KYC/AMUCFT POLICY -, 2016

Compliance [lepartnrent
Head office

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 Preamble

we present a policy document in respect of KYC/AMUCFT guidelines for our Bank. lt

has been re-formulated / prepared by adopting ingredients contained in RBI Master
Direction, 20'16 on Know Your Customer (KYC) Guidelines. The policy framework
covers comprehensively KYC Standards and AML measures, guidelines t
recommendations made by FATF and provisions / enactments of prevention of Money
Laundering Act 2002 and its subsequent amendments. lnitially the Kyc-AML policy
document was formulated and adopted by our Bank as per Board approval dated
24.05.2005. Thereafter the policy has been renewed from time to time by amending the
guidelines issued by the regulators. The policy expounds in detail the procedure
towards customer due diligence at the time of on-boarding of customer and
subsequently during the course of operations in the account. lt includes Four key
elements 1) customer Acceptance procedure 2) Risk Management / categorisation of
customers 3) customer ldentification procedure and 4) Monitoring of rransactions. The
formulae under the policy shall provide continued guidance and safeguards to all our
staff at various levels in Branches as well as in Administrative Offices during the course
of establishing client relationship, facilitating operations in the account and providing
effective customer service. The policy defines Three Lines of Defence while
implementing KYC-AML guidelines, these shall be helpful in strengthening the
procedures at operational level and shall provide tools for ensuring
enough robustness
to the entire mechanism at Bank level.

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 lndex
Pt. No. Particulars Page No,
1 ob ective 4
2 S e 4
3 obti ations under Prevention of Mon Launderi 2002 PML Act 5
4 Major changes effected in PML Act, 2OO2, to implement Financial Action 6

rr Taskforce FATF recommendations

FINANCIAL INTELLIGENCE UNIT - INDIA
Oefinitions
I
I
E
r KYC Norms / Guidelines / Directions 11

r
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Combalin Financl of Terrorism CF
Mone Launderi
General
11
12
13
Iil
rrEI Customer Acce
Risk Mana ement
ce Poli

Customer ldentifi cation Procedures ctP

15
16

W
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Customer and CDD/EDD
Monitorin of Transactions
21
25
37
16. Maintenance and preservation of Records of Transactions/ Preservation of 40
lnformation
17. Wire Transfers 42
18. c red it De bit I Sm art I G ift c ards M ob le Wa ell Net B a n ki n gl M o b 44
B a n k ng RTGS/ N E FTI E c s/ M P S De m a Services,/ E KYc M oney
La u n d e I n T h rea ts tro m n ew ech n o
19.
20.
21
R

R ts
rtin
obr ations and Shari of lnformation
CDD Procedure and sharing KyC inform ation with Central KYC Records
CKYCR
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49

22 Reporting requirement under Foreign Account Tax Complianee Act 50

FATCA and Common Re ortin Standards CRS
23. Freezing of Assets U n d er Sectio n 5 ,| A of U n a Mu Act iti ES ( P reve n tio n
) 50
Act, 1967 U A PA
24 Juri sdictions that do not or insufficientl a FATF Recommendations 51
25. Corres ndent Bankin & Corres ndent Relationshi with'Shell Bank" 51
26 KYc .AM L C om ran ce At Fore n c en te rS
52
27 Period for sentin ent instruments 53
28 Collection of Account P eCh ues 53
29 Customer Education/Em 's traini Hiri of Em 53
30. Annexures
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1. Obiective

The objective of the Policy is:

(a) To enable the Bank to know/understand the customers and their financial
dealings better, thereby helping us to manage the risks prudentially,
(b) To prevent the Bank from being used, intentionally or unintentionally, by criminal
elements for money laundering or terrorist financing activities,
(c) To put in place a proper control mechanism for detecting and reporting of
suspicious transactions in accordance with the statutory and regulatory
provisions,
(d) To ensure that all the provisions of Prevention of Money Laundering Act, 2002
and the Rules made there under and all subsequent amendments thereto are
duly complied with, and
(e) To ensure compliance with guidelines/inshuctions issued by the regulators,
including FIU-lND and RBt.

2. Scope
Applicability,

(a) RBI Master Directions (KYc) 2016, (dated 25.02.2016) its provisions contained
therein and adopted by our Bank, applies to our Bank being the entity regulated
by RBI by granting us license under section 22 of Banking Reguration Act 1949.

(b) The KYC/AML directions / standards prescribed by RBI shall also apply to all our
overseas establishments i.e. all our branches at foreign centers, representative
offlces, majority owned subsidiaries located abroad. However, laws and
regulations prevalent in any host country or RBI Directions, the stringent of the
two shall be applied.

(c) KYC / AML rules shall not apply on "small Accounts' defined under section
23 of
RBI Master Direction 2016.

(d) obligations under Prevention of Money Laundering Acl,2oo2 (pML

Act) and its
amendmenls having taken prace from time to time which are obrigatory on every
banking company, financial institution and intermediary.
 Accordingly,

RBI regulations on KYC norms and Anti Money Laundering standards are
applicable to all domestic banks and their foreign branches to the extent that
local laws and regulations of foreign host countries permit. ln case RBI
prescribed KYC norms/KYC standards are at variance with those of host country
regulators, the more stringent rules and regulation of the two should be adopted
by the overseas branches and majority owned subsidiaries.

This policy is applicable to all branches of the bank and its banking/financial
subsidiaries as well as the Depository Participant Offices of the Bank. Branches
should keep in mind that the information collected for the purpose of opening of
account is to be kept as confidential and details thereof are not to be divulged for
cross-selling or any olher purposes. lnformation sought should be relevant to the
perceived risk and should not be intrusive. Any other information from the
customer should be sought separately with his/her consent only after opening of
the account. Banks should ensure that provisions of Foreign Contribution
Regulation Act, 2010, wherever applicable, are strictly adhered to.

3. Obligations under Prevention of Money Laundering Act, 2002 (pML

Act) include:

(a) Appointment of a Principal Officer and Designated Director;

(b) Maintaining records of prescribed transactions;
(c) Furnishing information of prescribed transactions to the specified authority;
(d) verifying and maintaining records of the identity of its clients and shall include
updated records / data pertaining to identification, account files and business
correspondence;
(e) Preserving records in respect of (b) and (c) above for a period of at least five
vears from the date of each such transaction between the Bank and the client;
(f) Preserving records in respect of (d) above for a period of at least five years
after the business relationship is ended or the account closed, whichever is
later;

Princioal Officer:

Bank is needed to appoint a senior management official as principal ofilcer and

he/she must be able to act independenfly and report direcfly to the senior
management or to the Board of Directors and

Should be located at the Head Office and shall be responsible for monitoring
and reporting of all transactio of informition as required under the
law. He / she shall mainta the enforcement agencies, banks
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 and any other institution which are involved in the fight against money
laundering and combating financing of terrorism,
shall be responsible for overseeing and ensuring overall compliance with
regulatory guidelines on KYC/AMUCFT issued from time to time and obligations
under the Prevention of Money Laundering Acl,2OO2 and its amendments, rules
and regulations made therein,
shall be responsible for timely submission of Cash Transaction Repod (CTR),
Suspicious Transaction Report (STR), Counterfeit Currency Report (CCR), Non-
Profit Organization Transaction Report (NPOTR) and Cross Border Wire
Transfer (CBWT) report, to the FIU-IND,
The staff working with him / her should have timely access to customer
identification data and other customer due diligence information, transaction
records and other relevant information for timely reporting to the regulators.

Desionated Di rector:

The bank is needed to designate a Director to ensure over all compliance of

obligations imposed under PML Act and Rules. ln our bank Executive Director has
been appointed by Board as Designated Director.

4. Maior chano es effected in PML Act. 2002. to imolem ent Financial

Action Tas kforce (FATFI recomme ndations

The Prevention of Money Laundering (Amendment) Act, 2012 as passed by Lok

sabha on 29.11.2012, has come into force w.e.f. 1sh February 2013. lt lists various
measures required to conform to FATF standards and are in line with FATF
recommendations. The Amendment was notified in the month of August 2013. The
important provisions of the Act are as enumerated below:

(a) Reporting entity has to identify 'Beneficial ownef (Natural person who derives
and controls the account over the juridical person);

(b) Making money laundering a standalone offence as it will allow adjudicating

authority to attach properties even if the predicate offence is not proved;

(c) Definition of the definition of offence of money laundering has been expanded
by including t herein the act of concealment. ac ouisition DOSSeS sion and us e
of proceeds of crime within the provisions of offence of money laundering
(Section 3 of PML Act);

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(d) Part A and Part B of the Schedule to the Act have been combined so that the
provision of monetary threshold for crimes stipulated earlier (above Rs. 30 lakhs
or more) has been dispensed with and now no monetary threshold for money
laundering exits;

(e) lt empowers the Director of FIU-IND to call for records of transactions or any
additional information that may be required for the purpose of prevention of
money laundering and also to make enquiries for non-compliance of reporting
obli!ations cast upon reporting entities;

(f) Providing for attachment and confiscation of the proceeds of crime even if there
is no conviction, so long as it is proved that offence of money laundering has
taken place and property in question is involved in money laundering;

(g) The amendment spells out new definition of beneficial owner, client &
corresponding law; it also lists persons carrying on designated business or
professions, dealers in precious metals, precious stones & other high value
goods, real estate agents, persons engaged in safekeeping and adminishation of
cash and liquid securities on behalf of other persons! persons carrying on such
other activities as the Central Govt. may by a notification, so designate, from time
to time, as reporting entities;

(h) Scope of attaching property involved in money laundering simplified;

(i) Bank employees are protected by law from criminal and civil liability for breach of
disclosure of information even if they did not know precisely what the underlying
criminal activity was regardless of whether illegal activity actually occurred;

O The Director of FIU- IND is empowered to ask for information on all records of
transactions, records of documents, evidencing identity of client and beneficial
owners and if he desires, may get audited by an accountant from amongst a
panel of accountants, maintained by Central Government, forthis purpose;

(k) Meaning of the word 'transaction' is considerably widened to address all kinds of
reporting entities. Transaction means Durcha se. sa/e. loan. pledoe. oift. transfer.
deli or the a noement th ereof includin oDenlno of accounts. deposlfs.
withdraw als. exchanoe transfer of funds in whatever cutrencv. whether in cash
or bv cheoue. nav order or oth er instrumen or bv electronic or other non-
sa box or form safe
into fiduci sh an ved in
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of a es or includin uch activi
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 assoc/afed with casino and establishino or creatino a leoal oerson or leoal
arranoement:

(l) The Director of FIU-IND is vested with the power to impose penalty not only on
reporting entities but also on the Designated Director of the Board or any other
employee of the financial institution;

(m)The amended Act has defined SIX officially valid documents (OVDs) for
identification and address proof towards complying KYC norms -
(i) Passport,
(ii) Driving License,
(iii) PAN Card,
(iv) Voters lD,
(v) Job card issued by NREGA duly signed by an officer of the State
Government,
(vi) Aadhaar card and any document notified by the Central Govt. in
consultation with Regulator;

(n) Simplified KYC norms

For the applicants / customers employed in Government Departments, Statutory /

Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial
Banks and Public Financial lnstitutions Simplified KyC norm have been
introduced. These customers' accounts are categorized as LOW RISK and
following documents may be oblained for verifoing the identity of the clients and
shall be deemed officially valid documents (OVD):

(i) ldentity card with applicants photograph issued by the Central/State

Government Departments, Statutory/Regulatory Authorities,
(ii) Letter issued by a Gazetted officer, with a duly attested photograph of the
person.

(o) AII cross border wire transfers (CBWT) of value more than rupees five lakh or its
equivalent in foreign currency where either the origin or destination of funds is in
lndia, need to be reported in prescribed format to FIU-IND, in addition to CTR
STR, NPOTR, CCR.

(p) All records pertaining to accounts, documents, files, transactions and information
on actual or attempted transaction for both domestic and international
establishments have to be r five vears and bank has to comply
swiftly with the information tors / competent authorities.
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5. FINANCIAL INTELLI GENCE UNIT - INDIA

FIU-IND is a central agency; it is an independent body and rqports directly to the

Economic lntelligence Council headed by the Finance Minister.

(a) lts functions are to act as the central reception point for receiving CTR, STR,
CCR, NPOTR and Cross Border Wire Transfer (CBWT) reports. lt analyzes
information rec€ived from banks to uncover pattern of transactions suggesting
sudpicion of money laundering and related crime.
(b) lt disseminates the information to appropriate national / international authorities
to support anti- money laundering efforts.
(c) lt monitors and identifies strategic key areas on money laundering trends,
typologles and developments.
(d) Director of FIU-IND is vested with the powers of a civil court under the code of
Civil Procedure, 1908, accordingly has the power to seize, direct, penalize
reporting entities and its employees for breach or violation of pML Act.

6. Definitions
As per RBI Master Direction 2016 various 'terms' have been defined with
meaning assigned to them. These 'Terms' are given below, and details of the same
are given vide Annexure 1 - Definitions

(a) Terms bearing meaning assigned in Prevention of Money Laundering Act 2OO2
and the Prevention of Money Laundering ( Maintenance of Records) Rules 2005
(i) Act and Rules
(ii) Beneficial owner ( BO)
1. Customer acceptance
- Controllingownership
- control
2. customer - partnership firms
3. customer - an unincorporated association or body of individual
4. customer- a trust
(iii) Central KYC Records Registry ( CKYCR)
(iv) Designated Director - a person designated by RE under section rv of pML
Act
1. The Managing Director or a whole time director
2. The Managing partner
3. The Proprietor
4- The Managing Tru
5. A person or ind incorporated association
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Designated Director in respect of Cooperative Banks and RRBs
(v) Non-Profit organizations NPO
(vi) OVD - Officially Valid Documents
1 . Customer applicable to be identified under 'Simplified Measures'
-- for ldentity
2. For address - proof for limited purpose, additional documents to be
deemed as OVD
. 3. Documents containing address - Pension or ppOs, Retired
. Government employee, letter of Allotment issued by Employer etc.

(vii)"person' meaning as per PML Act

(viii)Principal Officer
(ix) Suspicious Transaction -deflnition
(x) Suspicious Transaction - meaning
(b) Terms bearing meaning assigned as per Master Direction (KyC) 2016
(i) Common Reporting Standards (CRS)
(ii) Customer
(iii) Wdk in Customer
(iv) Customer Due Diligence
(v) Customerldentification
(vi) FATCA
(vii) IGA
(viii) KYC Templates
(ix) Non Face to Face customers
(x) On-going Due Diligence
(xi) Periodic updation
(xii) Politically Exposed persons (pEps)
(xiii) Regulated Entities (REs)
1 . All scheduled commerciar banks/ any other entity ricenced under
section 22 of Banking Regulation Act 1949
2. All Financial lnstitutions
3. All NBFCs, MNBCs, pSps, Sps ppt tssuers
(xiv) Simplified Procedure
(xv) Shell Bank
(xvi) Wire transfer
(xvii) Domestic and cross-border wire transfer

(c) Any other term / expression unless defined vide annexure .1, shall
have the same
meaning as assigned in Bankin Regulation act, Prevention of Money
Laundering Act and /or any h is relevant and referred to as per
need.
7. KYG Norms / Guidelines / Directions

Know your customer is the most important aspect in terms of legislative

requirements. lt refers to as front- loading our relationship with. customer and it is
helpful in avoiding many problems which may come across at later date.

Knowing a customer is not just simply obtaining a copy of OVD. It is about the
understanding the normal life and business practice of the customer, by developing /
having. this knowledge about the customer we shall be able to recognize the clues/
signals which will make us aware of any suspicious activity that may be occurring.

ln general terms, KYC is:

. Making every reasonable effort to determine the true identity and
beneficial ownership of accounts
. Knowing the source offunds
r Knowing the correct location, address and nature of customer,s business
. Knowing what constitutes reasonable account activity
r Knowing who are your CUSTOMERS' CUSTOMER

KYC norms, guidelines and directions for various banking activities have been
enumerated in the policy in different para with details for meeting the requirement at
functionary level and ensuring effective implementation.

8. Comba tinq Financin q of Terrorism (CFT)

Banks are required to check names / credentials of accountholder new as well as

existing as these do not appear in the list of terrorist individuals /organizations
banned by the United Nations' security council sanctions committee as circulated
by the RBI from time to time i.e.

(a) "Al'Qaida sanctions List"- This rist incrudes onry the names of those
individuals, groups, undertakings and entities associated with the Al-eaida. The
updated Al-Qaida list is available at
htto ://www.un- oro/sc/com ittees/1267laq sanctlo ns list.shtml.

(b) "1988 Sanctions List" This list consists of names of individuals, groups,
undertaki ngs and entities those are associated with the Taliban. The updated list
is availa ble at httD ://www.un.o committees/1988/l ist.shtml.

