RBI/ 2010-11/346
DBOD. AML. BC. No.70/14 .01.001/2010-11
December 30, 2010
The Chairmen/CEOs of all Scheduled Commercial Banks (excluding RRBs)
/ All India Financial Institutions/Local Area Banks
Dear Sir,
Know Your Customer (KYC) norms / Anti-Money
Laundering (AML) standards/ Combating of Financing of Terrorism (CFT)/Obligation
of banks under PMLA, 2002
Please refer to our Master Circular DBOD.AML.BC.No.2/ 14.01.001 / 2010 -11
dated July 01, 2010 on Know Your Customer (KYC) norms /Anti-Money Laundering
(AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks
under PMLA, 2002.
- In terms of Para 2.3 (c) of the aforesaid Master Circular, banks
are required to apply enhanced due diligence measures on higher risk
customers. Some illustrative examples of customers requiring higher due
diligence have also been given in the paragraph under reference. It is
further advised that in view of the risks involved in cash intensive
businesses, accounts of bullion dealers (including sub-dealers) & jewellers
should also be categorised by banks as ‘high risk’ requiring enhanced due
diligence.
- Accordingly, in terms of paragraph 2.8 (a) of the Master Circular cited
above, banks are also required to subject these ' high risk accounts ' to
intensified transaction monitoring. High risk associated with such accounts
should be taken into account by banks to identify suspicious transactions
for filing Suspicious Transaction Reports (STRs) to FIU-IND.
- These guidelines are issued under Section 35A of the Banking Regulation
Act, 1949 read with 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 the
relevant Act/Rules.
Yours faithfully,
(Vinay Baijal)
Chief General Manager