RBI/2009-10/362
DBOD.AML.BC.No.80/14.01.001/2009-10
March 26, 2010
The Chairmen and Chief Executive Officers
All Scheduled Commercial Banks excluding RRBs/
All India Financial Institutions/Local Area Banks
Dear Sir,
Know your Customer (KYC) guidelines - accounts of proprietary concerns
A reference is invited to Para 2.4(a) of the Master Circular on
KYC/AML/CFT/Obligation of banks under Prevention of Money laundering Act (PMLA),
2002 issued to banks vide DBOD.AML.BC.No.2/14.01.001/2009-10 dated July 1, 2009.
It has been advised to banks that internal guidelines for customer
identification procedure of legal entities may be framed by them based on their
experience of dealing with such entities, normal bankers’ prudence and the legal
requirements as per established practices. If the bank decides to accept such
accounts in terms of the Customer Acceptance Policy, the bank should take
reasonable measures to identify the beneficial owner(s) and verify his/her/their
identity in a manner so that it is satisfied that it knows who the beneficial
owner(s) is/are
2. For sake of clarity, in case of accounts of proprietorship concerns, it has
been decided to lay down criteria for the customer identification procedure for
account opening by proprietary concerns. Accordingly, apart from following the
extant guidelines on customer identification procedure as applicable to the
proprietor, banks / financial institutions should call for and verify the
following documents before opening of accounts in the name of a proprietary
concern:
i) Proof of the name, address and activity of the concern, like registration
certificate (in the case of a registered concern), certificate/licence issued by
the Municipal authorities under Shop & Establishment Act, sales and income tax
returns, CST/VAT certificate, certificate/registration document issued by Sales
Tax/Service Tax/Professional Tax authorities, Licence issued by the Registering
authority like Certificate of Practice issued by Institute of Chartered
Accountants of India, Institute of Cost Accountants of India, Institute of
Company Secretaries of India, Indian Medical Council, Food and Drug Control
Authorities, etc.
ii) Any two of the above documents would suffice. These documents should be in
the name of the proprietary concern.
4. These guidelines will apply to all new customers, while in case of accounts
of existing customers, the above formalities should be completed in a time bound
manner and should be completed before December 31, 2010.
5. Please acknowledge receipt.
Yours faithfully,
(Vinay Baijal)
Chief General Manager