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 9. Monev La underinq:

(a) Definition

As defined vide Section 3 of PML Act 2002 and further expanded (given vide
Point 4. (c) above, it defines the "offence of money laundering' as under:

'Whosoever directly or indirectly attempts to indulge or knowingly assists or

knowingly is a party or is actually involved in any process or activity connected
with the proceeds of crime includino its co ncealment, oossession.
acquisition or use and projecting it as untainted property shall be guilty of the
offence of money laundering".

ln lndia AML activities are monitored by FIU-IND as per the provision of pML Act.
Money laundering refers to any transaction that aims at concealing and/or
changing the identity of criminal proceeds so that it appears to have been derived
from legitimate sources.

(b) "Proceeds of Crime" (as per section 2 of PML Act)

means any property derived or obtained directly or indirecfly by any person as a

result of criminal activities. Money launderers use the banking system for
cleansing 'dirty money' obtained from criminal activities with the objective of
hiding/disguising its source.

(c) The process of money laundering

It has been identified as being done generally in three stages and it involves
creating a web of financial transactions so as to hide the origin and true nature of
these funds. The three stages of money laundering are:

(i) 'Placement' (i.e. introduction of the funds into the banking system)
(ii) 'Layering' (i.e. creating a web of transactions and rotating the funds
between various accounts so as to hide / extinguish its true source), and
(iii) 'lntegration' (i.e. after rotating the funds, the money, now ,washed,
appears to have legitimate source).

(d) Risk Perceotion

Bank is exposed to the following risks which arise out of Mon ey Laundering
activities:
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 a Reputation Risk
Risk of loss due to severe impact on bank's reputation which is the most
valuable asset of the organization;
Compliance Risk
Risk of loss due to failure to comply with key regulations governing the Bank's
operations;
a Operational Risk
flisk of loss resulting from inadequate or failed internal processes, people and
systems, or from external events;
Legal Risk
Risk of loss due to any legal action the Bank or its staff may face due to
failure to comply with the law resulting in, adverse judgments, unenforceable
contracts, fines and penalties generating losses, increased expenses for an
institution or even closure of such institution;

10. General

The KYC / AML / CFT policy shall be placed before the RCOM for the clearance
and then shall be placed before the Board for approval / adoption. The policy entails
the procedure towards customer due diligence / enhanced due diligence while
maintaining customer relationship and providing them various banking channels as
per the requirements. lt includes Four major key elements-

(a) Customer Acceptance Procedure

(b) Risk Management / Categorisation of Customer
(c) Customer ldentification Procedure and
(d) Monitoring of Transactions.

The guidelines / directions under the policy shall provide continued guidance and
safeguards to all our staff at various levels in Branches as well as in Administrative
Offices during the course of client relationship and ensuring effective customer
service.
The policy defines Three Lines of Defence while implementing KYC-AML
guidelines, these shall be helpful in strengthening the procedures at operational level
and shall provide tools for ensuring enough robustness to the entire mechanism at
Bank level.

Firct Line of Defence:

The policy shall provide the rele uidelin es and directions from regulators to
front line staff at all our bra ith the customers at the time of on
boarding and at subseque s rlE +d-6
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Training through Bank's Staff Training Colleges is being imparted on regular
basis. Full day workshops are organized at Zonal Offices / NBG offices to
sensitize staff members.

E- Learning modules through HRMS have been prepared / introduced for

increasing awareness level

A sinall booklet namely 'Guidance Notes for Staf in respect of KYC / AML/ CFT
has been prepared by Compliance Department, Head Office and circulated
amongst all staff to increase the awareness level of on the subject as well as act
as a Ready Reckoner.

-Second Line of Defence:

The administrative and supervisory lines in the branches and controlling offices
shall provide necessary support and ensure putting necessary conhol
mechanisms,

Third Lin e of Defence:

The compliance shall be ensured through:

(a) Allocation of responsibility for effective implementation of policies and

procedures,
(b) lnternal / concurrent audit system to verify the compliance with KyC/AML
policies and procedures,
(c) Test check on half yearly basis by the officials from other branch / ofiice,
(d) Procedure has been implemented to deploy Decoy Customers on half
yearly basis in selected branches on rotation basis,
(e) Submission of Compliance in respect of KyC / AML / CFT rules in the
form of templates on monthry basis by the branches to their Zonal offices
for onward submission to Head Office,
(f) Submission of quarterly audit notes and compliance to the. Audit
Committee.

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11. Customer Acc eotance Policv

ln terms of RBI guidelines, the Customer Acceptance Policy (CAP) is one of four
parameters which broadly defines the KYC/AMUCFT guidelines..The CAP has been
framed ensuring compliance with all regulatory guidelines while establishing
customer relationship and maintaining the related accounts as per profile of the
customers, the details as under:-
(a) No iccount shall be opened in anonymous/fictitious/benami name/s,
(b) All the accounts shall be opened with applying appropriate Customer Due
Diligence measures given in detail vide Point 14. No accounts shall be opened
where Bank is not able apply CDD measures either due to non-cooperation of
the customer or non-reliability of the KYC documents /information furnished by
the customer / applicant,
(c) All customers new as well as existing will be classified into risk categories based
on the risk perception i.e. Low, Medium and High. The risk perception and its
management has been defined in detail under Point 12,
(d) "Beneficial Owne/ shall be identified / verified necessarily while opening /
marinating accounts having constitution as Partnership, Limited Companies,
Trust etc. Details for compliance are given vide Point 14.
(e) Before opening any account, it shall be ensured that the identity of the
prospective customer does not match with any person having known criminal
background or with banned entities such as individual terrorists or terrorist
organizations as advised by UN sanctions lists and RBI list being published from
time to time and has been available through FINACLE on real time basis,
(f) wherever accounts are opened and be operated by mandate holder or accounts
are opened by intermediaries in fiduciary capacities, it should be ensured that the
circumstances in which the said mandate holder or intermediary is permitted to
act on behalf of another person/entity are clearly spelt out, in conformity with the
established law and practice of banking.
(S) lryC procedure shall be followed during the periodic updation i.e. Re-KyC
exercise shall be carried out as per risk profile / category of the customers,
(h) Transaction based relationship shall be undertaken only after following the
desired CDD procedures,
(i) lnformation collected from the customer for the purpose of opening of ac,count is
to be treated as confidential and details thereof are not to be divulged for cross
selling or other purposes. lt should be ensured that the information sought from
the customers are relevant to the ived risk, are not intrusive and are in
conformity with the RBI gui n this regard. Any other information
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 from the customer should be sought separately with his/her consent after
opening the account.

O While applying Risk Based approach, the Bank can also close an existing
account in circumstances which are found non-compliant to KYC guidelines. The
procedure to close an account is given vide point 14 (e) (ii).

While adopting / implementing all above procedures, Bank shall ensure banking /
financidl facility shall be available with due care to the general public and specially
those who are financially or socially disadvantaged.

12. Risk Manaqement

ln terms of RBI directions and PML Acl 2002 requirements, A risk based
approach has been adopted by Bank for all type of customers to effectively address,
manage and mitigate the risks. .

(a) Risk Based Approach has been designed based on profile of the customer i.e.
occupation, the nature of business activity, location of the customer and his
clients, mode of payments, volume of turnover, social and financial status etc.. At
the stage of on-boarding of the customer information submitted by the customer
and verified as per the documents/ credentials, the risk categorization is done as
Low, Medium and High (indicative parameters for isk categorisation given in
more detail below). ln order to enable the branches to correctly classiff the.
customers' risk category, we have introduced a Customer Profile Sheet (CPS)
which is required to be obtained by the branches at the time of opening of.
accounts. Some of the indicative parameters for determining the profile and risk
category of a customer are:

(i) Constitution: lndividual, Proprietorship, Private/Public Ltd, Trust etc.

(ii) Business segment: Retail, Corporate, etc.
(iii) Country of residence/Nationality: lndia or any foreign country, lndian or
foreign national,
(iv) Product subscription: Salaried, Business income, NRI products, etc.,
(v) Economic profile: High net worth individuals etc.
(vi) Account status: Active, lnoperative, Dormant.
(vii) Volume of turnover, social and financial status, etc.
(viii) Politically Exposed Persons,
(ix) Geograp hical location within including the customer's clients)

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(b) Appropriate documents and other information shall be collected in respect of
different categories of customers depending on the perceived risk and keeping in
mind the requirements of the PML Act, 20O2 and amendments thereto as also
the instructions / guidelines issued by RBI from time to time. While considering
customer's identity, we shall make effort to opt for online confirmation about such
documents if issuing authorities have arranged for such provisions.

(c) Branches shall prepare a profile sheet namely Customer Profile Sheet (CPS) for
eaih new customer and identify the risk category based on above mentioned
parameters. The customer profile is a confidential document and details
contained therein shall not be divulged either to the customer or for cross selling /
any other purposes . The nature and extent of due dilioence will de pend on the
risk oerce ived bv the bank.

(d) The illustrative lists of Low, Medium and High Risk category customers primarily
based on occupation / business activity is given as under:

a) Low Risk

. salaried employees whose salary structures are well defined;

. people belonging to lower economic strata of society whose accounts
show small balances and low turnover;
. Government Departments and Government owned companies;
. Regulators, Statutory Bodies, etc.;
o Customers who are employment-based or with a regular source of
income from a known source which supports the activity being
undertaken;
. Pensioners, benefit recipients, persons whose income is from their
partner's employment;
o Customers with a long-term and active business relationship with the
bank;
. Customers other than those classified as High or Medium Risk,
. lndividuals (other than High Net Worth/NRl customer) and entities
whose identities and source of funds can be easily identified and
transactions in whose accounts by and large conform to the known
profile can be categorized as Low Risk.

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b) Medium Risk

. Non-Banking Finance Companies;

o Builders;
. Stock Brokerage;

c) Hiqh Risk cateoorv

o non-resident customers:
. high net worth individual;
. Trusts, charities, NGOs / NPOs (other than those promoted by United
Nations or its agencies);
. organizations receiving donations;
. companies having close family shareholding or beneficial ownership;
o firms with 'sleeping partners';
o Politically Exposed Persons of foreign origin including their relatives,
accounts where PEP is the ultimate beneficial owner;
o non-face to face customers;
. Customers with dubious reputation as per available public information,
o Client a/cs managed by professional service providers such as law firms,
Accountants, agents, brokers, fund managers, Trustees, custodians, etc.
o Customers based in high risk countries/jurisdictions and countries
by
identified FATF as having strategic deficiencies in compliance
of AMUCFT standards;
o lnvestment managemenVmoney management company/personal
lnvestment Company;
. lndividuals and entities specifically identified by Regulators, FIU and
other competent Authorities as 'High Risk';
o Cash-intensive businesses such as tolls, shopping malls, liquor stores,
petrol pumps / service stations etc.;
. Antique Dealers, Money Service Bureau, and Dealers in arms;
. Customers who may appear to be Multi-Level Marketing companies;
o Accounts of bullion dealers (including sub-dealers), jewelers, Religious
lnstitution:
o Accounts where STR had been filed with FIU IND earlier;
. Any other category, where the Bank decides to classify as High Risk
based on its risk perception;

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(e) Customers who are likely to pose a higher than average risk to the Bank should
be categorized as Medium or High Risk depending on the customers'
background, nature and location of activity, country of origin, sources of funds,
client profile, etc. ln such cases Enhanced /higher / intensive Due Diligence
(EDD) shall be applied. Zones /branches should therefore apply Enhanced Due
Diligence measures in case of higher risk customers, especially those for whom
the sources of funds are not clear. The key components for due diligence are
occupation, location, mode of payment, source of funds, volume and frequency
of ttirnover etc.

(f) Our bank has classified certain category of occupations as High Risk
mandatorily since on boarding, these are Jewelers, Bullion Dealers, Money
Changers, petrol pump/service station, liquor and wine dealers, NRI customers,
NGOs, Trusts as mandatorily high risk customer.

(g) Further, customers with occupations of Builders, Finance

& Stock Brokers are
categorized mandatorily under Medium Risk. Branches are advised to open
accounts of NRls in constitution code 82, NGOs in constitution code 55 and
Trusts in 56.

(h) Appropriate care shall be taken to ensure that the adoption of customer
acceptance policy and implementation of customer risk categorization do not
became too restrictive and do not result in denial of banking service to general
public, especially to those, who are financially or socially disadvantaged.

(i) The risk categorization of customers is reviewed half yearly, through a system
driven procedure cenhally in the Bank at Data center level. Monitoring of
transactions is one the measure parameters for the Risk Based Approach. As a
measure, we have identified additional lines of occupations of customers.
specific codes have been assigned for the newly identified occupations and they
have been uploaded into the Finacle system to /
identifo link the
occupation/activity of the customer with the nature, value and volume of
transactions as well as turnover in the account. Based on general perception and
market study, we have also put threshold limits for all the occupations i.e the
credit turnover in an account during twelve months. Branches have been
instructed to clearly specify / write occupation of the customer in the Account
opening Form and put in the system. rn terms of the present guidelines of RBr,
the risk categorization is to be reviewed every six months, accordingly the
process for half yearly review of orization has been devised as under:

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 1. A matrix has been prepared and put in the FINACLE system based on
various parameters towards risk categorization mentioned as above,
2. All accounts are scanned under this matrix on half yearly basis i.e. September
and March every year.
3. Risk categories are re-defined accordingly in the system and report is
available at Branch end for applying Re-KYC norms / procedures in identified
aerounts,
4. Periodicity has been fixed for these three Risk categories, as under:
Cateqorv Period
LOW Once in Ten Years
MEDIUM Once in Eight years
HIGH Once in Two Years

O We ensure that all the accounts shall always be KYC compliant and no exception
is permifted. lnstructions regarding all the statutory, regulatory and internal
guidelines are issued / reiterated form time to time. As and when additional
guidelines are received from the regulatory and statutory authorities, the same
are advised to all the Zones / Branches / Offices for implementation. Thus an
effective KYC/AMUCFT programme is already in force.

(k) A lot of emphasis has been given to make Risk Based Approach more effective,
steps in this regard have been initiated as under:
. Management oversight, systems and controls, have been ensured by way of
monthly / quarterly reporting,
. Specific responsibility to be given to ensure that the policy and procedures
are implemented;

(l) Effective implementation and control is ensured by the following measures:

1. A compendium of KYC/AMUCFT guidelines has been prepared at our end

incorporating up to date guidelines (CR-12 format) and circulated to all the
Zones/Branches. This is a comprehensive certificate in the form of templates
required to be submitted by the Branches every month to their respective
Zonal Office, certifying compliance of the guidelines. (Any non-adherence is
red to be indicated by them separately). Zones, in turn, are required to send
their consolidated certificate to us every month.

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 2. Cash Transaction Report (CTR) is generated and consolidated at Head Office
and submitted to the FIU-IND, Government of lndia, New Delhi every month
within the prescribed time limit. Thereafter, all the transactions captured in the
Report are segregated Zone wise / Branch wise, sent to the respective Zones
for onward transmission to the respective Branches. the Branches are
required to scrutinize the transactions and confirm to their Zonal Office that
they are genuine and in line with the business/activity of the customer and
that no money laundering is involved. Zonal Offlces, in turn, submit
consolidated certificate to Head Office. Transactions found to be suspicious in
'nature
are reported to Head Office in the STR format.

3. Suspicious Transaction Reports (STRs) are submitted to the FIU-IND, as and

when identified, within the prescribed time limit. An Anti Money Laundering
Package called AMLOCK has been installed at Head Office for generating
alerts to identifo suspicious transactions'

4. Counterfeit Currency Report (CCR) is submitted to the FIU-IND within the

prescribed time limit, as and when transaction involving counterfeit currency
note is identified.

5. Inspection & Audit:

Risk based lnternal Audit and Concurrent Audit check and verify the
application of KYC procedure at the branches and comment on the lapses
observed in this regard. The compliances in this regard is put up before the
Audit Committee of the Board on a quarterly basis'

13. Customer ldentification P rocedures I clP)

(a) customer identification implies identifying the customer and verifying his/her
identity by using reliable, independent source documents, data or information.
Bank has to be satisfied that a prospective customer is who he/she claims to be.
It is, therefore, necessary to obtain sufficient information to establish the identity
of each new customer, whether requla r or occasional , and the purpose of the
intended nature of banking relationship. Being satisfied implies the Bank must be
able to satisfy the competent authorities that'due diligence' was observed based
on the risk profile of the customer in compliance with the extant guidelines.
Besides risk perception, the nature of information/documents would also depend
on the type of customer whose account is to be opened.

(b) The nature of the documents would also depend on the type of customer i.e.
individual, corporate etc. For o are natural persons, the branches
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 shall obtain sufficient identification by obtaining self attested copy of one of the
SIX OVDs, to verify the
(i) identity and address of the customer
(ii) one recent photograph,
(iii) any other document pertaining to business or financial status i'e. Balance
sheet, income tax return etc.

For customers as legal persons or entities, the bank shall obtain / verify
throirgh documents

(i) the legal status of the legal person/entity

(ii) that any person purporting to act on behalf of the legal person/entity is so
authorised and verify the identity of that person.
(iii) understand the ownership and control structure of the customer and
determine, who is / are the natural person / s who ultimately controls the legal
person.

