RBI/2009-10/285
DBOD. AML.BC. No. 68 /14.01.001/2009-10
January 12, 2010
The Chairmen and Chief Executive Officers
(All Scheduled Commercial Banks excluding RRBs)
/ Financial Institutions/ Local Area Banks
Dear Sir,
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)
Amendment Rules, 2009 - Obligation of banks/Financial institutions
As you are aware Government of India vide its Notification
No.13/2009/F.No.6/8/2009-ES dated November 12, 2009, has amended the Prevention
of Money-laundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for Furnishing
Information and Verification and Maintenance of Records of the Identity of the
Clients of the Banking Companies, Financial Institutions and Intermediaries)
Rules, 2005. A copy of the Notification is enclosed for ready reference.
- Some of the salient features of the amendment, relevant to banks and
financial institutions, are as under:
Clause (ca) inserted in sub-rule (1) of Rule 2 defines "non-profit organization"
Clause (BA) inserted in sub-rule (1) of Rule 3 requires banks/financial
institutions to maintain proper record of all transactions involving receipts by
non-profit organizations of value more than rupees ten lakh or its equivalent in
foreign currency.
The amended Rule 6 provides that the records referred to in rule 3 should be
maintained for a period of ten years from the date of transactions between the
client and the banking company/financial institution.
A proviso has been inserted in sub-rule (3) of Rule 8, which requires that banks
/financial institutions and its employees should keep the fact of furnishing
suspicious transaction information strictly confidential.
Rule 9, now requires banks/financial institutions to verify identity of the
non-account based customer while carrying out transaction of an amount equal to
or exceeding rupees fifty thousand, whether conducted as a single transaction or
several transactions that appear to be connected.
The amended sub-rule (1) of Rule 9, in terms of clause (b) (ii) requires
verification of identity of the customer for all international money transfer
operations.
Proviso to Rule 9 (1) regarding the verification of identity of the client
within a reasonable time after opening the account/execution of the transaction
has been deleted.
- Accordingly, in view of amendments to the above Rules, banks / financial
institutions are required to :
Maintain proper record of all transactions involving receipts by non- profit
organizations of value more than rupees ten lakh or its equivalent in foreign
currency and to forward a report to FIU-IND of all such transactions in the
prescribed format every month by the 15th of the succeeding month.
In case of transactions carried out by a non-account based customer, that is a
walk-in customer, where the amount of transaction is equal to or exceeds rupees
fifty thousand, whether conducted as a single transaction or several
transactions that appear to be connected, the customer's identity and address
should be verified. Further, if a bank has reason to believe that a customer is
intentionally structuring a transaction into a series of transactions below the
threshold of Rs.50,000/- the bank should verify identity and address of the
customer and also consider filing a suspicious transaction report (STR) to
FIU-IND.
- Banks/ financial institutions are advised to strictly follow the amended
provisions of PMLA Rules and ensure meticulous compliance to these Rules.
Yours faithfully,
(Vinay Baijal)
Chief General Manager
Encl: As above