BANKING REGULATION

HIGH VALUE TRANSACTIONS:RBI LIMITS & REPORTING

Advocate Iranpreet Singh

February 14, 2025

19 min read

High value transactions are subject to stringent RBI regulations and reporting requirements under anti-money laundering laws. This comprehensive guide covers transaction limits, reporting obligations, compliance requirements, and legal implications for banks and customers.

TRANSACTION OVERVIEW

UNDERSTANDING HIGH VALUE TRANSACTIONS

High value transactions are financial transactions that exceed prescribed thresholds and require special monitoring, reporting, and compliance measures under the Prevention of Money Laundering Act (PMLA) and RBI regulations.

Key Definitions

High Value Transaction: Cash transactions exceeding ₹10 lakh or equivalent in foreign currency

Cash Transaction Report (CTR): Mandatory report for transactions above threshold

Suspicious Transaction Report (STR): Report for transactions suspected of money laundering

Reporting Entity: Banks, NBFCs, and other financial institutions

Regulatory Objectives

Prevent money laundering, terrorist financing, and track large cash movements

Ensure transparency in financial system

Scope of Coverage

All cash transactions, deposits, withdrawals, and currency exchanges

Includes both individual and series transactions

RBI LIMITS

RBI PRESCRIBED TRANSACTION LIMITS

Cash Transaction Reporting Limits

Transaction Type	Reporting Threshold	Applicable To
Cash Deposits	₹10 lakh and above	All accounts
Cash Withdrawals	₹10 lakh and above	All accounts
Currency Exchange	₹10 lakh equivalent	Foreign currency
Series Transactions	₹10 lakh cumulative	Within a month

Special Category Limits

Government Transactions

• Central/State government: No limit
• PSUs: Standard limits apply
• Local bodies: Standard limits apply
• Statutory corporations: Case-by-case

Banking Transactions

• Inter-bank transactions: Exempt
• RBI transactions: Exempt
• Clearing house: Exempt
• ATM cash loading: Standard limits

Business Transactions

• Corporate accounts: Standard limits
• Partnership firms: Standard limits
• Sole proprietorship: Standard limits
• Trusts/NGOs: Standard limits

Individual Accounts

• Savings accounts: Standard limits
• Current accounts: Standard limits
• NRI accounts: Standard limits
• Minor accounts: Standard limits

Transaction Aggregation Rules

Series Transaction Rules

• Multiple transactions by same person within a month
• Cumulative amount exceeding ₹10 lakh
• Includes all cash transactions across branches
• Both deposits and withdrawals counted

Connected Transaction Rules

• Transactions by related parties
• Same beneficial owner
• Structured to avoid reporting
• Suspicious pattern of transactions

Exemption Criteria

• Government treasury operations
• Inter-bank settlements
• RBI authorized transactions
• Specific regulatory exemptions

REPORTING REQUIREMENTS

MANDATORY REPORTING OBLIGATIONS

Types of Mandatory Reports

Cash Transaction Report (CTR)

• All cash transactions ≥ ₹10 lakh
• Monthly reporting to FIU-IND
• Includes series transactions
• Mandatory for all reporting entities

Suspicious Transaction Report (STR)

• Transactions suspected of money laundering
• No minimum threshold
• Within 7 days of suspicion
• Includes attempted transactions

Counterfeit Currency Report (CCR)

• Detection of counterfeit currency
• Immediate reporting required
• Police complaint mandatory
• FIU-IND notification

Cross Border Transaction Report (CBTR)

• International wire transfers
• Threshold: ₹5 lakh equivalent
• Both inward and outward
• Monthly reporting

Reporting Timelines & Procedures

CTR

Monthly Reporting

By 15th of following month to FIU-IND

STR

Within 7 Days

From date of suspicion arising

CCR

Immediate

Within 24 hours of detection

CBTR

Monthly Reporting

By 15th of following month

CTR FILING

CASH TRANSACTION REPORT FILING

CTR Filing Requirements

Mandatory Information

• Customer identification details (Name, Address, PAN)
• Account number and type
• Transaction amount and date
• Nature of transaction (deposit/withdrawal)
• Branch code and reporting entity details

Additional Details Required

• Purpose of transaction
• Source of funds (for deposits)
• Beneficial owner information
• Related party transactions
• Any suspicious indicators

CTR Filing Process

Transaction Identification

Identify transactions meeting CTR criteria

Data Compilation

Compile required information and verify accuracy

Report Generation

Generate CTR in prescribed format

FIU-IND Submission

Submit to Financial Intelligence Unit by deadline

Technical & Format Requirements

File Format

• XML format as per FIU-IND specifications
• Digital signature required
• Encryption for data security
• Validation against schema

Submission Method

• Online portal submission
• Secure FTP upload
• Acknowledgment receipt
• Error correction process

STR OBLIGATIONS

SUSPICIOUS TRANSACTION REPORTING

Suspicious Transaction Indicators

Amount-Based Indicators

• Transactions just below reporting threshold
• Unusual large cash transactions
• Frequent round-figure amounts
• Inconsistent with customer profile

Pattern-Based Indicators

• Rapid movement of funds
• Complex layering transactions
• Unusual geographic patterns
• Structured transactions

Behavioral Indicators

• Customer reluctance to provide information
• Nervousness during transactions
• Unusual knowledge of reporting requirements
• Requests for secrecy

Documentation Issues

• Incomplete or suspicious documents
• Frequent address changes
• Use of multiple identities
• Reluctance to update KYC