(c) The CIP shall be carried out while

(i) establishing a banking relationship,
(ii) carrying out a financial transaction (i.e. in the case of a 'walk in' customer or
when any transaction by a customer appears to be inconsistent with his / her
known profi le/turnover), or
(iii) the bank has a doubt about the authenticity / veracity of the previously
obtained customer identification data'

(d) whenever there is suspicion of money laundering or terrorist financing or when

other factors give rise to a belief that the customer does not, in fact, pose a low
risk, full scale customer Due Diligence (cDD) shall be ensured to be carried out
before opening an account.

(e) Besides risk perception, the nature of information/documents required for

identification would also depend on the type of customer. Customer identification
documents/information in respect of various types of customers is given in the
Annexure 2. We have also introduced in the Finacle system KYCDET menu,
which is mandatory for entering the type of documents obtained i.e. for identity
and address proof along with date of the OVD, all other documents pertaining to
legal entity. The date on which KYC documents were obtained is also put in the
system in order to have proper KYC standards & transparency. The KYC date
and KYC status (i.e. KYC 'Y' or 'N') are automatically filled in as soon as address
and identity field are entered. ln the system no account can be opened without
visiting KYCDET menu. unt can be e

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 For capturing all the relevant details of legal entities, KYCDET menu is being
further revamped.

(fl Full KYC exercise, including recent photograph, will be required to be done as
per periodicity related to risk profile / category of the customers i.e. LOW,
MEDIUM and HIGH.

(g) Fresh photographs will be required to be obtained from minor customer on

bec6ming major.

(h) 'Mandatory' information required for KYC purpose, which the customer is obliged
to give while opening the account / or during periodic updation, shall be obtained
from the customer. Other 'Optional' customer details/additional information, if
required may be obtained separately after the account is opened only with the
explicit consent of the customer. The customer has a right to know which are the
information required for KYC, he / she is obliged to produce and / or additional
information sought by the bank that is 'optional'.

(i) Whenever there is suspicion of money laundering or terrorist financing or there

are doubts about the adequacy or veracity of previously obtained customer
identification data, Branches should review the due diligence measures including
verifying again the identity of the client and obtaining information on the purpose
and intended nature of the business relationship.

0) At times close relatives, e.g. wife, son, daughter and parents, etc, who live with
their husband, father/mother and son respectively and find it difficult to open an
account as the KYC documents required for address verification are not in their
name. Branches are advised in such cases to obtain KYC documents of the
relative with whom the prospective customer is living along with a declaration
from the relative that the said person (prospective customer) wanting to open an
account is staying with him/her.

(k) Minimum documents for KYC process shall be obtained. List of such OVDs and
other documents has been given vide Point 4 above.

(l) Address given in the Account Opening Form (AOF) should match the KYL
document submitted by the customer. RBI has relaxed norms for furnishing
address proof in exceptional cases. Only one documentary proof of address
(either current or permanent) may be obtained while opening an account or
during periodic updation. ln case the address proof mentioned as per 'proof of
address' undergoes a chan proof iS required to be submitted
within a period of six mo roof of address furnished by the
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 customer is not the local address or address where the customer is currently
residing, a declaration of the local address shall be obtained on which all
correspondence will be made by the bank with the customer. No proof is required
to be submitted for such address for correspondence / local address. This
address may be verified by the bank through 'positive confirmation' such as
acknowledgement of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic
conversation (iii) visits. ln the event of change in this address due to relocation or
any other reason, customers should intimate the new address for
coribspondence to the bank within two weeks of such a change.

(m) Full KYC Com D iant Account Holder n eeds to transfer his, her accou nt to
other branch due to som e oenu ine ouroose:

ln terms of extant guidelines, the full KYC once done by one branch should be
valid for another branch upon transfer of the account to other branch' The
customer should be allowed to transfer his account from one branch to another
without restrictions. ln such a case, the transferor branch should send the KYC
documents of the customer (AFTER RETAINING A PHOTOCOPY FOR
THEMSELVES) to the transferee branch under cover of an official
communication / lOM. Existing accounts may be transferred to the transferee
branch of the customer's choice, without insisting on fresh proof of address and
on the basis of a self-certification from the account holder about his / her current
address. The transferee branch should open the account on the basis of these
KYC documents. A s a nsk mitioant. in no case should the documents De senf
throuoh the cu stomer / or anv other De rson other than bv oost / ier / email.

(n) Full l(YC Com oliant Account Holder n eeds to oDe n his / her fresh account
with other branch due to some oenuine uroose:

ln terms of extant guidelines, the full KYC once done by one branch should be
valid for another branch in the instant case. However, presently the system is not
configured to capture soft copies of KYC documents, so the customer should be
asked to produce copies of same or other acceptable KYC documents where he /
she intend to open fresh account. The branches shall open such accounts in
same CUST lD. The parent Branch may send certified copy of KYC documents
for the purpose under cover of an official communication / lOM.

As a nsk mitioant. in no case should the documenfs be s ent throuoh the

customer / or an v other oerson other than b v oost / couier / email.

(o) The customers are required new address within two weeks of any
change in their existing ave been advised to inform their
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 customer to follow the guideline and should obtain an undertaking to this affect
while opening new accounts.

(p) The Ministry of Finance, Govt. of lndia, has also directed us to provide account
portability to our customers whereby a customer desirous of shifting his / her
account to another bank need not be required to submit KYC documents afresh.
The Bank which has done the KYC of the customer should certifo the same and
convey to the transferee bank 'on line'. The responsibility of transferring the KYC
certification and the account to the transferee bank will be on the transferor bank.
ln aase of transfer to other bank, the email lD of the branch concerned may be
obtained from the Bank concerned on their letterhead under their branch seal'
(Please refer to H.O. Br. Cir. 105/129 dated 4.11.2011 in this regard). Fresh
address proof (as detailed in Para ix above i.e. either current or permanent
address) may be obtained in case an account is transferred to our bank from
another bank and where the location of the prospective customer has also
changed.

14. Customer Tvoe and CDD/EDD

Customer due diligence is a process to know the customer first with the documents
(OVDs) and then by front loading such information, making efforts to know the
/
occupation business activity and based on these establishing relationship for
banking needs.

(a) CDD procedu re for lndividual a unts

(i) lnformation and type of the documents depend on the type of customer i.e.
individual, corporate etc. For customers who are individual natural /
pensons, identification / address is obtained through self attested copy of
one of the SIX OVDs to verifY the
.
f identity and address of the customer
2. one recent photograph,
3. any other document pertaining to business or financial status i.e.
Balance sheet, income tax return etc.

(ii) e-KYc

The e-KYC service of Unique ldentification Authority of lndia (UlDAl) shall be

accepted as a valid process for KYC verification under the PML Rules, and
 1 . the information containing demographic details and photographs made
available from UIDAI as a result of e-KYC process is treated as an
'Officially Valid Document', and

2. transfer of KYC data, electronically to the RE from UlDAl, is accepted

as valid process for KYC verification.

Provided further that the Bank shall provide an option for One Time Pin (OTP)
based e-KYC process for on-boarding of customers. Accounts opened in
terms of this proviso i.e., using OTP based e-KYC, are subject to the following
conditions:

1. There must be a specific consent from the customer for authentication

through OTP.

2. the aggregate balance of all the deposit accounts of the customer shall
not exceed rupees one lakh.

3. the aggregate of all credits in a financial year, in all the deposit taken
together, shall not exceed rupees two lakh.

4. As regards borrowal accounts, only term loans shall be sanctioned.

The aggregate amount of term loans sanctioned shall not exceed
rupees sixty thousand in a Year.

5. Accounts, both deposit and borrowal, opened using OTP based e-KYC
shall not be allowed for more than one year within which Customer
Due Diligence (CDD) procedure as provided in section 16 or as per the
first proviso of Section 17 of the Principal Direction is to be completed.
lf the CDD procedure is not completed within a year, in respect of
deposit accounts, the same shall be closed immediately' ln respect of
borrowal accounts no further debits shall be allowed.

6. A declaration shall be obtained from the customer to the effect that no

other account has been opened nor will be opened using OTP based
KYC either with the same Bank or with any other RE. Further, while
uploading KYC information to CKYCR, Bank shall clearly indicate that
such accounts are opened using OTP based e-KYC and other REs
shall not open accounts based on the KYC information of accounts
opened with OTP procedure

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 7. Bank shall have shict monitoring procedures including systems to
generate alerts in case of any non-compliance/violation, to ensure
compliance with the above mentioned conditions.

Bank shall prinUdownload directly, the prospective customer's e-Aadhaar

letter from the UIDAI portal if such a customer knows only his/her Aadhaar
number or if the customer has only a copy of Aadhaar downloaded from a
place/source elsewhere, provided the prospective customer is physically
present in the branch/ office.

(iii) Simplified KYC norms

1. ln case the persons who can be categorized as'Low Risk' and are not
able to produce proposes to open an account does not have an OVD as
'proof of address', such person shall provide OVD of the relative as
provided at sub-section 77 of Section 2 of the Companies Act' 2013'
read with Rule 4 of Companies (Specification of definitions details)
Rules, 2014, with whom the person is staying, as the'proof of address'
A declaration from the relative that the said person is a relative and is
staying with him/her shall be obtained.

2. As per RBI Master Direction (KYC) 2016, dated 25.02.2016'

in cases where a customer categorised as 'low risk" expresses

inability to complete the full documentation requirements i.e
pertaining to proof of address on account of any reason that the
Branch considers it to be genuine and where it is essential not to
interrupt the normal conduct of business, Branches shall, at their
option, complete the verification of identity of the customer within a
period of six months from the date of establishment of the
relationship.

ln respect of customers who are categorised as'low risk' and are not
able to produce any of the OVDs 'simplified procedure' is applied for
verification of identity of the customer, the following documents shall
be deemed to be OVD:

a identity card with applicant's photograph issued by Central/

State Government Departments, Statutory/ Regulatory
Authorities, Public Sector Undertakin gs, Scheduled Commercial
Banks, and llnstitutions;
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 Letter issued by a Gazetted officer, with a duly attested
photograph of the person.

Provided further that where 'simplified measures' are applied for

verifying, for the limited purpose of, proof of address the following
additional documents are deemed to be OVDs :

a. Utility bill, which is not more than two months old, of any
service provider (elechicity, telephone, post-paid mobile
phone, piped gas, water bill);
b. Property or Municipal Tax receipt;
c. Bank account or Post Office savings bank account statement;
d. Pension or family Pension Payment Orders (PPOs) issued to
retired employees by Government Departments or Public
Sector Undertakings, if they contain the address;
e. Letter of allotment of accommodation from employer issued by
State or Central Government departments, statutory or
regulatory bodies, public sector undertakings, scheduled
commercial banks, financial institutions and listed companies.
Similarly, leave and license agreements with such employers
allotting official accommodation; and
f. Documents issued by Government departments of foreign
jurisdictions or letter issued by Foreign Embassy or Mission in
lndia.

Explanation: During the periodic review, if the 'low risk' category customer for
whom simplified procedure is applied, is re-categorised as 'moderate or
"high' risk category, then Bank shall obtain one of the six OVDs given at
Point 4 (m) for proof of identity and address. lf such a customer fails to
submit the desired OVD, Branches shall initiate action as advised at Point 15
(b).

(iv) Small Accounts:

The individual customer who does not possess either any of the OVDs or
documents applicable in respect of "Simplified Procedure" (as detailed above
Point vi) and desires to open a bank account, such type of account shall be
opened as "Small Account" with guidelines / terms as under:-

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 1. Small account means a savings account;
2. An individual shall be allowed to open a'small account'on production of
a self attested photograph and affixation of signature or thumb
impression, as the case may be, on the account opening form provided
the Branch. The branch official shall certify having obtained photograph
and signature / thumb impression of the individual while opening the
said account.
3. The aggregate of all credits in such accounts in a financial year must
not exceed Rupees One Lakh;
4. The aggregate of all withdrawals and transfers in a month must not
exceed Rupees Ten Thousand;
5. The balance at any point of time does not exceed Rupees Fifty
Thousand;
6. No foreign remittance shall be credited in the account;
7. The account shall remain operational initially for a period of twelve
months and thereafter for a further period of twelve months if the
account holder provides evidence to the branch of having applied for
any of the officially valid documents within twelve months of the opening
of the account. The entire relaxation provisions are to be reviewed in
respect of the said account after twenty four months.
8. No further transactions to be permitted upon breach of any of the above
conditions;
9. Customer is to be made aware of the above conditions at the time of
opening the small account and a declaration is to be obtained regarding
the terms and conditions etc.

(b) CDD procedure for Proprietorship Accounts:

For opening accounts of Proprietary Firm, the list of documents to be obtained is

given vide Annexure 2. RBI has further advised that as a default rule, banks are
required to obtain any two of the documents in respect of business activity of the
customer as listed in the Annexure 2 (Sr. No.3 - i to x).
However, in cases where the bank is satisfied that it is not possible to obtain two
such documents, then the Branches would have discretion to accept only one of
those documents as activity proof. ln such cases; the branches will undertake
contact point verification, collect such information as would be required to
establish the existence of such firm, confirm, clariff and satisfy themselves that
the busin ess activity has been the address of the said proprietary
concern.
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 It has been further clarified by RBI that the list of registering aulhorities indicated
vide Annexure 2 is only illustrative and therefore includes lie,ences /certificate of
practice issued in the name of the proprietary oonoern by any professional body
incorporated under a statute as one of the documents to prove the activity of the
proprietary concern.

(c) CDD Procedure for Legal Entities, Flrms and Companies:

(i) Accounts of Partnerchip Firms:

For opening accounts of partnership concerns, the partnership deed and

registration certificate shall be obtained along with OVDs of each partners
and beneficial owner as defined vide point D below. The list of documents
to be obtained is given vide Annexure 2

lf partnership concern is unregistered, the said concern shall be treated as

unincorporated body of individuals till submission of registered partnership
deed by the said concern.

(ii) Accounts of Companies and Firms:

For opening accounts of the company, list of documents to be obtained, is

given vide Annexure 2. Branches need to be vigilant against business
entities being used by individuals as a 'front' for maintaining accounts with
us. Branches should examine the control structure of the entity, determine
the source of funds and identify the natural persons who have a controlling
interest and who comprise the management i'e. beneficial owner of the
entity, guidelines is given vide point D below. A certificate to the effect
should be obtained from the statutory auditor of the company. These
requirements may be moderated according to the risk perception e.g. in
the case of a public company it will not be necessary to identify all the
shareholders.

(iii) TrusU Nominee or Fiduciary Accounts:

For opening accounts of a Trust, list of documents is given vide Annexure

2. While opening accounts of a Trust, identity of the Trustees should be
verified including those of the settlers of the Trust, persons settling assets
into the Trust, grantors, , beneficiaries and signatories. ln case
beneficiaries are na such beneficiaries should also be
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 verified. ln the case of a foundation, steps should be taken to verify the
founder managers/directors and the beneficiaries, if defined.

It is possible that Trust / Nominee or Fiduciary accounts may be used to

circumvent the ClP. Branches should determine whether the customer is
acting on behalf of another person as Trustee / Nominee or any other
intermediary. Where a customer/individual is acting on behalf of another
person/s as Trustee/nominee or any other intermediary, branches should
obtain satisfactory evidence of the identity of such intermediaries /
Trustee/nominee and also of the oerson/s on whose behalf thev are
and obtain det the nature of t I er arran e
in place.

The beneficial owner must be identified along with OVDs as per procedure
given vide point D below.

(iv) Accounts of Juridical Persons not Specified

For opening accounts of juridical persons not specifically covered in the

earlier part, such as Government or its Departments, societies,
universities and local bodies like village panchayats, a certified copy of the
following documents shall be obtained:

1. Document showing name of the person authorised to act on behalf

of the entity;
2. Officially valid documents for proof of identity and address in
respect of the person holding a power of attorney to transact on its
behalf and
3. Such documents as may be required by the Bank to establish the
legal existence of such an entity/juridical person.

