suspicion and examples of suspicious transactions based primarily
on Customer Behavioral Patterns given in Recommendations of IBA Working Group which are
Red Flag Indicators for Branches are given below:
SNo Alert Indicator Indicative Rule / Scenario
1 Customer Verification (C V)
Customer did not open account after being
CV1.1 - Customer left without
informed about KYC requirements
opening account
2 CV2.1 - Customer offered Customer gives false identification documents
false or forged identification or documents that appears to be counterfeited,
documents altered or inaccurate
3 CV2.2 - Identity documents Identity documents presented are not verifiable
are not verifiable i.e. Foreign documents etc.
4 CV3.1 - Address found to be Address provided by the customer is found to be
non existent non existent
5 CV3.2 - Address found to be Customer not staying at address provided during
wrong account opening
6 CV4.1 - Difficult to identify Customer uses complex legal structures or where
37

beneficial owner it is difficult to identify the beneficial owner
7 Law Enforcement Agency
Query L Q Customer has been the subject of inquiry from
L Q1.1 - Customer is being any law enforcement agency relating to criminal
investigated for criminal offences
offences
8 LQ2.1 - Customer is being Customer has been the subject of inquiry from
investigated for TF offences any law enforcement agency relating to TF or
terrorist activities
9 Media Report (M R) Match of customer details with persons reported
MR1.1 - Adverse media report in local media / open source for criminal
about criminal activities of offences
customer
10 MR2.1 - Adverse media report Match of customer details with persons reported
about TF or terrorist activities in local media / open source for terrorism or
of customer terrorist financing
related activities
11 Employee Initiated (E I) Customer did not complete transaction after
EI1.1 - Customer did not queries such source of funds etc.
complete transaction
12 EI2.1 - Customer is nervous Customer is hurried or nervous
13 EI2.2 - Customer is over Customer over cautious in explaining
cautious genuineness of the transaction.
14 EI2.3 - Customer provides Customer changes the information provided after
inconsistent information more detailed information is requested.
Customer provides information that seems
minimal, possibly false or inconsistent.
15 EI3.1 - Customer acting on Customer has vague knowledge about amt of
behalf of a third party money involved in the transaction.
Customer taking instructions for conducting
transactions
Customer is accompanied by unrelated
individuals.
16 EI3.2 - Multiple customers Multiple customers arrive together but pretend to
working as a group ignore each other
17 EI4.1 - Customer avoiding Customer travels unexplained distances to
nearer branches conduct transactions
18 EI4.2 - Customer offers Customer offers different identifications on
different identifications on different occasions with an apparent attempt to
different occasions avoid linkage of multiple transactions.
19 EI4.3 - Customer wants to Customer makes inquiries or tries to convince
avoid reporting staff to avoid reporting.
38

20 EI4.4 - Customer could not Customer could not explain source of funds
explain source of funds satisfactorily
21 EI5.1 - Transaction is Transaction is unnecessarily complex for its
unnecessarily complex stated purpose.
22 EI5.2 - Transaction has no The amounts or frequency or the stated reason of
economic rationale the transaction does not make sense for the
particular customer.
23 EI5.3 - Transaction Transaction involving movement of which is
inconsistent with business inconsistent with the customers business
24 EI6.1 Unapproved inward Foreign remittance received by NPO not
remittance in NPO approved by FCRA
25 Public Complaint (P C ) Complaint received from public for abuse of
PC1.1 - Complaint received account for committing fraud etc.
from public
26 Business Associates (BA) Alert raised by agents about suspicion
BA1.1 - Alert raised by agent
27 BA1.2 - Alert raised by other Alert raised by other institutions, subsidiaries or
institution business associates including cross-border
referral
Besides the above indicative list of Customer Behavioral based Alert Indicators, Branches are also
required to be observant regarding transactions by Walk-in Customers structured below threshold
limits to avoid disclosure of information required under statutes cash transactions kept below Rs.
50000/ to avoid furnishing Pan No etc, Branches are advised to make use of the on line tools
provided in AML Gateway CBS Helpdesk for submitting STRs to AML Cell at Corporate Office
9. COMBATING FINANCING OF TERRORISM
Combating Financing of TerrorismObligations under Unlawful Activities Prevention Act