STR Filing Process & Requirements

Identification & Analysis

• Monitor transactions for suspicious patterns
• Analyze customer behavior and transaction history
• Cross-reference with known typologies
• Document reasons for suspicion

Internal Review Process

• Compliance officer review
• Senior management approval
• Legal review if required
• Decision documentation

Reporting Requirements

• File within 7 days of suspicion
• Include all relevant transaction details
• Provide narrative explanation
• Maintain confidentiality

Confidentiality & Tipping Off

• Strict confidentiality of STR filing
• No disclosure to customer
• Limited internal knowledge
• Prohibition on tipping off

• Criminal liability for disclosure
• Protection for reporting entities
• Safe harbor provisions
• Good faith reporting protection

COMPLIANCE FRAMEWORK

AML COMPLIANCE FRAMEWORK

Institutional Compliance Requirements

AML Policy & Procedures

• Board-approved AML policy
• Detailed operating procedures
• Regular policy updates
• Staff training programs

Organizational Structure

• Designated compliance officer
• AML compliance team
• Clear reporting lines
• Independent audit function

Technology Systems

• Transaction monitoring systems
• Automated reporting tools
• Data management systems
• Audit trail maintenance

KYC & Customer Due Diligence

Customer Identification

• Identity verification documents
• Address proof requirements
• Photograph and signature
• PAN card mandatory

Enhanced Due Diligence

• High-risk customers
• PEP identification
• Source of funds verification
• Ongoing monitoring

Beneficial Ownership

• Ultimate beneficial owner identification
• Corporate structure mapping
• Control and ownership verification
• Regular updates required

Record Maintenance

• 5-year record retention
• Transaction records
• KYC documentation
• Correspondence records

Risk Assessment & Management

Customer Risk Categorization

• Low risk: Standard KYC and monitoring
• Medium risk: Enhanced monitoring
• High risk: Enhanced due diligence
• Regular risk reassessment

Transaction Risk Factors

• Transaction amount and frequency
• Geographic risk factors
• Product and service risks
• Delivery channel risks

PENALTIES & ENFORCEMENT

PENALTIES & ENFORCEMENT ACTIONS

RBI Penalties for Non-Compliance

Violation Type	Penalty Amount	Additional Actions
Late CTR filing	₹10,000 per day	Warning, compliance directive
Non-filing of STR	₹1 lakh to ₹1 crore	License restrictions
KYC violations	₹1 lakh to ₹1 crore	Business restrictions
Systemic failures	₹5 crore and above	License suspension

Criminal Penalties under PMLA

Money Laundering Offenses

• Imprisonment: 3 to 7 years
• Fine: Up to ₹5 lakh
• Asset forfeiture
• Attachment of property

Non-Compliance Penalties

• Imprisonment: Up to 2 years
• Fine: ₹10,000 to ₹1 lakh
• Director liability
• Corporate penalties

Tipping Off Offenses

• Imprisonment: Up to 2 years
• Fine: ₹1 lakh to ₹5 lakh
• Professional disqualification
• Reputation damage

Enforcement Actions

• ED investigations
• Asset freezing orders
• Search and seizure
• Prosecution proceedings

CUSTOMER OBLIGATIONS

CUSTOMER OBLIGATIONS & RESPONSIBILITIES

Customer Documentation Requirements

High Value Cash Transactions

• Source of funds declaration
• Purpose of transaction
• Supporting documents
• Identity verification

KYC Compliance

• Complete KYC documentation
• Regular updates required
• Address proof maintenance
• PAN card mandatory

Information Disclosure

• Truthful information provision
• Business relationship details
• Beneficial ownership disclosure
• Transaction purpose explanation

Cooperation Requirements

• Bank inquiry cooperation
• Additional documentation
• Regulatory compliance
• Investigation assistance

Customer Rights & Protections

Privacy Rights

• Confidentiality of information
• Limited disclosure to authorities
• Data protection compliance
• Consent for information sharing

Service Rights

• Right to banking services
• Fair treatment guarantee
• Grievance redressal access
• Appeal mechanisms

Legal Protections

• Protection from harassment
• Due process rights
• Legal representation
• Judicial review access

Customer Best Practices

• Maintain proper documentation
• Keep KYC information updated
• Understand transaction limits
• Cooperate with bank requirements

• Avoid structuring transactions
• Provide accurate information
• Report suspicious approaches
• Seek professional advice when needed

PRACTICAL GUIDANCE

EXPERT GUIDANCE & SUPPORT

AML Compliance Checklist

For Banks & Financial Institutions

☐ Board-approved AML policy in place
☐ Designated compliance officer appointed
☐ Transaction monitoring system operational
☐ Staff training programs conducted
☐ CTR filing process established
☐ STR identification procedures defined
☐ Record keeping systems maintained
☐ Regular internal audits conducted

For Customers

☐ Complete KYC documentation provided
☐ Source of funds clearly documented
☐ Transaction purpose explained
☐ Supporting documents available
☐ Contact information updated
☐ Beneficial ownership disclosed
☐ Business relationship explained
☐ Cooperation with bank inquiries

GET PROFESSIONAL ASSISTANCE

AML Compliance Advisory

Expert guidance on AML compliance, policy development, and regulatory requirements

Regulatory Defense

Legal representation in regulatory proceedings and enforcement actions

Transaction Structuring Advice

Legal guidance on high-value transactions and compliance requirements

PMLA Defense

Criminal defense in money laundering cases and ED investigations

Contact Advocate Iranpreet Singh

Expert AML & Banking Regulation Services

📞+91-XXXXX-XXXXX

📧contact@iranpreetsingh.com

CONTINUE READING

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