(d) Beneficial Owner:

Rule 9(3) of the Prevention of Money Laundering Rules, 2005 requires that every
banking company, and financial institution, as the case may be, shall identify the
'Beneficial Owner' and take all reasonable steps to verify his identity. The term
'Beneficial Owner' has been defined as the natural person who ultimately owns
or controls a client and/or the p e on whose behalf the transaction is being
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 conducted, and includes a person who exercises ultimate effective control over a
juridical person. Beneficial owner has been defined as below:

(i) for a company, other than Listed companies, ownership of / entitlement to

more than 25% of share capital or profit;
(ii) for a partnership firm, ownership of / entitlement to more than15% of share
capital or profit;
(iii) for an unincorporated association or body of individuals, ownership of /
'' entitlement to more than15% of share capital or profit;
(iV) for a Trust where the settler of the trust, the trustee, the protector or the
beneficiaries with 15% or more interest in the trust and any other natural
person exercising ultimate effective control over the trust through a chain of
control or ownership;

where no natural person is identified, the beneficial owner is the relevant natural
person who holds the position of senior management. Government of lndia has
since examined the issue and has specified the procedure for determination of
Beneficial Ownership. A declaration from the legal entity duly certified by the
statutory auditor of the legal entity shall be obtained for the purpose. We have
made provision in Finacle for entering the details of beneficial owner. A rate
reoort has been orovide d in MISRPT (FINACLE )inth is reoard

(e) Ongoing Due Diligence

(i) Periodic updation of KYC (Re'KYC) as per stipulated frequency

All the customers are categorized under the risk categories LOW' MEDIUM
and HIGH and Re KYC exercise shall be undertaken i.e. obtaining fresh
KYC documents along with recent photograph as per the stipulated
frequency, given in detail vide Point 12.

(ii) Partial Freezing / Closure of Acounts

The customers who are non-compliant of KYC requirements at any stage

either at the time of on boarding or at subsequent stage and not responding
to the reminders by branches, RBI has advised that banks may impose
'partial freezing' on such KYC non-compliant accounts in a phased manner.
The procedure for exercising option of 'partial freezing' is given as under:

1) initially a notice of three months should be given to the customers to

comply with KYC
I
2) it should be foll r for further period of three months,
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 3) thereafter, branches may impose 'partial freezing', by allowing all
credits and disallowing all debits with the freedom to close the
accounts,
4) lf the accounts are still KYC non-compliant after six months of
imposing initial 'partial freezing' branches may disallow all debits and
credits from/to the accounts, rendering them inoperative. Further, it
would always be open to the branches to close the account of such
customers.
. 5) Decision to close an account in this regard shall be approved by the
Branch Manager.

(0 Enhanced Due Diligence

(i) Accounts of non-face-to-face customers:

Whenever any account is opened without visit of the customer to the

Branch, e.g. NRI accounts, Branches should ensure that all the
documents presented are certified to Bank's satisfaction, call for additional
documents, if necessary. ln such cases, as a prudent and precautionary
measure, branches may also insist that the first credit be effected through
the customeCs account with another bank which, in turn, adheres to
similar KYC standards. In cases where certification is done by any third
party, especially in case of cross border customers (where it is difficult to
match the customer with the documentation), it must be ensured that the
said third party is a regulated and supervised entity and has adequate
KYC systems in place.

(ii) Walk-inCustomets:

ln case of transactions carried out by a non-account based customer' i.e.

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 and documentary proof
of the same should be obtained and held on record. Wherever Bank has
reason to believe that a walk-in customer is intentionally structuring a
transaction into a series of transactions below the threshold of Rs. 50000/-
, the Bank should verify identity and address of such customer and also
consider filing Suspicious Transaction Report (STR) to the Financial
lntelligence Unit - lndia ( F

\0. .

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 Banks are reauired to veifu the ideftiU dlhg eagomeo - l
mon transler era

(iii) Accounts of Politically Exposed Persons (PEPs) resident outside

lndia:

PEPs are individuals who are or have been entrusted with prominent
public functions in a foreign country, e.g. Heads of States or of
Governments, senior politicians, senior governmenUjudicial/military
officers, senior executives of state owned corporations, important political
party officials, etc. Sufficient information should be gathered on any
person/customer of this category intending to establish a relationship with
the Bank and all the information available on the person in the public
domain should be checked. ldentity of such person/s should be verified
and information about the sources of funds should be sought before
accepting the PEP as a customer. Openinq of account of PEP. his/her
mil member/ r his/her cl ive/s should db
the Branch Head and such accounts should be subiect to enhanced
monitorin o on an onooln o basis.
When r an existino cus tomer or the beneficial owner of an existino
account subseouentlv b omes PEP. aoo I of the Bran ch Head
ould be obta for contin n of such a nts / the busi
relations hio and such accounts should be subiect to CDD and
enhanced monitorinq. as aoolicable to the customers of PEP
cateoorv on an onool o basis. These instructions sh ould be
followed even in accounts whe re the PEP is th e ultimate 'Beneficial
Owne/. Further, identifying and applying enhanced due diligence to
PEP customers who are close relatives of PEPs and accounts of
which a PEP is the ultimate beneficiary owner should also be done
meticulously. All PEP accounb are to be cateoorised as HIGH risk
AB INITIO,

(iv) Clients Accounts opened by Professional lntermediaries:

Where accounts are opened by a professional intermediary on behalf of a

single client, the identity of such single client should be verified. As a
bank, we may also hold 'pooled' accounts managed by professional
intermediaries on behalf of entities like mutual funds, pension funds etc'
We may also maintain 'pooled' accounts managed by lawyers/chartered
acco untants or stockbroke nds held 'on deposit' or 'in escrow' for a
range of clients. by the intermediaries are not co-
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 mingled at the Bank and there are 'sub-accounts' each of them
attributable to a beneficial owner, all the beneficial owners must be
identified. Where such funds are co-mingled at the Bank, we should still
look through to the beneficial owners. lf we rely on .the Customer Due
Diligence done by an intermediary, we should satisfo ourselves that the
intermediary is regulated and supervised and has adequate systems in
place to comply with the KYC requirements. Ultimate sibilitv for
'Knowinq th e Customer' lies with as a bank.
No account of any professional intermediaries on behalf of their
clienUs should be opened or held by the Bank where the
professional intermediaries like lawyers, chartered accountants, etc.,
are unable to disclose the true identity of the owner of the
accounUfunds due to any professiona! oblagation of customer
confidentiality. Further no professional intermediary should be allowed to
open any account on behalf of a client where Bank is not able to know and
identify the client for any reason.

(v) Accounts of Non-Profit Organizations (NPOs):

An NPO is defined as:

"Any entity or organization that is registered as a Trust or a Society under
the Societies Registration Act, 1860 (21 of '1860) or any State legislation
or a Company registered under Section 8 of the Companies Act ' 2013."

These accounts should be appropriately classified under appropriate

Constitution Code in the Customer Master Maintenance menu of the
Finacle system for effective monitoring / EDD.

(vi) Accounts of Self HelP GrouPs

At the time of opening account of SHG, KYC verification of all the

members of SHG need not be done while opening the savings bank
account of the SHG as KYC verification of all the office bearers would
suflice.
As regards KYC verification at the time of credit linking of SHGs, it is
clarified that since KYC would have already been verified while opening
the savings bank account and the account continues to be in operation
and is to be used for credit linkage, no separate KYC verification of the
members or office bearers is necessary.
(vii) Accounts of Foreign students studying in lndia.

Branches may open a Non Resident Ordinary (NRO) bank account of a

foreign student on the basis of his/her passport (with, appropriate visa &
immigration endorsement) which contains the proof of identity and
address in the home country along with a photograph and a letter offering
admission from the educational institution.
Within a period of 30 days of opening the account, the foreign student
should submit to the branch where the account is opened, a valid address
proof giving local address, a lefter from the educational institution as a
proof of living in a facility provided by the educational institution.
During the 30 days period, the account should be operated with a
condition of allowing foreign remittances not exceeding USD 1,000 into
the account and a cap of monthly withdrawal to Rs. 50,000/-, pending
verifi cation of address.
On submission of the proof of current address, the account would be
treated as a normal NRO account, and operations in the account will be
valid in terms of RBI and FEMA guidelines. Students with Pakistani
nationality will need prior approval of the RBI for opening the Account.

(viii) Accounts of Non-Government Organizations (NGOs):

Accounts of NGOs should be opened only after fully complying with the
KYC/AMUCFT guidelines. Accounts of
NGOs receiving foreign
contribution should be registered with the Ministry of Home Affairs,
Government of lndia or possess prior approval of the Government for
receiving foreign funds. All NGO accounts opened (except those
promoted by the United Nations or its agencies) should be classified
as High Risk category accounts AB lNlTlO and transactions in these
accounts should be properly scrutinized with enhanced due
diligence on continuous basis. All foreign inward remittances to the
credit of these accounts should be scrutinized taking into account the
customer profile, country of origin of funds, etc' and extant guidelines
regarding such remittances.

(ix) Simptified KYC norms for Foreign Portfolio lnvestors (FPls):

I
ln terms of Rule (14) (i) of the PML Rules, simplified norms have been
prescribed for those FPls who have been duly registered in accordance
with SEBI guidelin esa undergone. the required KYC due
d ili gence/verifi cation Bl through a Custodian/lntermediary
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36
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 regulated by SEBI. Such eligible / registered FPls may approach a bank
for opening a bank account for the purpose of investment under Portfolio
lnvestment Scheme (PlS) for which KYC documents prescribed by the
RBI would be required. For this purpose banks may rely on the KYC
verification done by the third party (i.e. the Custodian/SEB| Regulated
lntermediary) subject to the following conditions:

1 . the reporting entity immediately obtains necessary information of

such client due diligence carried out by the third party;
2. the reporting entity takes adequate steps to satisry itself that copies
of identification data and other relevant documentation relating to the
client due diligence requirements will be made available from the
third party upon request without delay;
3. the reporting entity is satisfied that such third party is regulated,
supervised or monitored for, and has measures in place for
compliance with client due diligence and record-keeping
requirements in line with the requirements and obligations under the
Act;
4. the third party is not based in a country or jurisdiction assessed as
high risk;
5. the reporting entity is ultimately responsible for client due diligence
and undertaking enhanced due diligence measures, as applicable;
and
6. where a reporting entity relies on a third party that is part of the same
financial group, the Regulator may issue guidelines to consider any
relaxation in the conditions (1) to (4).

15. Monitoring of Transactions

(a) Once an account is opened and business relationship is established after ensuring
KyC compliance, it is essential that the transactions in the account are monitored on
an ongoing basis so as to achieve the ultimate objective of preventing the Bank from
being used, intentionally or unintentionally, by criminal elements for money
laundering or terrorist financing activities. Understanding of normal and reasonable
activity of a customer enables the Bank to identify transactions that fall outside the
regular pattern of activity. Transactions which ggno! fall within the ambit of the
declared activity of the customer may be treated as suspicious and need to be
reported to the FIU-IND. Special attention should be given to all complex, unusually
large value transactions, transactions involving large amount of cash inconsistent
with the normal and expected activity of the customer, transactions having unusual
patterns which have no appare visible lawful purpose, etc. High risk
:.- - qategory accounts should be sive monitoring. Transactions that
B06rit MacUng
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 involve large amounts of cash inconsistent with the normal and expected activity of
the customer should particularly attract the attention of the bank. Very high account
turnover, inconsistent with the size of the balance maintained may indicate that
funds are being 'washed' through the account.

(b) As a measure towards proper monitoring of kansactions, we have

identified
additional lines of Occupations of customers. Specific codes have been assigned for
the newly identified occupations and they have been uploaded into the Finacle
system. Knowing the occupation/activity of the customer is very important in risk
categoiization as the nature of transactions, value/volume of transactions, turnover
in the account etc. depend on the occupation' Hence. it is e ial that the
on of the rts rl unde the bran n lea
s / written in the Account Ooeni Form.

(c) The close monitoring of following types of transactions shall necessarily be canied
out:
(D Large and complex transactions including RTGS transactions, and those with
unusual patterns, inconsistent with the normal and expected activity of the
customer, which have no apparent economic rationale or legitimate purpose,
(ii) Transactions which exceed the thresholds prescribed for specific categories
of accounts.
(iii) High account turnover inconsistent with the size of the balance maintained.
(iv) Deposit of third party cheques, drafts, etc. in the existing and newly opened
accounts followed by cash withdrawals for large amounts.
(v) The extent of monitoring shall be aligned with the risk category of the
customer.
Explanation: High risk accounts have to be subjected to more intensified
monitoring.

(i) A system of periodic review of risk categorisation of accounts, with such

periodicity being at least once in six months, and the need for applying
enhanced due diligence measures shall be put in place'
(ii) The transactions in accounts of marketing firms, especially accounts of Multi-
level Marketing (MLM) Companies shall be closely monitored.
Explanation: Cases where a large number of cheque books are sought by the
company and/or multiple small deposits (generally in cash) across the country in
one bank account and/or where a large number of cheques are issued bearing
similar amounts/dates, shall be immediately reported to Reserve Bank of lndia and
other approp riate authorities su
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(d) Accounts / Transactions where PAN OR Form 60/61 required

Rule '1148 of the lncome Tax Rules, 1962 has made it mandatory for the customer
to quote the PAN for certain bankinE transactions, which have been detailed as
below:
(0 Placing a time deposit (i.e. a Term Deposit) EXCEEDING Rs'50'000/ with any
Banking Company to whom the Banking Regulation Act' 1949 applies;
(ii) Opening an account (not-bejog-aime-dc@gj!) with a Banking Company to
.which the Banking Regulation Act' 1949 applies;

(iii) Payment in cash for purchase of bank drafts or pay orders or banker's
cheques FOR AN AMOUNT AGGREGATING TO RS. 50.000/- OR MORE
DURI ANY ON from a Banking Company to which the Banking
Regulation Act, 1949 applies;
(iv) A deposit in cash aggregating to Rs.50,000/- or more with a Banking
Company to which the Banking Regulation Act, 1949 applies;
(v) Making an application to any Banking Company to which the Banking
Regulation Act, 1949 applies for issue of CREDIT OR DEBIT card;
ln case the person making application for the transactions mentioned at sr.
Nos a & b above is a MINOR, who does not have any income chargeable to
income tax, he / she shall quote the PAN of his / her father or mother or
guardian, as the case maY be.

PROVID ED FURTHE THAT ANY PERSON WHO DOES NOT HAVE A

PAN A D WHO ENTE RS /NIO A NY TRANSAC TION SPECIF IED IN THIS
RULE. LL MAKE A DECLARATI IN FORM 1 AS THE CA E MAY

BE GIVING THEREIN THE PARTICU IARS OF SUCH TRANSACI/ONS.

We have issued instructions to branches to obtain PAN or form 60/61 in case

of deposit of cash Rs.50000/- and above for any of the above transactions'

(e) Operation of Bank Accounts & Money Mules:

lnamoneymuletransaction,anindividualwith@to
receive cheque deposits or wire transfers and then hansfer these funds to accounts
held on behalf of another person or to other individuals, minus a certain commission
payment. Money mules may be recruited by a variety of methods, including spam
emails, advertisements on genuine recruitment web sites, social networking sites'
instant messaging and adverti papers. Money mules can be used to
launder the proceeds of fraud hing and identity theft) by criminals
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 who gain illegal access to deposit accounts by recruiting third parties to act as
'money mules'. ln some cases these third parties may be innocent while in other
cases they may be having complicity with the criminals. When caught, these money
mules often have their bank accounts suspended, causing inconvenience and
potential financial loss, apart from facing likely legal action for being part of a fraud.
Many a times the address and contact details of such mules are found to be fake or
not up to date making it difiicult for enforcement agencies to locate the account
holder. The operations of such money mules can be minimized if branches follow the
guideliiies on opening of accounts and monitoring of transactions. Branches should
especially monitor the operations in the accounts of low profile customers like
students, pensioners, housewives etc. and in case such accounts show transactions
which are not commensurate with the profile, it may be an indication or a pointer that
the account is being used as a money mule account. ln such cases the branches
should immediately file suspicious Transaction Report (STR). The same had been
advised vide Branch Circular 107/56 dated 27.06.2013

16. Maintenance and preservation of Records of Transactions/

Preservation of lnformation :

(a) Maintenance of Records of Transactions as under:

a All transactions involving receipts by non-profit organisations, whether cash,

clearing or transfer, of more than Rupees Ten Lakh or its equivalent
a or its equivalent in foreign currency taken place within a month and all series
of cash transactions which are integrally connected to each other having
individual value in foreign currency in the accounts of Non-Profit
Organizations.
All cash transactions ofthe value of more than Rupees Ten Lakh below Rs.10
lakh or its equivalent in foreign currency, but the aggregate value exceeding
Rs.10 lakh, taken place within a month.
a All cash transactions where forged or counterfeit currency notes or bank
notes have been used as genuine.
a All transactions where any forgery of a valuable security or a document has
taken place facilitating the transactions.
t All suspicious transactions whether or not made in cash, including attempted
transactions.
a All transactions pertaining to Cross Border Wire Transfers of value more than
Rs. 5 lacs or its equivalent in foreign currency.

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(b) lnformation to be preserved:

All necessary information in respect of transactions referred to above should be

preserved so as to permit reconstruction of individual transaction, including the
following information:
. The nature ofthe transactions;
o The amount of the transaction and the currency in which itwas denominated;
. The date on which the transaction was conducted:
o The parties to the transaction.

