RBI/ 2010-11/245
DBOD. AML. BC. No. 50/14.01.001/2010-11
October 26, 2010
The Chairmen/CEOs of all Scheduled Commercial Banks (excluding RRBs) /All
India Financial Institutions
Dear Sir,
Opening of bank accounts - salaried employees
Please refer to our Master Circular on Know Your Customer (KYC) norms
/Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism
(CFT)/Obligation of banks under PMLA, 2002 issued to banks vide
DBOD.AML.BC.No.2/14.01.001/2010 – 11 dated July 01, 2010. In Annex I to the
circular an indicative list of the nature and type of documents/ information
that may be relied upon for customer identification and address verification for
opening bank accounts has been given.
- It has been brought to our notice that for opening bank accounts of
salaried employees some banks rely on a certificate/letter issued by the
employer as the only KYC document for the purposes of certification of
identity as well as address proof. Such a practice is open to misuse and
fraught with risk. It is, therefore, clarified that with a view to
containing the risk of fraud banks need to rely on such certification only
from corporates and other entities of repute and should be aware of the
competent authority designated by the concerned employer to issue such
certificate/letter. Further, in addition to the certificate from employer,
banks should insist on at least one of the officially valid documents as
provided in the Prevention of Money Laundering Rules (viz. passport, driving
licence, PAN Card, Voter’s Identity card etc.) or utility bills for KYC
purposes for opening bank account of salaried employees of corporates and
other entities.
- These guidelines are issued under Section 35A of the Banking Regulation
Act, 1949 and Rule 7 of Prevention of Money-Laundering (Maintenance of
Records of the Nature and Value of Transactions, the Procedure and Manner of
Maintaining and Time for Furnishing Information and Verification and
Maintenance of Records of the Identity of the Clients of the Banking
Companies, Financial Institutions and Intermediaries) Rules, 2005. Any
contravention thereof or non-compliance shall attract penalties under
Banking Regulation Act.
Yours faithfully,
(Vinay Baijal)
Chief General Manager