1967 Amendment & order dated August 27, 2009
a) In terms of PMLA Rules, 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.
b) As and when list of individuals and entities, approved by Security Council Committee
established pursuant to various United Nations' Security Council Resolutions (UNSCRs), are
received from Government of India, Reserve Bank of India circulates these to all Banks and
financial institutions.
c) The UN Security Council has adopted Resolutions 1988 (2011) and 1989 (2011) which have
resulted in splitting of 1267 Committees Consolidated List into two separate lists, namely:
39
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.
ii. 1988 Sanctions List: which is maintained by the 1988 Committee. This list consists of
names previously included in Sections A (Individuals associated with Taliban) and B
(entities and other groups and undertakings associated with the Taliban) of the
consolidated List.
Note: 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.
The consolidated lists of individuals and entities relating to the sanctions lists Al-Qaida, Taliban
and OFAC are ported in CBS Help Desk and Branches should ensure before opening any new
account, the name/s of the proposed customer does not appear in the list. Full details of accounts
bearing resemblance with any of the individuals / entities in the list should immediately be
intimated to RBI and FIU-IND through Corporate Office AML Cell.
c) RBI advised all the Banks to strictly follow the procedure laid down in the UAPA Order dated
August 27, 2009 issued by Government of India for implementation of Section 51 A of the UAPA
relating to the purposes of prevention of, and for coping with terrorist activities. and ensure
compliance with the same.
i) In line with the provisions contained therein, Corporate Office AML Cell maintains updated list
of individuals and entities subject to UN sanctions (referred to as designated lists) from RBI in
electronic form and branches should 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.
ii) In case, the particulars of any of their customers match with the particulars of designated
individuals / entities, the Branches 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 respective Zonal Office and inturn Zonal Office should report to Corporate Office
AML Cell for onward reporting to The Joint Secretary, Ministry of Home Affairs.
iii) Corporate Office AML Cell shall also send a copy of the communication mentioned in (2)
above to the UAPA Nodal Officer of RBI, Chief General Manager, Department of Banking
Operations and Development, RBI, Mumbai.
iv) Corporate Office AML Cell shall also send a copy of the communication mentioned in (2)
above to the UAPA Nodal Officer of the State / UT where the account is held as the case may
be and FIU-India.
v) In case, the match of any of the customers with the particulars of designated individuals /
entities is beyond doubt, the Branches would prevent designated persons from conducting
financial transactions, under intimation to Corporate Office AML Cell for reporting to The Joint
Secretary, Ministry of Home Affairs.
vi) Corporate Office AML Cell shall also file a Suspicious Transaction Report (STR) with FIU
IND covering all the transactions in the accounts covered by paragraph (2) above carried
through or attempted as per the prescribed format.
40
vii) Branches 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 RBI from time to time branches should also consider publicly available
information for identifying countries, which do not or insufficiently apply FATF
recommendations. Branches 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.
viii) Branches should examine the background and prupose of transactions with persons (including
legal persons and other financial institutions) from jurisdictions included in FATF statements
and countries that do not or insufficiently apply the FATF recommendations. Further, if the
transactions have no apparent economic or visible lawful purpose, the background and purpose
of such transaction should, as far as possible be examined, and written findings together with all
documents should be retained and made available to Reserve Bank/ other relevant authorities.
10.Central KYC Registry (CKYCR)
10.1.Government of India vide their Notification dated November 26, 2015 authorised the Central
Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), set up
under sub-section (1) of Section 20 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (54 of 2002), to act as and to perform the functions of
the Central KYC Records Registry under the said rules, including receiving, storing, safeguarding
and retrieving the KYC records in digital form of a client, as defined in clause (ha) of sub-section
(1) of Section 2 of the Prevention of Money-Laundering Act, 2002. The Central Government have
also amended the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 vide
Notification dated 7th July, 2015 for the purpose of establishment of Central KYC Registry. As per
Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2015, Rule 9 (1A),
every bank shall within three days after the commencement of an account-based relationship with a
client, file the electronic copy of the clients KYC records with the Central KYC Registry.
10.2.Apart from the data captured pertaining to a customer, the scanned copies of the following are
also to be uploaded to CKYCR, on a daily basis.
1.Proof of Identity
2.Proof of Address
3.Photo
4.Signature
10.3.CKYCR assigns a 14-digit KYC identifier for a customer record opened with any bank or
financial institution, if satisfied with the credenitals provided by such bank/financial institution. The
customer can use this KYC identifier across banks/financial institutions and open accounts without
having to submit the KYC documents once again.
10.4.Uploading of KYC data:

a) While opening a CIF, branch should verify the identity of the customer and perform the
initial due diligence of the customer. Where a customer submits a KYC Identifier, the
branch can download the KYC records from the Central KYC Registry by using the KYC
Identifier and need not insist the customer to submit the documents again, unless
41
i. There is a change in the information of the customer as existing in the records of