(c) Proper systems for Maintenance and Preservation of Records:

. Branches should ensure that an appropriate system is in place for proper

maintenance and preservation of
records of
transactions detailed
hereinabove. They should also ensure that all information pertaining to the
relatedaccountsarepreserved.Theguidelinesareenumeratedbelow:
r The records should be maintained and preserved in a manner that allows the
data to be retrieved easily and quickly whenever required or when requested
by the comPetent authorities.
. As stated above, all necessary records of transactions, both domestic as well
as international, which will permit reconstruction of individual transactions
(including the amounts and types of currency involved, if any) so as to
provide, if necessary, evidence for prosecution of persons involved in criminal
activity, should be preserved for a period of at least five vears from the
date of transacti on betwe en the bank a nd the client.
(e.9.
t Records pertaining to the identification of the customer and his address
copiesofKYCdocumentslikepassports,identitycards,drivinglicenses,PAN
utitity bills, etc.) obtained while opening the account and during the
""i0,
course of business relationship, are properly preserved for a trl!?rellgl3!
least ve vearc afte r the bus iness rela tionshio has ended or th e account
is closed . whic hever is later.
a The identification records and transaction data should be made available to
the competent authorities upon request.
a ln case of all complex, unusual large transactions and all transactions of
unusual patterns which do not have apparent economic or visible lawful
purpose, the background including all documents/office records/memoranda
pertaining to such transactions and purpose thereof should, as far as
possible, be examined and findings at the Branch level as well as Principal
Officer level should be properly recorded; such records and related
documents should be made e to hel p the auditors in their daY-to-daY
work relating to scruti s and also to RB|/other relevant
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 authorities. These records should be preserved at least for a oeriod of five
vears.
a Record of all transactions reported in the Cash Transaction Report'
Suspicious Transaction Report, Counterfeit Currency Report, Report of Non-
Profit organization(credits by cash or otherwise), cross Border wire Transfer
(CBWT), submitted to the FIU-IND should be preserved fo r a oeriod of at
least five vears m the date of transa ction betwee n the ban k and the
gll"nt
Specific guidelines have been issued to the lnternal Auditors / Concurrent
Auditors for carrying out audit of adherence to KYC/AMUCFT guidelines
during audit of the Branches.

17. Wire Transfers

wire transfers are used as an expeditious method for transferring funds between
bank accounts. wire transfers include transactions occurring within the national
ensure that
boundaries of a country or from one country to another. Branches should
all wire transfers are accompanied by the following information:

(a) Cross-border wire transfers:

oAllcross.borderwiretransfersmustbeaccompaniedbyaccurateand
meaningful originator information.
o lnformation accompanying cross-border wire transfers must contain the
name
of that
and address of the originator and where an account exists, the number
account.lntheabsenceofanaccount,auniquereferencenumber,as
prevalent in the country concerned, must be included'
. where several individual transfers from a single originator are bundled in a
batch file for transmission to beneficiaries in another country, they may
be
exemptedfrominc|udingfulloriginatorinformation,providedtheyincludethe
originator,saccountnumberoruniquereferencenumberasmentioned
above.
a All in tion mone tra s n unt ed
m of s be n afte veifica
nda a u of the be
of iden
ined held record

(b) Domestic Wire Transfers:

lnformation accomPanYing wire transfers of Rs. 50,0001 (Rupees

Fifty Thousand) and a outward) must include comPlete
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 originator information i.e. name, address, account number, etc., unless full
originator information can be made available to the beneficiary bank by other
means.
o lf Branch has reason to believe that a customer is intentionally structuring
wire transfer to below Rs. 50,000/- (Rupees Fifty Thousand) to several
beneficiaries in order to avoid reporting or monitoring, the Branch must insist
on complete customer identification before effecting the transfer. ln case of
non-cooperation from the customer, effofis should be made to establish his
identity and Suspicious Transaction Report should be made to FIU-IND.
'When
o a credit or debit card is used to effect money transfer, complete
originator information, i.e. name, address and account number etc' should be
included in the message.
a ln case of transactions carried out by a non-account based ' i'e' a
'walk-in' customer, where the amount of transaction is equal to or exceeds
a
Rs. 50000/-, whether conducted as single transaction or several
transactions that appear to be connected, the customer's identity and address
should be verified and documentary proof of the same should be obtained
and held on record. wherever Bank has reason to believe that a 'walk-in'
customer is intentionally structuring a transaction into a series of transactions
below the threshold of Rs. 50000/-, the Bank should verify identity and
address of such customer and also consider filing suspicious Transaction
Report (STR) with the Financial lntelligence Unit - lndia (FlU-lND)
mifta f funds wa mand mail / tc nsfe
NEF7. RIGS ANd other me ans and iss ue of tra vellers cheoue. sale of
a tin ns/ th for value Rs.
Tho and&a ove ln e
lumo sum. or ultiole such tra s
aoo atino to Rs. Fiftv tho usand or to the same aser on a sinole
dav. has tob e effected onlv bv debit to the accou nt & not aoainst cash
pavment.

(c) Role of Ordering Bank:

The ordering bank, i.e. the bank that originates a wire transfer as per the
order placed by its customer, should ensure that the qualifying wire transfers
contain complete originator information.
o The bank should verifo and preserve the information at least for a period of
five vears from the date of each transaction.

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43
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 (d) Role of lntermediary Bank:

a For both cross-border and domestic wire transfers, the bank processing an
intermediary element of a chain of wire transfers should ensure that all
originator informalion accompanying a wire transfer is retained with the
transfer.
a Where technical limitations prevent full originator information accompanying a
cross border wire transfer from remaining with a related domestic wire
iransfer, a record must be kept for at least five vears by the receiving
intermediary bank, of all the information received from the ordering bank'

(e) Role of Beneficiary Bank:

I The beneficiary bank should have effective risk based procedures in place to
identify wire transfers lacking complete originator information'
o The lack of complete originator information may be considered as a factor in
assessing whether a wire transfer or related transactions are suspicious and
whether they should be reported to the FIU-IND'
. The beneficiary bank should also take up the matter with the ordering bank if
a transaction is not accompanied by detailed information of the fund remitter.
o lf the ordering bank fails to furnish information on the remitter, the beneficiary
bank should consider restricting or even terminating its business relationship
with the ordering bank.

(f) Exemptions:
e lnter-bank transfers and settlements where both the originator and beneficiary
arebanksorfinancialinstitutionswouldbeexemptedfromtheabove
requirements.

18. Gredit / Debit / smart / Gift cards, Mobile wallet, Net Banking/
Mobile Banking, RTGS, NEFT/ ECS, IMPS, Demit Services/ E'KYC'
Money Laundering Threats from new technology

(a) Cards Business:

our Bank is in the business of issuing various types of calds that are used by
customers for buying goods and services, drawing cash from ATMs and can also
be used for electronic transfer of funds. credit cards include issuance of Branch
Billing Cards as well as D irect s. ln case of Branch Billing Cards, the
customers are required to th the Branch which is considered
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 as charge account for debiting the bills. Branches should ensure that KYC norms
are fully complied with before issuance of cards to the Branch customers.

ln respect of Direct Billing cards, as the persons to whom these cards are issued
are nonicustomers Branches should importantly note to &rry out extensive
customer due diligence before issuance of cards to them. Complete KYC
exercise should be done. Apart from obtaining recent photograph, proof of
identity and address from such non-customers, Branches should ensure proper
verification of the documents submitted to them so as to confirm authenticity of
the documents.

Bran es are a to ensure full com

reouired with I KYC/A T
o nes lssued from timetime. tn re soect of ca ers. The same
has been advised vide Branch circular 107/48 dated 12.06.2013. These
guidelines are also required to be complied with in case of existing add-on card
holders.

(b) Money laundering threats from new technologies:

Branches should pay special attention to any money laundering threats that may
arise from new or developing technologies like internet banking, mobile banking
etc. that might favour anonymity and take measures, if needed, to prevent their
use in money-laundering schemes. Branches should extend such facilities only to
those accounts that are fully KYC compliant, as per extant KYC/AMUCFT
guidelines.

(c) Depository Services:

our bank is extending Depository services to the customers. The seryices are
rendered through two Depository Participant offices viz. central Depository
services Ltd. (cDsL) and National securities Depository Ltd. (NSDL). As per the
existing business model, Demat Accounts are opened only of those customers
who have a duly KYC compliant Banking Account with us or for one who opens
a KYC compliant Banking Account with us. Branches should importantly note that
Demat accounts should be recommended by them only in respect of their KYC
compliant customers. Moreover, the Branch/office forwarding the Demat Account
Opening Form (AOF) of a prospective customer is required to ensure proper
identification/verification and follow the
guidelines issued byour
BanUDepositories/Regulatory Authorities. All the guidelines applicable for a
Banking Account are applicable to Demat Account also and therefore, it should
be ensured by the Branches/offices that Due Diligence in respect of Banking
Account of Demat custom er Whenever requests for oPening of
Demat accounts are rece n-compliant account holders, the
Board M€adn0
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 Branch/Office should first ensure that the respective bank account is made KYC
compliant before recommending the Demat application.

19. Reporting

Reporting to Financial lntelligence Unit - lndia:

ln terms of the PML Act Rules following Reports are to be submitted to the Financial
lntelligence Unit-lndia, Ministry of Finance, Government of lndia, New Delhi:

(a) Cash Transactlon RePort (CTR):

CTR for every month is to be submitted by 15th of the succeeding month and
shall include:

a All cash transactions of the value of more than Rupees Ten Lakh or its
equivalent in foreign currency taken place within a month'
a All series of cash transactions integrally connected to each other
(aggregate value of all debit OR all credit transactions, inespective of value
place
of eacn transaction), where series of such transactions have taken
withinamonthandaggregatevalueofallsuchtransactionsexceeds
Rupees Ten Lakh or its equivalent in foreign currency'
a As per the extant arrangement, CTR is generated, consolidated and
submitted by Head Office to the FIU- lND.
Record of all transactions reported in the cash Transaction Report should
be preserved for a oeriod of at least five vears from the date of
tt?n ction n e bank nd the cl ient

(b) susPlclous TRANSACTION REPORT (STR)

Considering the importance attached to the PML Act and as per the
directives of the Reserve Bank of lndia (RBl) as well as the FIU-IND' a
comprehensive Anti Money Laundering package (AMLOCK) has been
installed for scrutinizing the transactions in the accounts, generating alerts
and identifying suspicious transactions.
a The package consists of various scenarios of transactions, which are
considered being of suspicious nature. Financial parameters have been
assigned to each of the scenarios. After End of Day operations (EOD) in
the Finacle system, the d loaded into the AMLOCK on daily basis.
The AMLOCK proces e basis of the scenarios available in
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 the package and identifies the transactions, which have breached the
financial parameters assigned for each scenario. The transactions so
identified are generated as 'Alerts'. These Alerts are scrutinized manually
to ascertain whether the transactions are indeed of . suspicious nature,
being not in tune with the business/activity of the relative customer, without
any economic rationale etc.
t As the package is centralized at Head Office, the Alerts are generated at
our end. The transactions shall be scrutinized from the Finacle system
keeping in view the nature of the account. activitv/business. amount of
the trans actio ns. etc. ldentified cases are referred to the respective Zonal
Ofiices. Upon receipt of communication from us, the Zonal Offices should
take up with the concerned Branch/es and ascertain the genuineness of
the transactions identified by the package. ln case the ZonelBranch finds
the transaction in order, a certificate as per the specified format should be
forwarded to Head Office, duly signed by the Zonal Manaoer/De outv
ZonaI Manaoer. Branches should send the certificates to their respective
Zonal Offices and not to Head Office. The AMLRO (Anti money laundering
reportingofficers)atHeadofficescrutinizethealertsapartfromseeking
iniormation from the branches and present such cases to a Screening
Committee consisting of Deputy General Manager Compliance
department,twoChiefManagersandoneofficeroftherankofDGMfrom
to
Fraud Risk Management Department or General Operation Department
decide filing of STR on the merits of each case" The STR has to be
reportedwithinTdaysfromthedatedecisionistakenforfilingasSTR'to
FIU-IND.
a There are several indicators of non financial nature which could give rise to
an equal amount of suspicious and Iesult in filing STR; these offline alert
scenarios are as per Annexure lll attached.
a ltislikelythatinsomecasestransactionsareabandoned/abortedby
customers on being asked to give some details or to provide documents. lt
is clarified that all such aftempted transactions should be reported as
STRs,evenifnotcompletedbycustomers,irrespectiveoftheamountof
the transaction.
a sTRs should be reported if there is a reasonable ground to believe that the
transaction involves proceeds of crime generally, irrespective of the
amount of transaction.
a The Zones/Branches should ensure that the customers a re NOT TIPPED
OFF in any manner whatsoever regarding our enquiry. Scrutiny of the
transactions and enhanced due diligence should be done in completely
discreet manner.
Branches may file ST find the transaction to be suspicious
by filling in prescrib hil ishing the details to Head Office.
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 Submission of STR in an account should in no wav restrict operations in
that account and the customer should not know about the STR filed in the
account.
o Record of all transactions reported in the Suspicious Transaction Report
should be preserved for a period of at least five vears from the date of
transactio n between the bank and the client.

(c) Counterfeit Currency Report (CCR):

Al[ cash transactions, where forged or counterfeit lndian currency notes have
been used as genuine, should be reported by the Principal ofiicer to the Flu-
IND in the specified format and submitted to FIU-IND as per their stipulation.
once a counterfeit currency transaction is detected, the same should be
reported by the Branch to the respective Zonal office in the prescribed ccR
foimat immediately and in any case within two davs from the date of such
detection. Zonal office should scrutinize the same and submit to Head office
their ccR in the prescribed format duly signed by the concern ed zonal Manager
as principal officer within turo davs from the date of submission bv the
Branch to enable the Principal officer at Head office to submit the ccR to the
ffU-fNO within the mandatory time limit of 15h of the following month. RBI has
recenfly relaxed the rules in respect of filing of FIR i.e. for upto 4 (four)
counterfeit currency notes per transaction FIR need not be filed. lnstead, a
consolidated monthly statement is to be sent to the police authorities, enclosing
therewith the counterfeit currency notes. ln respect of counterfeit currency
e
notes of 5 (five) and above, FIR has to be filed. Unde no ctrcu ce
cou it cu c n are be rned Custom . As per the
implementation of Reserve Bank of lndia Clean note policy, detection,
impounding and rePorting of co unterfeit notes are revised. Branches are advised
to accept all forged notes of cu stomer and credit the full value to his account. All
Zones I Branches / Offices are advised to refer circular letter No 2013-141155 ref
GOD/DDI(13/14 dated 18.11.2013 in this regard'
Record of all transactions reported in the counterfeit currency Report should be
preserved for a period of at lea st five ye ars from th e date of tra nsa ction
n the ba nk and the client.

(d) Non-Profit Organization Transactions Report (NPOTR):

All hansactions involving receipts of value more than Rupees Ten Lakh or its
equivalent in foreign currency by Non-Profit Organizations should be submitted
every month to the FIU-IND by the 15th of the succeeding month in the
prescribed format bY the Pri n
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 Record of all transactions reported in the Non-Profit Organlzation Report should
be preserved for a period of at leas t five years from the da teoft nsaction
between the bank and the c lient.

(e) Cross Border Wire Transfers (CBWT) Report:

All Cross Border Wire Transfers (CBWT) whether originated in lndia or

destination is lndia, above Rupees Five lacs or its equivalent in foreign currency
has to be reported every month (by the 15th of the succeeding month) to FIU-
IND as per the recent amendment to PML Ad2002.

20. Secrecy Obligations and Sharing of lnformation:

(a) Banks shall maintain secrecy regarding the customer information which arises
out of the contractual relationship between the banker and customer'

(b) while considering the requests for data/information from Government and other
agencies, banks shall satisfy themselves that the information being sought is not
oi such a nature as will violate the provisions of the laws relating to secrecy in
the banking transactions.

(c) The exceptions to the said rule shall be as under:

(i) Where there is a duty to the public to disclose,
(ii) The interest of bank requires disclosure and
(iii) where the disclosure is made with the express or implied consent of the
customer.

(d) NBFCs shall maintain confidentiality of information as provided in section 45NB

of RBI Act 1934.

21. CDD Procedure and sharing KYG information with Gentral KYG
Records Registry (CKYCR)

Bank shall capture the KYC information for sharing with the cKYcR in the manner
mentioned in the Rules, as required by the KYC templates prepared for 'individuals'
and 'Legal Entities' as the case may be.

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22. Reporting requirement under Foreign Account Tax Compliance Act
(FATCA) and Common Reporting Standards (CRS)

Under FATCA and CRS, Bank shall determine whether they are a Reporting
Financial lnstitution as defined in lncome Tax Rule 114F and if so, shall take
following steps for complying with the reporting requirements:

(a) Register on the related e-filling portal of lncome Tax Department as Reporting
Financial lnstitutions at the link https://incometaxindiaefiling.gov.in/ post login ->
My Account -> Register as Reporting Financial lnstitution'

(b) submit online reports by using the digital signature of the 'Designated Director'
by either uploading the Form 618 or'NlL'report, for which, the schema
prepared by Central Board of Direct Taxes (CBDT) shall be referred to'

Explanation:Bankshallrefertothespotreferenceratespublished
by Foreign Exchange Dealers'Association of lndia (FEDAI) on their
website at http://www.fedai.org.in/RevaluationRates'aspx for
carrying out the due diligence procedure for the purposes of
identifying reportable accounts in terms of Rule 114H'

(c)DeveloplnformationTechnology(lT)frameworkforcarryingoutduediligence
.,
procedure and for recording and maintaining the same, as provided in Rule
114H.

