Know Your Customer (KYC) norms /Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002
Please refer to our Master Circular UBD.BPD. (PCB) MC.No.16/12.05.001/2012-13 dated July 2, 2012 on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT)/Obligations of banks under PMLA, 2002. The KYC guidelines were formulated to protect the financial system against threat of money laundering/terror financing and frauds. However, it has been brought to the notice of Reserve Bank that some of the provisions made in this regard or their implementation by banks have led to avoidable inconvenience to public and also hindered the efforts at financial inclusion.
2. In this connection, we invite your attention to paragraph 101 (extract enclosed) of the Second Quarter Review of Monetary Policy 2012-13 announced on October 30, 2012, proposing to review the existing KYC norms for simplifying them within the provisions of PML Act/Rules and international standards. Accordingly, it has been decided to effect the following modifications in the existing provisions:
(i) Opening of new accounts – Proof of identity and address
An indicative list of the nature and type of documents/ information that may be relied upon for customer identification is given in Annex I of the aforesaid Master Circular. Paragraphs 2.4 (d) and (e) of the Master Circular clearly state that the said list is only indicative and not exhaustive.
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