Central KYC Registry.
ii. The current address of the client is required to be verified.
iii. it is considered necessary in order to verify the identity or address of the client, or to
perform enhanced due diligence or to build an appropriate risk profile of the client.
b) The bank shall not use the KYC data of a customer obtained from the Central KYC Registry
for purposes other than verifying the identify or address of the client and shall not transfer
KYC records or any information contained therein to any third party unless authorised to do
so by the client or by the Regulator or by the Director.
c) The branch which performed the last KYC verification or sent updated information in
respect of a client shall be responsible for verifying the authenticity of the identity or
address of the client.
10.5.1.Update of KYC Record:
In case of change of existing information of a customer (including minor turning major) in the
records of Central KYC Registry, the branch should initiate an update request.
a) The updated data along with the scanned copy of the supporting document, where required,
will be uploaded on the Central KYC Registry portal.
b) In order to initiate an updation request, the branch should to have the latest KYC record of
the customer.
c) On updation of a KYC record at the Central KYC Registry, all linked entities will receive an
electronic update notification of KYC record. The entities can download the last updated
record of the customer.
10.5.2.Multiple correspondence addresses:
Central KYC Registry will enable linkage of multiple correspondence addresses.
An individual can submit details of multiple addresses to the bank which in turn will initiate the
update request on the Central KYC application.
10.6. Processing of Records at Central KYC Registry
De-duplication: The KYC data uploaded on the Central KYC Registry will go through de-duplication
process on the basis of the demographics (i.e. customer name, maiden name, gender, date of birth,
mothers name, father/spouse name, addresses, mobile number, email id etc.) and identity details
submitted. The de-duplication process uses normaliser algorithm and custom Indian language phonetics.
i. Where an exact match exists for the KYC data uploaded, the bank will be provided with the KYC
identifier for downloading the KYC record.
ii. Where a probable match exists for the KYC data uploaded, the record will be flagged for
reconciliation by the bank.
42
10.7.Reconciliation of Probable match:
a) Central KYC Registry will provide the probable match cases to the reporting entities for
reconciliation and resolution.
b) Where the bank confirms the KYC record as an exact match, it will need to download the existing
KYC record of the customer.
c) Where the bank confirms the KYC record as a no match, it shall be forwarded for processing and a
unique KYC identifier will be generated for the record.
d) The bank will have to resolve the probable matches within 5 working days, beyond which the record
will be withdrawn by the Central KYC Registry. However, the same can be uploaded as a new record, if
no match is found.
10.8.ID Match:
The identity detail will be matched by the Central KYC Registry with the ID issuing authority
wherever feasible and mechanism is established. Where the ID is not confirmed by the ID issuing
authority or the name does not match with the records therein, the record will not be accepted by
the Registry and sent back to the bank for verification and uploading again with the updated details.
10.9.KYC Identifier:
a) A 14 digit unique KYC identifier will be generated for new customer records and notified to
the bank.
b) For Small Accounts the KYC identifier will additionally have a prefix S.
c) For simplified Measures Accounts the KYC identifier will additionally have a prefix L.
Bank/Branches can download the KYC record from the KYC Registry, for the KYC
Identifier.
The KYC data of a customer obtained from the Central KYC Registry should not be used
for any purpose other than verifying the identify or address of the client and KYC records or
any information contained therein should not be transferred to any third party unless
authorised to do so by the client or by the Regulator or by the Director.
The Bank which performed the last KYC verification or sent updated information in respect
of a client shall be responsible for verifying the authenticity of the identity or address of the
client.
Action points for Branches:
Certain fields are mandatory for uploading the data to the Central KYC Registry. Amendments
have been made in the CIF screen to capture mandatory fields such as fathers name, mothers
name, expiry date for ID proof-Driving Licence and passport, etc. Branches should ensure that
the patch for amended CIF screen has been applied to capture all the mandatory fields.
The process involves two steps:

(1) Scanning and Uploading using the KYC_V2 software and
(2) Authorisation of the uploaded records in the URL.
43
Scanning & Uploading:
Scanning of documents should be done through kyc_v2.exe. The latest software is available
in Intranet->Downloads->kyc scanning software.
Save the software in the system which is attached to the scanner.
Click the exe and login to the application by using SR No. A&L Password.
All the CIF to be scanned will be displayed on the screen for scanning.
Place the application form in the scanner. If branches have used the new CIF opening form
(which was released on August 2016 and available in Intranet), the application will
automatically detect the position i.e top right of the form and display the photo in the screen.
Similarly for signature for which space is available below the photo in the revised
application form, the application will pick up the signature from the form. Branches have to
view , scan and finally upload the same.
Authorisation:
The uploaded records have to be authorized using the URL http://10.100.12.223/ekyc/.
The process will be complete only after authorization.
ERROR RECORDS:
CIF having errors without sufficient information are displayed in the authorisation
application. Error records should be viewed and rectified in CBS. After rectification, the
records will be displayed in the scanning software on the next day for scanning and
uploading again.
BRANCHES SHOULD ENSURE THAT
PATCH FOR AMENDED CIF SCREEN IS APPLIED FOR CAPTURING MANDATORY