(d) Develop a system of audit for the lT framework and compliance with Rules
114F, 114G and 114H of lncome Tax Rules.

(e) constitute a "High Level Monitoring committee" under the Designated Director
or any other equivalent functionary to ensure compliance'

23. Freezing of Assets under Section 5,lA of Unlawful Activities

(Prevention) Act, 1967 (UAPA):

The procedure laid down in the UAPA Order dated August 27, 2009 (Annex I of
this Master Direction shall be strictly followed and meticulous compliance with the
order issued by the Government shall be ensured, given herewith vide
Annexure 5
24. Jurisdictions that do not or insufficiently apply FATF
Recommendations:

(a) statements issued by Financial Action Task Force (FATF). from time to time,
regarding deliciencies in AMUCFT regime of certain countries (urisdictions), are
circulated to us by the Reserve Bank of lndia, which are, in turn, advised by
Head Office to all the Zones I Branches.

(b) Apart from this, Branches should also consider publicly available information for
identifoing countries that do not or insufficiently apply FATF Recommendations.
Branches should exercise utmost caution and diligence while entertaining any
type of banking transactions with such countries'

(c)Branchesshouldexaminethebackgroundandpurposeoftransactionswith
in
such countries (including the legal persons and other financial institutions
such countries) and in case the transactions do not have any apparent
economicorlaMulpurpose,writtenflndingstogetherwithalldocumentsshould
on request'
be retained and made available to the RB|/other relevant authorities,

25. Correspondent Banking & correspondent Relationship with "shell

Bank":
(the
correspondent Banking is the provision of banking services by one bank
.correspondent banr) to another bank (the 'respondent bank"). These services
may include cash/funds management, international wire transfers, drawing
arrangements for demand drafts and mail transfers, payable-through-accounts,
fully
cheqries clearing, etc. Banks should gather sufficient information to understand
the nature of business of the correspondenUrespondent bank'

Before establishing the correspondent relationship with other Banks, the Bank
should carry out the 'Due Diligence' ofthe other Banks and should ascertain Level
of
Anti Money Laundering (AML)/Combating Financing of Terrorism (cFT) compliance,
purpose oi opening the account, identity of any third party entities that will use the
correspondent banking services and regulatory /supervisory framework. Bank should
also ascertain from publicly available information whether the other bank has been
subject to any money laundering or terrorist financing investigation or regulatory
action.

Banks g@IlIglggg..!9glgl into a correspondent relationship with a 'shell

banK (i.e. a bank which is inco in a country where it has no PhYs ical
presence and is unaffiliated to nancial group) . Shell ban not
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 permitted to operate in India. Banks should also guard against establishing
relationships with respondent foreign financial institutions that permit their accounts
to be used by shell banks. Banks should be extremely cautious while continuing
relationships with respondent banks located in countries with poor KYC standards
and countries identified as 'non-cooperative' in the fight against money laundering
and terrorist fi nancing.

Bants should ensure that their respondent banks have anti money laundering
policies and procedures in place and apply enhanced'due diligence' procedures for
transac{ions carried out through the correspondent accounts.

,correspondent Banking' policy in this regard was approved at the Board

Bank,s
Meeting held on ol .03.2013. (lnternational Division's Memorandum No.
INTL(FBD)TSN:12-13:98 dated 17-01-2013)'

26. KYC.AML COMPLIANCE AT FOREIGN CENTERS

Thecenterspecificpolicyinrespectofvariousproducts/workareas'compliance
standards to meet KYC/AMUCFT measures being the primary requirement, its
formulation will consider adoption of various applicable laws / rules/regulations /
industry level best practices, stringent of host country and home country, for different
products or seryices rendered by the bank at the center. The chief Executive /
Branch Head of the center / Branch will identify / authorize office(s) in the Branch
/
center to formulate / undertake drafting of center specific KYC/AMUCFT policy for
annual review taking into account all these aspects'

(a) The Chief Executive at each overseas center is responsible for implementation
of the KYC-AML-CFT compliance function in the concerned center / territory. A
compliance officer (co) shall be posted at each overseas establishment.
Preferably a local officer having knowledge of compliance functions as well
conversant with local laws and also acceptable to Local Regulators shall be
recruited / posted for the purpose. However, lndia Based ofticers may also be
assigned such responsibilities as per consent of Local regulators. co will be the
responsible to ensure compliance of rules / regulations / norms on KYC-AML-
cFT. CO shall ac4uire knowledge of related statutory and regulatory guidelines
prevailing in the territory / other countries and also bank's internal guidelines,
general or specific for the center/ branch.

(b) Before the policy being approved for ado ption and implementation, The Chief
Executive at the center will fu to put in place a system for scrutiny /
review of the KYC/AMUC Branch / Center level c,omPliance
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 committee / risk management committee having the compliance officer and/or
concurrent auditor as membe(s).

(c) Further, in order to meet the challenges of dynamisms iJt global regulatory
frameworks, ensuring coverage of all KYC-AML-CFT requirements in the policy,
the Chief Executive of the center will ensure vetting of the policy through a
locally reputed professional firm at the time of formulation of the new policy or at
least once on each alternate year for annual review. The Branch will have to
obtain a certificate of confirmation from the professional firm in effect of vetting
'the policy
of and confirming above requirement. However, in case of review,
where there will be no major regulatory changes or regulatory examination /
audit recommendations during the review year, such vetting may be waived by
The Chief Executive with proper noting.

(d) The compliance officer (co) will monitor implementation of the KYC-AML-CFT
policy in the branch / center and report the findings while submitting periodical
compliance reports to the General Manager & chief compliance ofilcer (GM &
CCo),HeadofficeindependentlywithwhomCoshallberesponsibleto
maintain a dotted line reporting. As a part of this exercise, he /she will also
ensure to include KYC-AML-CFT issues in his/her overall compliance testing to
be undertaken periodically preferably at quarterly intervals'

27. Period for presenting payment instrumenG

Paymentofcheques/drafts/payorders/banker,scheques,iftheyarepresented
beyond the period of three months from the date of such instruments, shall not
be
made.

28. Collection of Account Payee Cheques

Account payee cheques for any person other than the payee constituent shall not be
collected. Banks shall, at their option, collect account payee cheques drawn for an
amount not exceeding rupees fifty thousand to the account of their customers who
are co-operative credit societies, provided the payees of such cheques are the
constituents of such co-operative credit societies'

29. Gustomer Education/Employee's training/Hiring of Employees:

(a) Customer Education:

lmplementation of KYC ires us to demand certain information
from the customers whi nal nature or which have hitherto
Ao!td M..U no
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 never been called for. This can sometimes lead to questioning by the customers
as to the motive and purpose of collecting such information. lt is, therefore,
necessary to prepare specific literature/pamphlets etc. so as to educate the
customers of the objectives of the KYC programme. Necessary guidelines in this
regard are issued by Compliance Department, KYC/AML cell from time to time.

(b) Employee Training:

Bahk has planned to arrange at least 1/2 sessions on KYC /AML measures
mdndatorily in each training programme being conducted in all our Staff Training
Colleges so that the staff members are adequately trained in these area of
concern. The training guides the staff to understand fully the rationale behind the
KYC/AMUCFT policies and implement the same consistently. The Staff Training
Colleges have been instructed to ensure compliance in the matter'

(c) Hiring of Employees:

KYC/AMUCFT measures have been prescribed to ensure that criminals are not
allowed to misuse the banking channels. lt is, therefore, necessary that
adequate screening mechanism is put in place by the Bank as an integral part of
the recruitmenvhiring process of personnel. Necessary inputs in this regard have
been incorporated in Bank's HR Policy'

30. There are FIVE enclosures to the present policy as under:

Annexure I As per RBI Master Direction 2016 va rious 'terms' have been
defined with meaning assigned to them. These 'Terms' are given
as - Definitions
Annexure 2 List of KYC documents required to be obtained for various tYPes
of accounts ( as per recent amendments to the PML Act, 2002)
Annexure 3 List of circulars/circular letters on KYC/AMUCFT issued
subseq uent to the approval of last policy on 27 .6.2016
Annexure 4 lndicative list of non-financial alert scena rios(i.e. offline alert
scenarios) issued by IBA
Annexure 5 List of the Forty FATF recommendations issued in 2012
Annexure 5 Government Order on Procedure for lmplementat ion of Section
51A of The Unlawful Activities (Prevention) Act' 1967

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 ANNEXURE 1

Definitions

ln these Directions, unless the context otheruise requires, the terms herein shall bear
the meanings assigned to them below:

(a) Terrns bearing meaning assigned in Prevention of Money-Laundering Act' 2002

and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005:
(i) ?cf and "Rules" means the Prevention of Money-Laundering Act, 2OO2 and
the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005'
respectively and amendments thereto.
(ii) Beneficial Owner (BO)
1) Where the customer is a company, the beneficial owner is the natural
person(s), who, whether acting alone or together, or through one or more
juridical person, has/have a controlling ownership interest or who
exercise control through other means.

Exptanation- For the purpose of this sub'clause-

c "Controlting ownership interest' means ownership of/entitlement to
more than 25 per cent of the shares or capital or profits of the
company.
. "Control" shall include the ight to appoint majoity of the directors
or to control the management or policy decr'srbns including by
vidue of their
. shareholding or management rights or shareholders agreements
or voting agreements.
2) Where the customer is a partnership firm, the beneficial owner is the
natural person(s), who, whether acting alone or together, or through one
or more juridical person, has/have ownership of/entitlement to more than
15 per cent of capital or profits of the partnership.
3) Where the customer is an unincorporated association or body of
individuals, the beneficial owner is the natural person(s)' who, whether
acting alone or together, or through one or more juridical person,
has/have ownership of/entitlement to more than 15 per cent of the
property or capital or profits of the unincorporated association or body of
individuals.

4) Where the customer is a trust, the identification of beneficial owner(s)

shall include identification of the author of the trust, the trustee, the
beneficiaries with 15olo or more interest in the trust and any other natural
person exercising ultimate effective control over the trust through a chain
of control or ownership.

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(iii) 'CentralKYC Records Registry' (CKYCR) means an entity defined under
Rule 2(1)(aa) of the Rules, to receive, store, safeguard and retrieve the KYC
records in digital form of a customer.

(iv) 'Designated Director" means a person designated by the RE to ensure

overall compliance with the obligations imposed under chapter lV of the PML
Act and the Rules and shall include:-
1) the Managing Director or a whole-time Director, duly authorized by the
" Board of Directors, if the RE is a company,
2) the Managing Partner, if the RE is a partnership firm,
3) the Proprietor, if the RE is a proprietorship concern,
4) the Managing Trustee, if the RE is a trust,
5) a person or individual, as the case may be, who controls and manages
the affairs of the RE, if the RE is an unincorporated association or a body
of individuals, and
6) a person who holds the position of senior management or equivalent
designated as a 'Designated Director' in respect of Cooperative Banks
and Regional Rural Banks.

Explanation. - For the purpose of this clause, the terms "Managing Director"
and 'Whole-time Director" shall have the meaning asstgned to them in the
Companies Act, 2013.

(v) "Non-profit organisations" (NPO) means any entity or organisation that is

registered as a trust or a society under the Societies Registration Act, 1860
or any similar State legislation or a company registered under Section 8 of
the Companies Act, 2013.

(vi) "Officially valid document' (OVD) means the passport, the driving licence, the
Permanent Account Number (PAN) Card, the Vote/s ldentity Card issued by
the Election Commission of lndia, job card issued by NREGA duly signed by
an officer of the State Government, letter issued by the Unique ldentification
Authority of lndia containing details of name, address and Aadhaar number.

Explanation: Customers, at their option, shall submit one of the six OVDs for
proof of identity and proof of address.
Provided that where 'simplified measures' are applied for verifying the identity
of the customers the following documents shall be deemed to be OVD:
1) identity card with applicant's photograph issued by Cenhal/ State
Government Departments, Statutory/ Regulatory Authorities, Public
Sector Undertakings, Scheduled Commercial Banks, and Public
Financial lnstitutions;
2) Letter issued by a Gazetted officer, with a duly attested photograph of the
person.

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 Provided further that where 'simplified measures' are applied for verifying,
for the limited purpose of, proof of address the following additional
documents are deemed to be OVDs :
1) Utility bill, which is not more than two months old, of any service provider
(electricity, telephone, post-paid mobile phone, piped gas, water bill);
2) Property or Municipal Tax receipt;
3) Bank account or Post Office savings bank account statement;
4) Pension or family Pension Payment Orders (PPOs) issued to retired
employees by Government Departments or Public Sector Undertakings,
' if they contain the address;
. 5) Letter of allotment of accommodation from employer issued by State or
Central Government departments, statutory or regulatory bodies, public
sector undertakings, scheduled commercial banks, financial institutions
and listed companies. Similarly, leave and license agreements with such
employers allofting official accommodation; and
6) Documents issued by Government departments of foreign jurisdictions or
letter issued by Foreign Embassy or Mission in lndia.

(vii) .Person" has the same meaning assigned in the Act and includes:
1) an individual,
2) a Hindu undivided family,
3) a company,
4) a firm,
'5) an association of persons or a body of individuals, whether incorporated
or not,
6) every artificial juridical person, not falling within any one of the above
persons (1 to 5), and
7) any agency, office or branch owned or controlled by any of the above
persons (1 to 6).

(viii)"Principal Officer' means an officer nominated by the RE, responsible for

furnishing information as per rule 8 of the Rules.

(ix) "Suspicious transaction" means a "transaction' as defined below, including

an attempted transaction, whether or not made in cash, which, to a person
acting in good faith,:
1) gives rise to a reasonable ground of suspicion that it may involve
proceeds ofan offence specified in the Schedule to the Act, regardless of
the value involved; or
2) appears to be made in circumstances of unusual or unjustified
complexity; or
3) appears to not have economic rationale or bona-fide purpose; or
4) gives rise to a reasonable ground of suspicion that it may involve
financing of the activities relating to terrorism.

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 Explanation: Transaction involving financing of the activities relating to
tenoism includes transaction involving funds suspecfe d to be linked or
related to, or to be used for tenoism, tenoist acts or by a terrorist, terrorist
organization or those who ftnance or are aftempting to finance tenoism.

(x) A 'Small Accounf means a savings account in which:

1) the aggregate of all credits in a financial year does not exceed rupees
one lakh;
;;2) the aggregate of all withdrawals and transfers in a month does not
. exceed rupees ten thousand; and
3) the balance at any point of time does not exceed rupees fifty thousand.

(xi) "Transaction' means a purchase, sale, loan, pledge, gift, transfer, delivery or
the arrangement thereof and includes:
1) opening of an account;
2) deposit, withdrawal, exchange or transfer of funds in whatever currency,
whether in cash or by cheque, payment order or other instruments or by
electronic or other non-physical means;
3) the use of a safety deposit box or any other form of safe deposit;
4) entering into any fiduciary relationship;
5) any payment made or rec€ived, in whole or in part, for any contractual or
other legal obligation; or
6) establishing or creating a legal person or legal arrangement.

(b) Terms bearing meaning assigned in this Directions, unless the context otherwise
requires, shall bear the meanings assigned to them below:
(i) "Common Reporting Standards' (CRS) means reporting standards set for
implementation of multilateral agreement signed to automatically exchange
information based on Article 6 of the Convention on Mutual Administrative
Assistance in Tax Matters.
(ii) "Customer' means a person who is engaged in a financial transaction or
activity with a Regulated Entity (RE) and includes a person on whose behalf
the person who is engaged in the transaction or activity, is acting.
(iii) "Walk-in Customer' means a person who does not have an account based
relationship with the RE, but undertakes transactions with the RE.
(iv) 'Customer Due Diligence (CDD)' means identifying and verifying the
customer and the beneficial owner using 'Officially Valid Documents' as a
'proof of identity' and a 'proof of address'.
(v) "Customer identification" means undertaking the process of CDD.
(vi) "FATCA' means Foreign Account Tax Compliance Act of the United States of
America (USA) which, inter alia, requires foreign financial institutions to
report about financial accounts held by U.S. taxpayers or foreign entities in
which U.S. taxpayers hold a substantial ownership interest.

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(vii) "lGA' means lnter Governmental Agreement between the Governments of
lndia and the USA to improve international tax compliance and to implement
FATCA of the USA.
(viii) 'KYC Templates" means templates prepared to facilitate collating and
reporting the KYC data to the CKYCR, for individuals and legal entities.
(ix) "Non-face-to-face customers" means customers who open accounts without
visiting the branch/offices of the REs or meeting the officials of REs.
(x) i'On-going Due Diligence" means regular monitoring of transactions in
'accounts to ensure that they are consistent with the customers' profile and
. source of funds.

