RBI KYC/AMLGUIDELINES

Prevention of Money Laundering Act (PMLA), 2002:

• • Defines money laundering offenses
• • Establishes reporting entities
• • Mandates customer due diligence
• • Prescribes record maintenance
• • Provides for asset attachment
• • Establishes adjudication process

RBI Act, 1934 & Banking Regulation Act, 1949:

• • RBI's regulatory powers
• • Banking supervision framework
• • Customer protection measures
• • Prudential regulations
• • Compliance monitoring
• • Penalty provisions

Master Direction on KYC:

• • Customer identification procedures
• • Risk categorization framework
• • Enhanced due diligence norms
• • Ongoing monitoring requirements
• • Record keeping obligations
• • Compliance reporting

AML Standards:

• • Suspicious transaction reporting
• • Cash transaction reporting
• • Wire transfer regulations
• • Correspondent banking norms
• • Training requirements
• • Internal controls

Identity Documents:

• • PAN card (mandatory for high-value transactions)
• • Aadhaar card
• • Passport
• • Voter ID card
• • Driving license
• • NREGA job card

Address Proof:

• • Utility bills (electricity, gas, water)
• • Bank account statements
• • Rental agreements
• • Property tax receipts
• • Employer certificates
• • Government correspondence

Company Documents:

• • Certificate of incorporation
• • Memorandum and Articles of Association
• • Board resolution for account opening
• • Power of attorney for authorized signatories
• • PAN card of the company
• • GST registration certificate

Beneficial Ownership:

• • Identification of ultimate beneficial owners
• • Shareholding pattern details
• • Control structure documentation
• • Director identification
• • Authorized signatory details
• • Related party disclosures

Applicable to:

• • Low-risk customers
• • Government departments
• • Public sector undertakings
• • Listed companies
• • Regulated financial institutions
• • Small value accounts

Requirements:

• • Basic identity verification
• • Simplified documentation
• • Reduced ongoing monitoring
• • Lower transaction limits
• • Periodic review
• • Risk assessment documentation

Standard Requirements:

• • Complete identity verification
• • Address verification
• • Photograph requirement
• • Signature verification
• • Purpose of account opening
• • Source of funds verification

Ongoing Monitoring:

• • Transaction pattern analysis
• • Regular profile updates
• • Periodic KYC refresh
• • Suspicious activity monitoring
• • Risk rating review
• • Compliance reporting

High-Risk Categories:

• • Politically Exposed Persons (PEPs)
• • Non-resident customers
• • High net worth individuals
• • Cash-intensive businesses
• • Correspondent banking relationships
• • High-risk jurisdictions

Additional Measures:

• • Senior management approval
• • Source of wealth verification
• • Enhanced ongoing monitoring
• • Frequent profile updates
• • Additional documentation
• • Regular relationship review

Monitoring Systems:

• • Real-time transaction screening
• • Pattern recognition algorithms
• • Threshold-based alerts
• • Behavioral analysis
• • Cross-border transaction monitoring
• • Sanctions list screening

Red Flag Indicators:

• • Unusual transaction patterns
• • Large cash transactions
• • Rapid movement of funds
• • Transactions with high-risk countries
• • Structuring to avoid reporting
• • Inconsistent customer behavior

STR Requirements:

• • Suspicious Transaction Report (STR)
• • Cash Transaction Report (CTR)
• • Cross-border Wire Transfer Report
• • Counterfeit Currency Report
• • Non-Profit Organization Transaction Report
• • Electronic Fund Transfer Report

Reporting Timeline:

• • STR: Within 7 days of detection
• • CTR: Within 15 days of transaction
• • Wire transfers: Within 5 days
• • Counterfeit currency: Immediately
• • NPO transactions: Within 15 days
• • Follow-up reports as required

Low Risk:

• • Salaried employees
• • Government employees
• • Pensioners
• • Students
• • Small business owners
• • Regulated entities

High Risk:

• • Politically Exposed Persons
• • Non-resident customers
• • Cash-intensive businesses
• • Money service businesses
• • High net worth individuals
• • Trusts and foundations

High-Risk Jurisdictions:

• • FATF non-cooperative countries
• • Countries with weak AML controls
• • Offshore financial centers
• • Countries under sanctions
• • Tax havens
• • Conflict zones

Risk Mitigation:

• • Enhanced due diligence
• • Additional documentation
• • Source of funds verification
• • Ongoing monitoring
• • Senior management approval
• • Regular review

Transaction Reports:

• • Cash Transaction Report (CTR) - ₹10 lakh+
• • Suspicious Transaction Report (STR)
• • Cross-border Wire Transfer Report
• • Electronic Fund Transfer Report
• • Counterfeit Currency Report
• • Non-Profit Organization Report

Compliance Reports:

• • Annual AML compliance report
• • KYC compliance certificate
• • Internal audit reports
• • Training completion reports
• • System validation reports
• • Risk assessment updates

Customer Records:

• • KYC documents and verification
• • Account opening forms
• • Transaction records
• • Correspondence files
• • Risk assessment documentation
• • Periodic review records

Retention Period:

• • Customer records: 5 years after closure
• • Transaction records: 5 years
• • STR records: 5 years
• • Training records: 5 years
• • Audit reports: 8 years
• • System logs: As per policy