FIELDS.
NEW APPLICATION FORM FOR EACH CUSTOMER IS USED FOR CIF OPENING.
THE UPLOADING AND AUTHORISATION IS DONE ON A DAILY BASIS.
11.Record Management:
a) Branches should maintain all necessary record of transactions between the bank and customer,
bnoth domestic and international for at least five years from the date of transaction.
b) Branches should preserve the account opening form with proof of identity and proof of address
obtained while opening the account and during the course business relationship for at least five
years after the business relationship is ended.
c) Branches should be able to produce the identification records and transaction data to the
competent authorities upon request.
44
d) Branches are required to maintain the information in respect of transactions referred to in Rule 3
of PMLA, 2002 as follows:
a. The nature of the transactions;
b. The amount of the transaction and the denominated currency
c. The date on which the transaction was conducted; and
d. The parties to the transaction
12.1. Reporting obligations to Financial Intelligence Unit India: In terms of the PMLA rules,
the following reports should be sent to the Director, Financial Intelligence Unit-India (FIU-IND),
New Delhi in respect of transactions referred to in Rule 3:
i. Cash Transaction Report (CTR)
ii. Non Profit Organizations Transaction Report (NTR)
iii. Cross Border Wire Transfer Reports (CWTR)
iv. Counterfeit Currency Report (CCR)
v. Suspicious Transaction Report (STR)
12.1.1.Cash Transaction Report (CTR)

a. All cash transactions of the value of more than Ten lakh rupees or its equivalent in foreign
currency;
b. All series of cash transactions integrally connected to each other which have been
individually valued below Rupees Ten lakh or its equivalent in foreign currency where such
series of transactions have taken place within a month and the monthly aggregate exceeds
an amount of Ten lakh rupees or its equivalent in foreign currency.
12.1.2.Non-Profit Organization Transaction Reports (NTR)
a. PMLA Amendment Rules 2009 defines Non-Profit Organization as any Entity or

Organization that is registered as a trust or a society under the Societies Registration Act,
1860 or any similar State legislation or a company registered under Section 8 of Companies
Act 2013.
b. All transactions involving receipts by Non-Profit Organizations (Accounts) of value more

than rupees ten lakhs or its equivalent in foreign currency should be filed every calendar
month with FIU-Ind before 15th of the succeeding month
12.1.3.Cross Border wire transfer report (CWTR):
All cross border wire transfers of the value of more than five lakh rupees or its equivalent in foreign
currency where either the origin or destination of fund is in India.
12.1.4.Counterfeit Currency Report: All cash transactions, where forged or counterfeit Indian
currency notes have been used as genuine should be reported
12.2.While the CTR, NTR, CWTR are filed by CO:AML Cell based on reports generated from
Information Technology Department, the Counterfeit Currency Report is filed based on the reports
given by branches. Hence all Branches and Currency Chests should inform the Counterfeit Currecy
45
Notes as and when detected, through the repsective Zonal Offices, indicating Branch Name, Date of
Detection, Serial Number, Demomination.
13.Other guidelines:
13.1.Period for presenting payment instruments:
Payment of cheques/drafts/pay orders/bankers cheques should not be made, if they are presented
beyond the period of three months from the date of such instruments.
13.2. Collection of Account Payee Cheques
Account payee cheques for any person other than the payee constituent should not be collected.
Branches may collect account payee cheques drawn for an amount not exceeding rupees fifty
thousand to the account of their customers who are co-operative credit societies, provided the
payees of such cheques are the constituents of such co-operative credit societies.
13.3. Pre-paid Payment Systems
Pre-paid instruments (PPI) are payment instruments that facilitate purchase of goods and services
against the value stored on these instruments. The value stored on such instruments represents the
value paid for by the holders by cash, by debit to a bank account, or by credit card. The pre-paid
payment instruments can be issued in the form of smart cards, magnetic stripe cards, internet
accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers, etc.
PPI Issuers should ensure strict adherence to the instructions issued by Department of Payment and
Settlement System of Reserve Bank of India through their Master Directions.
13.4.Secrecy obligations and sharing of information:
13.4.1.Branches should maintain secrecy regarding the customer information which arises out of
the contractual relationship between the banker and the customer. The exceptions to this rule shall
be
1) where there is a duty to the public to disclose
2) the interest of the bank requires disclosure
3) where the disclosure is made with the express or implied consent of the customer.
13.5.Credit cards/debit cards/smart cards/gift cards/Travel Cards/ Mobile Wallet/