(xi) "Periodic Updation" means steps taken to ensure that documents, data or
information collected under the CDD process is kept up-to-date and relevant
by undertaking reviews of existing records at periodicity prescribed by the
Reserve Bank.
(xii) 'Politically Exposed Persons" (PEPs) are individuals who are or have been
entrusted with prominent public functions in a foreign country, e.9., Heads of
States/Governments, senior politicians, senior governmenUjudicial/military
ofiicers, senior executives of state-owned corporations, important political
party officials, etc.
(xiii) "Regulated Entities" (REs) means
1) all Scheduled Commercial Banks (SCBs)/ Regional Rural Banks (RRBs)/
Local Area Banks (LABs)/ All Primary (Urban) Co-operative Banks
(UCBs) /State and Central Co-operative Banks (StCBs / CCBs) and any
other entity which has been licenced under Section 22 of Banking
Regulation Act, 1949, which as a group shall be referred as'banks'
2) All lndia Financial lnstitutions (AlFls)
3) All Non-Banking Finance Companies (NBFC)s, Miscellaneous Non-
Banking Companies (MNBCS) and Residuary Non-Banking Companies
(RNBCS).
4) All Payment System Providers (PSPs)/ System Participants (SPs) and
Prepaid Payment lnstrument lssuers (PPl lssuers)
5) All authorised persons (APs) including those who are agents of Money
Transfer Service Scheme (MTSS), regulated by the Regulator.
(xiv) 'Simplified procedure" means the procedure for undertaking customer due
diligence in respect of customers, who are rated as low risk by the RE and
who do not possess any of the six ofllcially valid documents, with the
alternate documents prescribed under the two provisos of Section 3(a)(vi) of
this Directions.
(xv) "Shell banK' means a bank which is incorporated in a country where it has no
physical presence and is unaffiliated to any regulated financial group.
(xvi) 'Wire transfer' means a transaction canied out, directly or through a chain of
transfers, on behalf of an originator person (both natural and legal) through a
bank by electronic means with a view to making an amount of money
available to a beneficiary perso a bank.

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 (xvii) 'Domestic and cross-border wire transfe/': When the originator bank and the
beneficiary bank is the same person or different person located in the same
country, such a transaction is a domestic wire transfer, and if the 'originator
bank' or 'beneficiary bank'is located in different c,ountries such a transaction
is cross-border wire transfer.

(c) All other expressions unless defined herein shall have the same meaning as have
been assigned to them under the Banking Regulation Act or the Reserve Bank of
lndia;;Act, or the Prevention of Money Laundering Act and Prevention of Money
Laundering (Maintenance of Records) Rules, any statutory modification or re-
enactment thereto or as used in commercial parlance, as the case may be.

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 ANNEXURE 2

KYC DOCUMENTS FOR VARIOUS TYPES OF ACCOUNTS:

Kindly note importantly that
(i) Copies of KYC documents to be obtained duly signed by the applicant and
verified from the original (ii) Wherever the proof given has BOTH the identity as welt
as current address in a SINGLE DOCUMENT, branch may obtain only that SINGLE
documentas identity and address proof;
Sr.No. Particulars
1 As a proof of identiW and address, at least one of the following
documents is
obtained for verification along with a copy in respect of lndividual,
Proprietor, each Joint account holder / each Partner / each Director / each Trustee
/ each HUF Member, each Office Bearer, each other Authorized signatory/PA
holder, if any, in every new account:
1. Passport [within validity period];
2. PAN Card;
3. Voter's ldentity Card;
4. Driving Licence [within validity periodl;
5. Job Card issued by NREGA duly signed by on officer of the State
Govt;
6. Aadhaar Card
2 Recent photograph (passport size) of lndividual / Proprietor / each Joint account
/ each Director / each Trustee / each HUF Member, each
holder / each Partner
Office Bearer, each other Authorized signatory/ PA holder, if any, should be
obtained in every new account.
ln all the tuDes of accounts listed below. i-e. in Painershin Tflrsts Comnanie.s Sociefv
etc. all documents should be examined in the orisinal and cooies thereof, dulv certified bv the
Propietor. Painers. Companv Chairman etc.. should be held on record:
3 ln case of every Proprietorship Firm account, the following documents are
obtained, in addition to documents listed above in Sr. Nos. 1 & 2:
a. Proprietorship letter in Banks'format;
b. Power of attorney, if any granted by the Proprietor;
Additionally, in case of every etorshi p Firm, accounl, as a rule ANY TWO
of the following documents ined,:
(a) Registration certifica
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ilri eNo 8ECf,E e^I
Page 1of4
Sr.No. Particulars
(b) Certificate/licence issued by the municipal authorities under Shop and
Establishment Act.
(c) Sales and income tax returns. (d) CST /AT certificate.
(e) Certificate/registration document issued by Sales Tax/Service TaxlProfessional
Tax authorities
(f) Licence/certificate of practice issued in the name of the proprietary concern by
any professional body incorporated under a statute.
(g) Complete lncome Tax Return (not just the acknowledgement) in the name of the
sole proprietor where the firm's income is reflected, duly
authenticated/acknowledged by the lncome Tax authorities.
(h) Utility bills such as electricity, water, and landline telephone bills.
(i) IEC (lmporter Exporter Code) issued to the proprietary concern by the office of
DGFT / Licence/certificate of practice issued in the name of the proprietary concern
by any professional body incorporated under a statute.
/n cases where the branc hes are satisfied that it is not oossible to fumish two of the
documents listed at (il to (xl above. thev would have the discretion to acceot onlv
one of those nfs as roof. ln the branches would have
to undertake contact ooint veification. collect such information as would be
reauired to estab the existence of such firm. confirm. cla rifu and satisfu
themselves that the bus,ness activitv has been veified from the address of the
oropietarv concem. /f r.s a/so clarified b v RBI that the list of reoisteino authoities
indicated is onlv illustrative and the refore includes licence / ceftificate of oractice
issued in the name of the propieta concern bv anv orofessional bodv
incorporated under a statute, as one of the documents to orove the activitv of the
propietary concem.
The above mentioned documents { except No.ix } should be in the name of
the proprietary concern. ln respect of all existing sole proprietary accounts
also, Branches should obtain the above documents immediately, in case not
obtained earlier"
4. ln case of every new Partnership Firm account, the following documents are to
be obtained, in addition to documents in addition to documents listed above in Sr.
No's. 1 & 2:
a) Partnership Lefter in B
b) Registration certificate

Page 2 of4
i0r80 SCf,EITMI
Sr.No. Particulars
c) Partnership deed;
d) Power of attorney, if any, granted by the firm to transact business on its behalf;
e) An officially valid document (i.e. documents listed at Sr. Nos 1 & 2 above) in
respect of the person holding an attorney to transact on its behalf;
5 ln case of every new Trust account, the following documents are to be obtained, in
addition to the documents at Sr. Nos. 1 & 2 above):
a) Registration certificate, if registered,;
b) Trust deed;
c) Resolution for opening and operating the account, signed by all the Trustees;
d) A list of the names of the trustees with their addresses ;

e) An officially valid document (i.e. documents listed at Sr. Nos. 1 & 2 above) to
identify the those holding Power of Attorney;
6 Proof of ldentity and Address required at the time opening an account of
Unincorporated association or body of individuals (in addition to the
documents listed at Sr.Nos, 'l & 2 above):
a) Resolution of the managing body of such association or body of individuals;
b) Power of attorney, if any, granted to transact on its behalf;
c) An officially valid document in respect of the person holding an attorney to
transact on its behalf (i.e. documents listed at Sr.Nos.1 & 2 above); and
d) Such information as may be required by the bank to collectively establish the
legal existence of such an association or body of individuals.
7 ln case of every new Company, the following documents are to be obtained, in
addition to documents in addition to documents listed above in Sr. No's. 1 & 2:
a) Certificate of incorporation;
b) Memorandum and Articles of Association;
c) A resolution of the Board of Directors to open the account and conveying
authority to operate the account;
d) Power of attorney, if any, granted by the Company to transact on its behalf;
d) An officially valid document (i.e. documents listed in Sr. Nos. 1 & 2 above) in
respect of person holding a Power of Attorney;
e) Certificate of Commencement of Business (for Public Ltd. Cos.)
f) List of present Directo rs of
g) A list of authorised ir signatures duly authorised by the
Chairman / Secretary;

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80180 8ECNEIMII
 Sr.No. Particulars
8 ln the case of every Society / Association / CIub the following documents should
be obtained, in addition to the documents listed at Sr. No. 1 & 2 above:
a) Certificate of Registration, if registered;
b) Memorandum of Association;
c) Rules, regulations and bye-laws;
d) Committee resolution for opening and operating the account;
e) A list of authorised signatories with their signatures duly authorised by the
Chairman / Secretary;
9 ln the case of every Hindu Undivided Family (HUF), the following documents
should be obtained, in addition to the documents listed at Sr. Nos. 1 & 2 above:
a) Declaration from Karta;
b) Joint Hindu family letter signed by the Karta and all the major co-parceners;

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 ANNEXURE 3

Branch Circulars/Circulars letter issued on KYC/AML/CFT subsequent to

approva! of last Policy on KYC/AML/CFT by the Board on 27.06.2015

Sr. Br Date Content

No Circular/Gir.
Letter No
1 109/'t 31 07-08.2015 officially valid document 'Passport' and capturing full
details in CUMM/FINCALE
2 't 09/139 24.09.2015 Amendment to Prevention of Money Laundering
(Maintenance of Records) Rules,2005 additional
-
documents for the limited purpose of 'Proof of address'
3 09/156
't 13.10.2015 Monitoring of Transactions in Accounts
4 109t167 10.11.2015 Amendment to Prevention of Money Laundering
(Maintenance of Records) Rules, 2005
-Submitting
'Ofiicialty Valid Documents' - Change in name on
account of marriage or otherwise
5 109t221 04.03.2016 Revised Compliance Function Policy
6 109t226 17.03.2016 Compliance Rules - KYC / AML / CFT (CR-12) - Monthly
Updation of the Rules
7 109/230 2S.03.2016 Compliance Rules - FEMA (CR-15) - Quarterly Updation
of the Rules
8 110t040 07.05.2016 Periodical Updation of KYC (RE-KYC).
9 1 10/048 24.O5.2016 Customer Profile Sheet (CPS)Revision in FORMAT
Addition of essential items / information
10 110152 27.05.2016 Savings Accounts in the name of ineligible Entities Being
maintained in our Branches - immediate closure /
conversion to Current Account REQUIRED
11 1 10/063 o4.o7.2016 Reporting of Suspicious Transaction Based on Offline
Alerts Non- Financial indicators
12 110/100 07.09.2016 Online Screening of Customers (identity ) against
Banned Entities & Politically Exposed person ( PEP) list
't3 't10t172 08.12.2016 Requirement of Customer Due Diligence and need for
maintenance of records
14 110t179 19.12.2016 Compliance to Provisions of Master Directions on KYC
Amendments Notified by RBI in respect of Operations of
- Small Accounts
- PMJDYAccounts
- KYC Compliant Account without PAN or Form 60

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 Annexure 4
Non- Financial Alert lndicators
Sr. No. Alert lndicator Code Alert lndicator
1 cv 1.1 Customer abandoned the transaction for the KYC
requirement
2 cv 2.1 Customer offered false or forged ideitification documents
3 cv 3.1 Address non-existent at the time of account opening
4 cv 3.2 Address found to be wrong at the time of account opening
5 cv 4.1 Complex structure created to avoid identification of beneficial
owner
6 L42.1 Customer being investigated for select criminal offences
7 MR 1.1 Adverse media report for criminal activities
8 MR 2.1 Adverse media report about terrorist activities of customer
I EL 1.1 Customer abandoned the transaction when questioned
10 EL2.1 Customer body language based alert
11 EL 2.3 Customer provides inconsistent information
12 EL 3.1 Customer appears to be acting on behalf while posing in-
person
13. EL 4.1 Customer avoiding nearer branches without rationale
14 8L4.2 Customer offers different identification on different occasions
15 EL 4.3 Customer purposely wants to avoid reporting
to EL4.4 Customer is not able to explain the source of funds
17 EL 5.1 Transaction is unnecessarily made to be complex
18 EL5.2 Transaction has no economic rationale
19 EL 5.3 Transaction inconsistent with business/profile
20 PC 1.1 Complaints received from public
21. BA 1.1 Alerts raised by agent
22 8A.1.2 Alert raised by other institution
23 9. Trade Based Money Funds received but goods not exported - advance for exports
Launderinq
24 10 .Trade Based Money Funds sent out but goods not imported - advance for imports.
Laundering
25 16.Trade Based Money Underlying goods or services not in line with custome/s profile
Laundering and declared business.
26 18.Trade Based Money Transactions related to acquisition or sale of intangibles like
Launderinq PlN, +codes, specialized software, etc.
27 20.Trade Based Money High proportion of high seas sales/merchanting trade/post
Launderinq parcels receipts.
28 21.Trade Based Money Transactions involving third parties which may not be contract
Launderinq parties (consignee and remitter are different).
29 27.f rade Based Money Description of goods provided is vague.
Launderinq
30 28.Trade Based Money Pl{E*iAd@Kuments submitted look suspicious.

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 Annexure 4
Non- Financial Alert lndicators
Sr. No. Alert lndicator Code Alert lndicator
Laundering
31 29.Trade Based Money Substantial inconsistencies between the information originally
Laundering supplied and that contained in the documents.
32 30.Trade Based Money Suspected discrepancies between description of goods on
Laundering transport document vis-ir-vis invoice/other documents.
33 lmport payments being made against old bills after lapse of
34.Trade Based Money
considerable period of time from impod of goods, without
Laundering
appropriate iustification and documentation.
34 36.Trade Based Money Goods transhipped through high risk jurisdictions for no
Laundering apparent reason.
35 Amounts of money transfer canied out by natural persons and
38.Trade Based Money
legal entities are multiples of 100/1 ,000/10,000/100,000
Laundering
USD/EUR/National currency.
36 40.Trade Based Money Originator of transfer not able to provide documents on the
Laundering source of money.
37 43.Trade Based Money Customer selling items on a commercial website and receiving
Launderinq money via internet payment service provider.
38 44.Ttade Based Money Originator/beneficiary information missing in wire transfers
Laundering
39 Use of repeatedly amended or frequently extended letters of
46.Trade Based Money
credit without reasonable justification or for reasons like
Laundering
chanqes of beneficiary or location.
40 47.Frade Based Money Accounts funded by negotiable instruments (such as travelers'
. Laundering cheques, cashiefs cheques, etc.) in round denominations.
41 48.Trade Based Money lmporter of goods not from the same country from where wire
Laundering (pavment for import) oriqinated.
42 50.Trade Based Money Packing inconsistent with the commodity or shipping method
Launderinq
43 53.Trade Based Money Booking of ticket abroad and subsequent cancelling and
Launderinq payment made to third parU.
44 55.Trade Based Money Forex for medical treatment as per prescribed limit but availed
Launderinq multiple times by the same individual in a year
45 A customer deviates significantly from its historical pattern of
58.Trade Based Money
trade activity (i.e. in terms of markets, monetary value, and
Laundering
frequencv of transactions, volume, or merchandise type).
46 Transacting parties appear to be affiliated, conduct business
59.Trade Based Money
out of a residential address, or provide only a registered
Laundering
agent's address.
47 60.Trade Based Money The LC contains non-standard clauses or phrases or has
Laundering unusual characteristics.

