Critically examine both demerits and merits of imposing kyc norms. Gk, general studies, optional notes for upsc, ias, banking, civil services. Individual customers, bank will obtain the customers identity information, address and recent photograph. Policies and procedures manual for the prevention of money laundering and terrorist financing. Letter issued by the uidai is accepted as an officially valid document for opening all types of bank accounts.
The know your customer rule 2090 essentially states that every brokerdealer should use reasonable effort when opening and maintaining client accounts. Master circular on know your customer kyc standards. Customer kyc and antimoney laundering as per rbi guidelines. Know your customer kyc norms and anti money laundering aml. June 30, 2011 on know your customer kyc norms antimoney laundering aml standardscombating of financing of terrorism cftobligation of banks under pmla, 2002. Kyc know your customer slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
Know your customer kyc is a bank regulation that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant info. Reserve bank of india has advised banks to make the know your customer kyc procedures mandatory while opening and operating the accounts and has issued the kyc guidelines under section 35 a of the banking regulation act, 1949. Kyc processes are also employed by companies of all. Under new operating guidelines, the reserve bank of india rbi has issued a letter to indias payments banks, toughening the regulations around the kyc or know your customer process.
Guidelines on know your customer norms and anti money laundering services the company is mainly engaged in investment activities directly in equities, government securities, debt instrument and other financial securities, as well as through mutual funds. Know your customer kyc norms and anti money laundering aml 1. Master circular on know your customer kyc master circular on know your customer kyc normsantimoney laundering aml standardscombating financing of terrorism cftobligation of banks and financial institutions under prevention of money laundering act, pmla, 2002. As part of know your customer kyc principle, rbi has issued several guidelines relating to identification of depositors and advised the. The key theme in this article is that the cardinal principle in any financial investigation is follow the money trail and in this respect, having reliable, accurate.
Relief for financial firms as rbi allows video kyc 10 jan, 2020, 07. Know your customer kyc information for customers intending to open bank accounts with us as per the prevention of money laundering act, 2002 and the rules mentioned therein, every banking company, financial institution and intermediary, as the case may be, are required to, at. Policy guidelines on know your customer norms and antimoney laundering measures table of contents sr. Kyc is an acronym for know your customer, a term used for customer identification process. Know your customer procedures for existing customers.
This ppt talk about need and implication of know your customers norms in indian banking sector. Know your customer what is kyc, its requirements and. Effective kyc involves knowing a customers identity, their financial activities and the risk they pose. In order to arrest money laundering, where banks are mostly used in the process, it is imperative that they know their customers well. If the aml laws and or regulations became effective in the last 2 years, what were the requirements of. Know your customer procedures for existing customers banks are expected to have adopted due diligence and appropriate kyc norms at the time of opening of accounts in respect of existing customers in terms of our extant instructions referred to in the annexure. The policy was based on the then prevailing guidelines issued by rbi. Please rollover map to select your region then click to select country of choice antimoney laundering recordbreaking fines issued by regulators worldwide, notably in the us and uk, dominated the financial services landscape in 2012.
Policy guidelines on know your customer norms and anti money laundering measures purpose this policy document gives an overview on the standards issued by the reserve bank of india rbi on the know your customer and anti money laundering for nonbanking financial companies thereby setting. Oocl customer advisory for know your customer kyc norms. The term can also refer to the bank regulations and antimoney laundering regulations that govern these activities. Icici banks kyc procedure specifies certain commonly available documents as. The know your customer or know your client kyc guidelines in financial services requires that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship.
Contents 1 preamble 2 definition of money laundering 3 obligations under prevention of money laundering pml act 2002 4 policy objectives 5 scope 6 client acceptance procedure client identification process. Category individualproprietary firm company trustsfoundations partnership firm 2. Read this article to know all about kyc documents, kyc process, kyc benefits, kyc requirements, kyc. Further, specified information under the pmla about the cash and suspicious transactions need to be submitted to the financial intelligence unit, india fiuind. Know your customer guidelines, wherein certain personal information of the. The branches were earlier advised to subject all the oldexisting accounts to kyc norms.