Netbanking/ Mobile Banking/ RTGS/NEFT/IMPS, etc.
Branches should pay special attention to any money laundering threats that may arise from new or
developing technologies that might favour anonymity, and take measures, if needed, to prevent
their use in money laundering schemes. Branches are required to ensure full compliance with all
KYC/AML/CFT guidelines issued from time to time, in respect of add-on / supplementary
cardholders also. Branches should ensure that appropriate KYC procedures are duly applied before
introducing new products/services/technologies.
46
14.COMPLIANCE OF FATCA & CRS REGULATIONS FOR 2017-18
1. Observance of important time lines:
Timelines as regards treatment of reportable accounts as pre-existing/new, reporting deadlines,

completion of due diligence, closure in respect of accounts of recalcitrant/undocumented account
holders, etc. are being issued by CBDT from time to time and reiterated by our Banks circulars.
Branches are advised to be on the lookout for these deadlines so as to ensure compliance with the
instructions within the stipulated deadlines.
2. Process of reporting :
Under the regulations, our Bank is a Reporting Financial Institution (RFI) with GIIN No.-
KZUSS5.99999.SL.356. Our Bank has also registered with CBDT and
is submitting the mandatory report (form 61B) online. Our overseas branches have also registered
with IRS and obtained GIIN numbers as follows:
1. Singapore branch - GIIN No. KZUSS5.99999.BR.702
2. Srilanka -GIIN No. KZUSS5.99999.BR.144
Both the centres have to comply with the reporting requirement as per the guidelines of the
regulatory authority of the respective countries.
On an ongoing basis, the bank will review its eligible accounts to identify reportable accounts by
applying due diligence rules. The progress in respect of completing due diligence (viz., obtaining
self certification alongwith necessary documentary proof where necessary and completing personal
verification in case of high value accounts) is reviewed to ensure error-free reporting of relevant
information in respect of identified reportable accounts in form 61B.
2.1.Reportable accounts:
Generally, balances held by reportable account holders under all types of liability products (e.g.
savings bank, term deposits, etc) will be reported. Certain types of accounts like no frills accounts,
pension accounts, accounts opened under senior citizens savings scheme, etc. are excluded from
reporting. For a wider definition, branches are advised to go through the guidance notes and
directives issued by the Nodal Authority/Regulator from time to time. Such directives are available
in public domain. Clarifications can be sought from the Principal Officer, only after exhausting
reference material available in public domain.
2.2.Reportable Person:
All the reportable accounts held by a reportable person are required to be reported. A reportable
person may be a specified US person or a person who is tax resident in other countries in respect of
CRS reportable account. The reportable person could be an individual, group of individuals (joint
accounts) or an entity or a controlling person of the entity. For a wider definition/understanding,
branches may refer to the guidelines issued by the Nodal Authority / Regulator. In general, for the
account holder, one may generally apply the tax residency status of the individual/entity/controlling
person to determine whether the account holder would be reportable or not under FATCA/CRS
rules. Further, in the case of controlling persons, branches may have to pierce through the
corporate veil to detect the beneficial owners and find out whether they would be reportable under
the Regulations. For this purpose, branches may be guided by circular instructions/PMLA
47
notifications issued by the RBI from time to time. The following criteria, inter alia, may be used to
identify the controlling persons in a passive Non-financial entity.
Person having 25% (or) more of share in the Entity
Person having 25% (or) more of Voting Rights in the Entity
Person having right to appoint the majority of the Directors of the Board of Directors
Person having the right to execute significant influence or control over the Entity
Person having the control over the day-to-day activities of the Entity
Senior Managing Official of the Entity
In the case of accounts held by trusts, HUFs, etc., detailed instructions have been given in the
guidance notes to classify whether they would be entity accounts or not and in case of doubt,
branches may refer to the Corporate Office and seek clarification on classification of an account
holder.
3. Due diligence Procedure:
The Bank needs to identify the reportable accounts by carrying out the due diligence procedures.
Due diligence procedure encompasses identification of an account (as reportable or otherwise),
based on certain indicia, curing the same by obtaining necessary declaration/certification and
recording these particulars in the Banks records. Due diligence may also necessitate personal
verification of an account holder, in case of high value accounts.
There are different due diligence procedures for accounts held by individuals and accounts held by
entities, as also whether an account is a pre-existing or new account under FATCA /CRS rules. The
due diligence procedure is also dependent on the balance in the account (high value or low value).
Branches may refer to the circular instructions and guidance notes issued from time to time to
determine the type/nature of due diligence procedure to be applied. Similarly, certain types of
accounts based on balance/nature (known as exempted accounts) are not required to be reported and
hence such accounts need not be reviewed for the purpose of completing due diligence. Indicia
checking is required to be carried out electronically and where correct / full details are not available
through electronic search, a physical search of documents is required to be carried out by the
operating units. In view of this, it is extremely important for the branches to capture vital data in
the Banks core banking solution to obviate the need for carrying out a physical search.
3.1. Indicia curing and completion of documentation:
For accounts opened from 1st July 2014, branches should ensure that tax residency and other vital
particulars are obtained/captured at the time of opening of the account. As regards pre-existing
accounts, branches have to take extra efforts to identify reportable accounts, in as much as many of
the indicia have not been captured correctly in the Core Banking System at the time of migration.
As an example, branches may look out for existence of tax residency/nationality status for such
accounts, periodic outward/inward remittances occurring in an account where residency details are
not captured properly, accounts operated by power of attorney holders for whom KYC formalities
have not been completed, etc. Similarly, in case of an existing account, whenever an account
holder approaches the bank changing certain static particulars like address, phone number, email-id,
etc. branches have also to check /update tax-residency status and promptly report change of status
to the Corporate Office for reporting such account holders on the basis of changed residency status
and an audit trail of such change should be recorded.
48
3.2 Due Diligence Procedure for High Value Individuals Accounts, where the Aggregate
Balance is USD Equivalent exceeding 1 Million:
The Branch Manager (or) the Account Manager/Relationship Manager has to verify the paper
records available with the Bank, apart from Electronic Indicia Check to ensure that the correct tax
residency status of the Account Holder and he/she has to make discreet enquiries, wherever
necessary to decide on the reportable nature of the High Value Account Holder. The certificate
from the Branch Manager for each High Value Account Holder/Accounts has to be preserved in