CV Customer Verification
LQ Law Enforcement Agency Query
MR Media Reports
EL Employee Level
PC Public Complaint
BA Business Associate

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 Annexure 5

THE FO RTY FATF RECOMMENDATIONS

A - AMUCFT POLICIES AND COORDINATION

1 - Assessing risks & applying a risk-based approach

2 - National cooperation and coordination

B - MONEY LAUNDERING AND CONFISCATION

3 - Money laundering offence

4 - Confiscation and provisional measures

C - TERRORIST FINANCING AND FINANCING OF PROLIFERATION

5 - Tenorist financing offence

6 - Targeted financial sanctions related to terrorism & terrorist financing

7 - Targeted financial sanctions related to proliferation

8 - Non-profit organisations

D - PREVENTIVE MEASURES

I - Financial institution secrecy laws

Customer due diligence and record keeping

10- Customer due diligence

11 - Record keeping

Additional measures for specific customers and activities

12 -Politically exposed persons

1 3 -Correspondent banking

l4 - Money or value transfer services

l5 -New technologies

16 - Wire transfers

Reliance, Controls and Financial Groups

17 - Reliance on thirci lra'i;es

18 - lnternal controls and foreig n branches s

19 - Higher-risk countries
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21 -Tipping-off and confidentiality

Designated non-financial Businesses and Professions (DNFBPS)

2i - DNrePs: Customer due diligence

23 - DNFBPS: Other measures

E- TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND

ARRANGEMENTS

24 - Transparency and beneficial ownership of legal persons

25 - Transparency and beneficial ownership of legal arrangements

F- POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER

INSTITUTIONAL MEASURES

Regulation and Superuision

26 - Regulation and supervision of financial institutions

27 - Powers of supervisors

28 - Regulation and supervision of DNFBPS

Operational and Law Enforcement

29 - Financial intelligence units

30 - Responsibilities of law enforcement and investigative authorities

31 - Powers of law enforcement and investigative authorities

32 - Cash couriers

General Requirements

33 - Statistics

34 - Guidance and feedback

Sancfions

35 - Sanctions

G - INTERNATIONAL COOPERATION

36 - lnternational instruments

37 - Mutual legal assistance

38 - Mutual legal assistance: freezing and confiscation *

39 - Extradition
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 Annexure 6

Government Order on Procedure for lmplementation of Section 51A of The

Unlawful Activities (Prevention) Act, {967
File No.17015/10/2002-lS-Vl Government of lndia Ministry of Hqme Affairs lnternal
Security - I Division
New Delhi, Dated 27th August, 2009
To, 1. Governor, Reserve Bank of lndia, Mumbai 2. Chairman, Securities & Exchange
Board of lndia, Mumbai 3. Chairman, lnsurance Regulatory and Development Authority,
Hyderabad 4. Foreign Secretary, Ministry of External Affairs, New Delhi 5. Finance
Secretary, Ministry of Finance, New Delhi 6. Revenue Secretary, Department of
Revenue, Ministry of Finance, New Delhi 7. Director, lntelligence Bureau, New Delhi 8.
Additional Secretary, Department of Financial Services, Ministry of Finance, New Delhi
9. Chief Secretaries of all States / Union Territories
Order
Procedure for lmplementation of Section 51A of The Unlawful Activities
(Prevention) Act, 1967
The Unlawful Activities (Prevention) Act, 1967 (UAPA) was amended and notified on
31.12.2008, which, inter-alia, inserted Section 51A to the Act. Section 51A reads as
under :

"51A. For the prevention of, and for coping with tenorist activities, the Central
Government shall have power to -
(a) freeze, seize or attach funds and other financial assets or economic resources held
by, on behalf of or at the direction of the individuals or entities Listed in the Schedule to
the Order, or any other person engaged in or suspected to be engaged in terrorism;
(b) prohibit any individual or entity from making any funds, financial assets or economic
resources or related services available for the benefit of the individuals or entities Listed
in the Schedule to the Order or any other person engaged in or suspected to be
engaged in terrorism;
(c) prevent the entry into or the transit through lndia of individuals Listed in the Schedule
to the Order or any other person engaged in or suspected to be engaged in terrorism",
The Unlawful Activities (Prevention) Act define "Order" as under :
"Order" means the Prevention and Suppression of Terrorism (lmplementation of
Security Council Resolutions) Order, 2007, as may be amended from time to time.
ln order to expeditiously and effectively implement the provisions of Section 51A, the
following procedures shall be followed :-
Appointment and Communication of Details of UAPA Nodal Officers
2. As regards appointment and communication of details of UAPA nodal officers -
(i) The UAPA nodal officer for lS-l division would be the Joint Secretary (lS.l), Ministry of
Home Affairs. His contact details are 011-23092736 (Tel), 01 1-23092569 (Fai) and
jsis@nic.in (e-mail id).
(ii) The Ministry of External affairs, Department of Economic affairs, Foreigners Division
of MHA, FIU-IND; and RBl, SEBI, IRDA (hereinafter referred to as Regulators) shall
appoint a UAPA nodal officer and communicate the name and contact details to the lS-l
Division in MHA.
(iii) The States and UTs should appoint a UAPA nodal officer preferably of the rank of
the Principal Secretary / Secretary, H ment and communicate the name and
contact details to the lS-l Division i
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(iv) The lS-l Division in MHA would maintain the consolidated list of all UAPA nodal
officers and forward the list to all other UAPA nodal officers.
(v) The RBl, SEBI, IRDA should forward the consolidated list of UAPA nodal offic€rs to
the Banks, stock exchanges / depositories, intermediaries regulated by SEBI and
insurance companies respectively
(vi) The consolidated list of the UAPA nodal officers should be ciriulated to the nodal
ofiicer of lS-l Division of MHA in July every year and on every change. Joint Secretary
(lS-l), being the nodal officer of lS-l Division of MHA, shall cause the amended list of
UAPA nodal officers to be circulated to the nodal officers of Ministry of External Affairs,
Department of Economic affairs, Foreigners Division of MHA, RBl, SEBI, IRDA and FIU-
IND,
Communication of the List of Designated lndividuals / Entities
3. As regards communication of the list of designated individuals / entities -
(i) The Ministry of External Affairs shall update the list of individuals and entities subject
to UN sanction measures on a regular basis. On any revision, the Ministry of External
Affairs would electronically fonivard this list to the Nodal officers in Regulators, FIU-IND,
lS-l Division and Foreigners' Division in MHA. (ii) The Regulators would forward the list
mentioned in (i) above (referred to as designated lists) to the banks, stock exchanges /
depositories, intermediaries regulated by SEBI and insurance companies respectively.
(iii) The lS-l Division of MHA would forward the designated lists to the UAPA nodal
officer of all States and UTs.
(iv) The Foreigners Division of MHA would forward the designated lists to the
immigration authorities and security agencies.
Regarding Funds, Financial Assets or Economic Resources or related Services
held in the Form of Bank Accounts, Stocks or lnsurance Policies etc.
4" As regards funds, financial assets or economic resources or related services held in
the form of bank accounts, stocks or lnsurance policies etc., the Regulators would
forward the designated lists to the banks, stock exchanges / depositories, intermediaries
regulated by SEBI and insurance companies respectively. The RBl, SEBI and IRDA
would issue necessary guidelines to banks, stock exchanges / depositories,
intermediaries regulated by SEBI and insurance companies requiring them to -
(i) Maintain updated designated lists in electronic form and run a check on the given
parameters on a regular basis to veriry whether individuals or entities listed in the
schedule to the Order, herein after, referred to as designated individuals / entities are
holding any funds, financial assets or economic resources or related services held in the
form of bank accounts, stocks or lnsurance policies etc., with them.
(ii) ln case, the particulars of any of their customers match with the particulars of
designated individuals / entities, the banks, stock exchanges / depositories,
intermediaries regulated by SEBI and insurance companies shall immediately, not later
lhan 24 hours from the time of finding out such customer, inform full particulars of the
funds, financial assets or economic resources or related services held in the form of
bank accounts, stocks or lnsurance policies etc., held by such customer on their books
to the Joint Secretary (lS.l), Ministry of Home Affairs, at Fax No.01 1-23092569 and also
convey over telephone on 011-23092736. The particulars apart from being sent by post
should necessarily be conveyed on e-mail id :jsis@nic.in
(iii) The banks, stock exchanges / depositories, intermediaries regulated by SEBI and
insurance companies shall also send of the communication mentioned in (ii)

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above to the UAPA nodal officer of the state / UT where the account is held and
Regulators and FIU-IND, as the case may be.
(iv) ln case, the match of any of the customers with the particulars of designated
individuals / entities is beyond doubt, the banks, stock exchanges / depositories,
intermediaries regulated by SEBI and insurance companies would prevent designated
persons from conducting financial 38 transactions, under intim'ation to the Joint
Secretary (lS.l), Ministry of Home Affairs, at Fax No.011-23092569 and also convey
over telephone on 011- 23092736. The particulars apart from being sent by post should
necessarily be conveyed on e-mail id jsis@nic.in
(v) The Banks, stock exchanges / depositories, intermediaries regulated by SEBI and
insurance. companies, shall file a Suspicious Transaction Report (STR) with FIU-lND
covering all transactions in the accounts covered by paragraph (ii) above, carried
through or attempted as per the prescribed format.
5. On receipt of the particulars referred to in paragraph 3 (ii) above, lS-l Division of MHA
would cause a verification to be conducted by the State Police and / or the Cenhal
Agencies so as to ensure that the individuals / entities identified by the Banks, stock
exchanges / depositories, intermediaries regulated by SEBI and lnsurance Companies
are the ones listed as designated individuals / entities and the funds, financial assets or
economic resources or related services, reported by banks, stock exchanges /
depositories, intermediaries regulated by SEBI and insurance companies are held by
the designated individuals / entities. This verification would be completed within a period
not exceeding 5 working days from the date of receipt ofsuch particulars.
6. ln case, the results of the verification indicate that the properties are owned by or are
held for the benefit of the designated individuals / entities, an order to freeze these
assets under section 51A of the UAPA would be issued within 24 hours of such
verification and conveyed electronically to the concerned bank branch, depository,
branch of insurance company branch under intimation to respective Regulators and
FIU-IND. The UAPA nodal officer of lS-l Division of MHA shall also forward a copy
thereof to all the Principal Secretary / Secretary, Home Department of the States or
UTs, so that any individual or entity may be prohibited from making any funds, financial
assets or economic resources or related services available for the benefit of the
designated individuals / entities or any other person engaged in or suspected to be
engaged in terrorism. The UAPA nodal ofilcer of lS-l Division of MHA shall also forward
a copy of the order under section 51A, to all Directors General of Police /
Commissioners of Police of all states / UTs for initiating action under the provisions of
UnlaMul Activities (Prevention) Act.
The order shall take place without prior notice to the designated individuals / entities.
Regarding Financial Assets or Economic Resources of the Nature of lmmovable
Properties
7, lS-l Division of MHA would electronically fonrvard the designated lists to the. UAPA
nodal officer of all States and UTs with the request to have the names of the designated
individuals / entities, on the given parameters, verified from the records of the office of
the Registrar performing the work of regishation of immovable properties in their
respective jurisdiction. L ln case, the designated individuals / entities are holding
financial assets or economic resources of the nature of immovable property and if any
match with the designated individuals / entities is found, the UAPA nodal officer of the
state / UT would cause communi cation complete particulars of such individual /
entity along with complete details ts or economic resources of the
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 nature of immovable property to Joint Secretary (lS.l), Ministry of Home Affairs,
immediately within 24 hours at Fax No.01 1-23092569 and also convey over telephone
on 011-23092736. The particulars apart from being sent by post would necessarily be
conveyed on e-mail id :jsis@nic.in.
9. The UAPA nodal officer of the state / UT may cause such inquiry.to be conducted by
the State Police so as to ensure that the particulars sent by the Registrar performing the
work of registering immovable properties are indeed of these designated individuals /
entities. This verification would be completed within a maximum of 5 working days and
should be conveyed within 24 hours of the verification, if it matches with the particulars
of the designated individual / entity to Joint Secretary (lS-l), Ministry of Home Affairs at
the Fax, telephone numbers and also on the e-mail id given below.
10. A copy of this reference should be sent to Joint Secretary (lS.l), Ministry of Home
Affairs, at Fax No.011-23092569 and also convey over telephone on 011- 23092736.
The particulars apart from being sent by post would necessarily be conveyed on e-mail
id jsis@nic.in. MHA may have the verification also conducted by the Central Agencies.
This verification would be completed within a maximum of 5 working days.
1'1. ln case, the results of the verification indicate that the particulars match with those
of designated individuals / entities, an order under section 51A of the UAPA would be
issued within 24 hours, by the nodal officer of lSl Division of MHA and conveyed to the
concerned Registrar performing the work of registering immovable properties and to
FIU-IND under intimation to the concerned UAPA nodal officer of the state / UT.
The order shall take place without prior notice, to the designated individuals / entities.
12. Further, the UAPA nodal officer of the state / UT shall cause to monitor the
transactions / accounts of the designated individual / entity so as to prohibit any
individual or entity from making any funds, financial assets or economic resources or
related services available for the benefit of the individuals or entities Listed in the
Schedule to the Order or any other person engaged in or suspected to be engaged in
terrorism. The UAPA nodal officer of the state / UT shall upon coming to his notice,
transactions and attempts by third party immediately bring to the notice of the DGP /
Commissioner of Police of the State / UT for also initiating action under the provisions of
Unlawful Activities (Prevention) Act.
lmplementation of Requests Received from Foreign Countries under U.N.
Security Council Resolution 1373 ol 2001
'13. U.N. Security Council Resolution '1373 obligates countries to freeze without delay
the funds or other assets of persons who commit, or attempt to commit, terrorist acts or
participate in or facilitate the commission of terrorist acts; of entilies owned or conkolled
directly or indirectly by such persons; and of persons and entities acting on behalf of, or
at the direction of such persons and entities, including funds or other assets derived or
generated from property owned or conholled, directly or indirectly, by such persons and
associated persons and entities. Each individual country has the authority to designate
the persons and entities that should have their funds or other assets frozen.
Additionally, to ensure that effective cooperation is developed among countries,
countries should examine and give effect to, if appropriate, the actions initiated under
the freezing mechanisms of other countries.
14. To give effect to the requests of foreign countries under U.N. Security Council
Resolution '1373, the Ministry of External Affairs shall examine the requests made by
the foreign countries and forward it lly, with their comments, to the UAPA
nodal officer for lS-l Division for other assets.
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 15. The UAPA nodal officer of lS-l Division of MHA, shall cause the request to be
examined, within 5 working days, so as to satisfy itself that on the basis of applicable
legal principles, the requested designation is supported by reasonable grounds, or a
reasonable basis, to suspect or believe that the proposed designee is a terrorist, one
who finances terrorism or a terrorist organization, and upon his satisfaction, request
would be electronically forwarded to the nodal officers in Regulators,'FlU-IND and to the
nodal officers of the States / UTs. The proposed designee, as mentioned above would
be keated as designated individuals / entities.
16. Upon receipt ofthe requests by these nodal officers from the UAPA nodal officer of
lS-l Division, the procedure as enumerated at paragraphs 4lo 12 above shall be
followed.
The freezing orders shall take place without prior notice to the designated persons
involved
Procedure for Unfreezing of Funds, Financial Assets or Economic Resources or
related Services, of lndividuals / Entities lnadvertently affected by the Freezing
Mechanism upon Verification that the Person or Entity is not a Designated Person
17. Any individual or entity, if it has evidence to prove that the freezing of funds,
financial assets or economic resources or related services, owned / held by them has
been inadvertently frozen, they shall move an application giving the requisite evidence,
in writing, to the concerned bank, stock exchanges / depositories, intermediaries
regulated by SEBI, insurance companies, Regishar of lmmovable Properties and the
State / UT nodal officers. 18. The banks, stock exchanges / depositories, intermediaries
regulated by SEBI, insurance companies, Registrar of lmmovable Properties and the
State / UT nodal officers shall inform and forward a copy of the application together with
full details.of the asset frozen given by any individual or entity informing of the funds,
financial assets or economic resources or related services have been frozen
inadvertently, to the nodal officer of lS-l Division of MHA as per the contact details given
in paragraph 4 (ii) above, within two working days.
19. The Joint Secretary (ls-l), MHA, being the nodal officer for lS-l Division of MHA
shall cause such verification as may be required on the basis of the evidence furnished
by the individual / entity and if he is satisfied, he shall pass an order, within 15 working
days, unfreezing the funds, financial assets or economic resources or related services,
/
owned held by such applicant, under intimation to the concerned bank, stock
exchanges / depositories, intermediaries regulated by SEBI, insurance company and
the nodal ofticers of States / UTs. However, if it is not possible for any reason to pass
an Order unfreezing the assets within 15 working days, the nodal officer of lS-l Division
shall inform the applicant.
Communication of Orders under Section 51A of Unlawful Activities (Prevention)
Act
20. All Orders under section 51A of Unlawful Activities (Prevention) Act, relpting to
funds, financial assets or economic resources or related services, would be
communicated to all the banks, depositories / stock exchanges, intermediaries
regulated by SEBI, insurance companies through respective Regulators, and to all the
Registrars performing the work of registering immovable properties, through the state /
UT nodal officer by lS-l Division of MHA.
Regarding Prevention of Entry into or Transit through lndia
21. As regards prevention of entry transit through lndia of the designated
individuals, the Foreigners Divisio tt ll forward the designated lists to the
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immigration authorities and security agencies with a request to prevent the entry into or
the transit through lndia. The order shall take place without prior notice to the
designated individuals / entities.
22. fhe immigration authorities shall ensure strict compliance of the Orders and also
communicate the details of entry or transit through lndia of the designated individuals as
prevented by them to the Foreigners' Division of MHA.
Procedure for Communication of Compliance of Action taken under Section 51A
23. The nodal officers of IS-l Division and Foreigners Division of MHA shall furnish the
details of funds, financial assets or economic resources or related services of
designated individuals / entities frozen by an order, and details of the individuals whose
entry into lndia or transit through lndia was prevented, respectively, to the Ministry of
External Affairs for onward communication to the United Nations.
24. All concerned are requested to ensure strict compliance of this order.
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(D. Diptivilasa) Joint Secretary to Government of lndia

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