Know your customer kyc procedures are a critical function to assess customer risk and a legal requirement to comply with antimoney laundering aml laws. However, the company endeavors to frame a proper policy framework on know your. The objective of kycamlcft guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. In terms of the provisions of prevention of moneylaundering act, 2002 and the prevention of moneylaundering maintenance of records rules, 2005 regulated, entities res are required to follow certain customer identification procedurewhile s. This master circular is a consolidation of the instructions on know your customer kyc norms antimoney laundering aml.
In addition, draft financial institutions agent banking regulations are expected to be finalized and issued in the near future. Purpose banks and financial institutions fis have been advised to. The reason why proper kyc norms can help is that if a particular customer or entity is in the red list or the black list being monitored, they can help spot and track transactions made by these entities. Policy on know your customer kyc norms and antimoney. Fields marked with are mandatoryto be filled in black ink with block for instructions to fill form please see overleaf 1 personal details. Failure would attract levy of penalty and if penalty has been levied the same is to be disclosed in the notes to accounts. Master circular on know your customer kyc master circular on know your customer kyc norms antimoney laundering aml standardscombating financing of terrorism cftobligation of banks and financial institutions under prevention of money laundering act, pmla, 2002. What is kyc what is kyc process where is kyc needed and why what documents are needed for kyc or. Master direction know your customer kyc direction, 2016. Central kyc records registry ckycr means the company, to receive, store, safeguard and retrieve the kyc records in digital form of a customer. Introduction now your customer kyc is the due diligence and bank.
The importance of kyc know your customer norms and. It is a process by which banks obtain information about the identity and address of the customers. Mrs ms first name middle name last name b gas consumer number c date. This article discusses the importance of proper kyc know your customer norms and procedures in view of the increasing instances of banks around the world engaging in money laundering and other activities. Qcb asks banks to strengthen kyc norms to fight financial. The regulations require the banks to know their customers popularly known as the know your customer or kyc regulations and to monitor their transactions. Know your customer or kyc norms is a process by which banks get information about the identity of their customers. Know your customer kyc norms antimoney laundering aml standards combating of financing of terrorism primary urban cooperative banks ucbs have been advised vide our circular ubd. Guidelines on know your customer norms and cash transactions. The know your customer or know your client kyc guidelines in financial services requires that professionals make an effort to verify the identity, suitability, and. Policy guidelines on know your customer norms and anti. This means that proper identification of customers lead to better compliance and better monitoring. Bank has issued detailed guidelines on know your customer norms kyc and antimoney laundering standards aml. Any contravention of the same will attract penalties under the relevant provisions of the act.
Kyc norms free download as powerpoint presentation. Form kyc version know your customerkyc form letters. In terms of the provisions of prevention of moneylaundering act, 2002 and the prevention of moneylaundering maintenance of records rules, 2005, regulated entities res are required to follow certain customer identification procedure while undertaking a. Know your customer what is kyc, its requirements and benefits. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds, the nature of customers. If you continue browsing the site, you agree to the use of cookies on this website. The reserve bank of india had introduced kyc norms for all banks in 2002 and has been improving on them ever since. Rbi has issued instructions to all banks to implement without fail certain procedural norms on kyc. Know your customer norms letter issued by unique identification authority of india uidai containing details of name, address and aadhaar number. It involves making reasonable efforts to determine true identity. The qatar central bank qcb has asked banks and financial institutions to strengthen their kyc knowyourcustomer norms as part of due diligence to combat all kinds of financial crimes. Importance of kyc kyc is the means of identifying and verifying the identity of the customer through independent and reliance source of documents, data or information. Applicability a the provisions of these directions shall apply to every entity regulated by.
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