Branch for audit Purposes.
3.3.Advices to account holders at the time of indicia checking, indicia curing and
documentation:
It is the stated policy of our Bank that we would comply with all the statutory rules and regulations
framed by the Government and its statutory bodies. Under the circumstance, it is the responsibility
of branches to ensure that at no point of time, they give any advice to the account holder which may
result in a reportable account not getting reported under FATCA & CRS Regulations. It may so
happen that the account holder may approach the branches for guidance on tax matters under the
Regulations. In such circumstances, the branches may advise the account holder concerned to
approach their tax advisers for any course of action to be adopted by them. The Bank or its
employees are not expected to be a party to the tax evasion/avoidance.
3.4. Accounts of Non Participating Financial Institutions (NPFI) and Passive Non-Financial
Entities:
In case of Financial Institutions, branches should get the GIIN details and record the same in the
Bank records. If the FI does not provide GIIN details, it will be treated as an NPFI and the details
of such NPFI should be reported to Corporate Office for reporting in 61B along with the payments
made to them. In the case of Non Financial Entities, the nature/quantum of passive assets and
passive income has to be considered as the basis for determining the entity as Passive Non-
Financial Entity.
In the case of Passive Non-Financial Entity, due diligence has to be conducted on the controlling
persons and they have to be reported if they are tax resident outside India. If the Passive Non-
Financial Entity doesnt provide the list of controlling persons and there are reasons to believe that
the controlling persons could be of tax residents outside India, the Branch Manager has to verify the
paper records and the information available in the Public domain to ascertain the FATCA/CRS
status of the controlling persons to arrive at the reportable nature of the controlling persons.
Evidential documents scrutinized by the Branch Manager have to be preserved at the Branch level
for review by the auditors/regulators.
3.5. Timeline for completion of due diligence:
Timelines have been advised by the Nodal Authority for completion of due diligence in respect of
all account holders, more specifically in case of pre-existing accounts. Branches should take every
effort to complete this exercise, failing which the accounts of such account holders need to be
closed. Branches should be on the lookout for issue of instructions in this regard and keep
sensitizing the account holders on the need to complete due diligence in a timely manner.
49
3.6. Aggregation:
For the purpose of determining aggregate balance or value of financial accounts, the bank will be
required to take into account all financial accounts maintained by the Account Holder, related
parties/entities and to this extent, it would be necessary for the branches to ensure that separate
customer-ids are assigned to all joint account holders, controlling persons and beneficial owners.
Our Bank determines the identity of a customer by the unique Customer Id allotted for each
individual/entity and hence aggregation is done Customer ID-wise.
Individual Accounts, Joint Account and Sole Proprietors account will be treated as Accounts of
Individuals while all other types of accounts will be treated as Accounts of Entities.
In the case of Joint Accounts, the entire liability in the account will be assigned for each individual
associated with the account as the owner for the purpose of aggregation of liabilities.
4. New Customer On-boarding Procedure:
According to the FATCA/CRS Guidelines, the due diligence of the Customer has to be completed
at the time of opening of the account.
5. Reporting requirements:
After identification, the bank is required to report the details of account holders and accounts to the
Nodal Authority (CBDT) in a pre-defined format. For this purpose, the bank is required to store
the information on reportable account holders and accounts, both for reporting as also for inspection
and verification purposes by the Nodal Authority, Regulator and Auditors. As a measure of
fairness, the Bank also needs to inform/advise the account holders on the reporting requirements.
Such advice to account holders are done when the branches complete due diligence and
documentation and the documents for Identify Proof and Address Proof are to be obtained and
verified as per the document list provided by CBDT. In the case of Reportable Accounts, the Tax
residency documents/details are to be obtained certifying the Tax Identification Number (TIN),
Issuing Country, etc. as a part of due diligence procedure and the same should be preserved at
branch level.
Reporting to Nodal Authority is an annual exercise and should be completed within 31st May for
the position as on the last day (31st Dec) of the previous calendar year. The details of account
holders/accounts which have been reported will be shared with the branches for their record, as also
to verify/ensure correctness in reporting.
An account holder once reported under FATCA /CRS Compliant category would continue to be
reported till all the accounts of the account holder are closed even when the aggregate balance is
less than the threshold.
The branches should maintain records to capture any changes in the status of the account holder
mainly in tax residency status. The accounts of the account holder would require to be reclassified
according to the due diligence procedures for the purpose of deciding the reportable nature of the
account holder/accounts.
50
Annexure-I
Branch:. Date: ...
FORMAT FOR SUBMISSION OF DETAILS OF BENEFICIAL OWNERSHIP
1 CIF / Account Number
2 Name of Customer
3 Constitution (Trust/Partnership/Coy)
4 Nature of Business
5 Turnover / Last Year
6 Income / Last year
Details of persons with more than 25 % of Shares/ capital/ Profits in case of companies OR
more than 15% of Capital/ profits/ Entitlements/ interest in property etc in case of entities
other than companies.
Name of Person/s holding Relationship of Percentage KYC ID Number
More than 25% of shares or the Person with the of Share For Beneficial
entity such as holdings/ Owner: (For
capital or profits in case of companies more than
companies OR 15% of capital or Director / partner/ Profit
25% / others more
trustee / Secretary / sharing/
profits or entitlements or interest than 15% / Senior
President / Senior entitlements Managing Official)
in case of entities other than Managing Official / Interest
companies. etc etc
1
2
3
4
5
6
7 Others with holdings up to 25% in others
case of Company / 15% in case of
other entities
Total holdings 100 %
Note: In case there is no share holding / profit sharing / entitlement / interest sharing pattern etc
are available as per the Memorandum / Articles of Association, partnership/trust deed etc, then the
person exercising control through voting rights, agreements, arrangements if any OR the relevant
person who holds the position of Senior Managing Official will be the beneficial owner. Please
submit the KYC ID proof of the beneficial owner/s along with this format.
Signature of CEO/CFO/Director/Company Secretary/Managing Trustee etc
51
Annexure-II
KYC documents for eligible FPIs under PIS
FPI Type
Document Type Category I Category II Category III
Constitutive Mandatory Mandatory Mandatory
Documents
(Memorandum
and Articles of
Association,
Certificate of
Incorporation
etc.)
Entity Level
Proof of Address Mandatory Mandatory Mandatory
(Power of (Power of other than
Attorney Attorney Power of
{PoA} mentioning the Attorney
mentioning the address is
address is acceptable as
acceptable as address proof)
address proof)
PAN Card Mandatory Mandatory Mandatory
Financial Data Exempted * Exempted * Mandatory
Entity Level SEBI Mandatory Mandatory Mandatory

Registration
Certificate
Board Resolution Exempted * Mandatory Mandatory
@@
Senior List Mandatory Mandatory Mandatory
Management
(Whole Time
Proof of Identity Exempted * Exempted * Entity
Directors/
declares* on
Partners/
letter head full
Trustees/ etc.)
name,
nationality,
date of birth or
submits photo
identity proof
Proof of Address Exempted * Exempted * Declaration on
Letter Head *
Photographs Exempted Exempted Exempted *
52
List and Mandatory list Mandatory - list Mandatory

Signatures of Global of Global
Custodian Custodian
signatories can signatories can
be given in case be given in case
of PoA to of PoA to
Authorized Global Global
Signatories Custodian Custodian
Proof of Exempted * Exempted * Mandatory
Identity
Proof of Exempted * Exempted * Declaration on
Address Letter Head *
List Exempted * Mandatory (can Mandatory
declare no
UBO over
25%)
Ultimate
Beneficial Proof of Exempted * Exempted * Mandatory
Owner (UBO) Identity
Proof of Exempted * Exempted * Declaration on
Address Letter Head *
* 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.
@@ FPIs from certain jurisdictions where the practice of passing Board Resolution for the
purpose of opening Bank accounts, etc. is not in vogue, may submit Power of Attorney
granted to Global Custodian/Local Custodian in lieu of Board Reolution.
Category Eligible Foreign Investors

I. Government and Government related foreign investors such as Foreign Central Banks,
Governmental Agencies, Sovereign Wealth Funds, International/ Multilateral
Organizations/ Agencies.
II. a) Appropriately regulated broad based funds such as Mutual Funds, Investment
Trusts, Insurance /Reinsurance Companies, Other Broad Based Funds etc.
b) Appropriately regulated entities such as Banks, Asset Management Companies,
Investment Managers/ Advisors, Portfolio Managers etc.
c) Broad based funds whose investment manager is appropriately regulated.
d) University Funds and Pension Funds.
e) University related Endowments already registered with SEBI as FII/Sub Account.
III. All other eligible foreign investors investing in India under PIS route not eligible under
Category I and II such as Endowments, Charitable Societies/Trust, Foundations,
Corporate Bodies, Trusts, Individuals, Family Offices, etc.
53
Annexure-III
Branch.......................................... Date:.....................................
Format for Know Your Customer--Walk-in Customer Profile
(to be submitted along with two copies of Photo ID Proof)
CIF (Non-Customer) Number
Name Male / Female/

transgender
1 Father/Husband Name
2 Date of Birth Age
3 House No. / Flat No.
4 House Name/ Flat Name
5 Street No. / Name
6 Road / Location
7 Village / Area / Post
8 District
9 State
10 Pin code
11 Land line number if any
12 Mobile Number if any
13 e-mail id if any
14 ID type submitted Aadhaar Card issued by UIDAI
Table-1 Passport,
(Please Tick) Driving license
The Voters Identity Card
(2 Copies to be Job card issued by NREGA
enclosed) PAN Card
Others ..............................................(Pl specify)
15 ID Number
16 ID issued at (Place) Date
17 Signature of the walk-in
customer
Table-2: Other permitted documents: 1) Employee ID card issued by Government / Defense / reputed
institutions, 2) Pension Payment Orders with photograph 3) Photo ID issued by Post Offices, 4) Credit Card
with photograph, 5) Photo ID issued to bonafide students of a University 6) Kisan Card / 7) Disability Card /
8) Ration Card / PDS Card etc 9) Any other document to the satisfaction of the branch Manager.
54

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What are the major elements of the KYC guidelines classified as?

What are the major elements of the KYC guidelines classified as?

What procedures must branches follow to comply with KYC/AML/CFT requirements?

What procedures must branches follow to comply with KYC/AML/CFT requirements?

MAIN: GENL-14/2017-18 A DATE 27.04.

SUB : CUST - 02 CO: AML CELL FILE M-6 S - 106

Sub: Master Circular on Know Your Customer (KYC)/Anti Money Laundering

Periodical updation of KYC:

Fixing of Threshold Limits:

Customer Risk Categorisation:

Combating Financing of Terrorism:

Since non-compliance of KYC/AML/CFT guidelines is a serious issue and will attract

SNo Topics Page

3.5 Transactions relating to Foreign Exchange 24

b. deposit, withdrawal, exchange or transfer of funds in whatever currency, whether in cash

d. entering into any fiduciary relationship;

f. establishing or creating a legal person or legal arrangement.

(viii) Customer identification means undertaking the process of CDD.

Know Your Customer (KYC):

2. CUSTOMER IDENTIFICATION PROCEDURE (CIP)

2.1 Identification of customers is required in the following cases:

2.2.3. Obtention of Photographs

Partnership firms All partners

2.3 Customer due Diligence requirements (CDD) while opening accounts

2.3.1. Accounts of individuals:

KYC REQUIREMENTS FOR DIFFERENT TYPES OF CUSTOMERS

Provided Branches/Business Correspondents obtain authoristion from the

Branches can print/download directly, the prospective customers e-Aadhar

For Photo ID proof (For Low Risk customers alone)

7. Identity card with applicants photograph issued by Central/State Government

For Address Proof (For Low Risk customers alone)

6. Identity card with applicants photograph issued by Central/State Government

Single document for proof of identity and proof of address.

Document with a different name consequent to marriage

Specific type of customer such as Minor and House wife

D. PAN Card in the name of customer

For nature of Business and Financial status

A customer shall not be required to furnish separate proof of current address, if

2. Change of Permanent Address / Address as per proof of address

As long as permanent address does not change, the issue of separate

4. Time limit to submit KYC documents for Low risk customers

In case a customer categorized as low risk, is unable to submit the KYC

5. Time limit to submit proof of local address for foreign students

2. Self Help Groups

Self-attested photograph and

For Address Proof

authenticated/acknowledged by the Income Tax authorities / Copy of latest balance

For all Partners and all Beneficial owners

For Address Proof

For person/s who operate the account.

7. Trusts and foundations

For all trustees and all Beneficial owners

Term body of individuals includes societies.

Non-Resident Ordinary Account (NRO) account alone can be opened

1. Verification of copies of documents with original and Authentication:

2. Need for due diligence:

3. For identification of any other customer type or operational guidelines

AML guidelines with regard to Lockers.