KYC, AML & CFT Programme for State Cooperative Banks

January 31, 2012

KYC & AML Programme for State Cooperative Banks

This KYC, AML and CFT programme has been developed to prevent the Bank from being 2 unintentionally or intentionally used for money laundering and terrorist financing activities and shall enable the Bank better understand its customers and their financial activities, which in turn will help manage customer risk prudently.

Original Issue Date: Approver: Author: Contact Person: Classification: Applicability: Last Revision Date: Review Date: Version:

4th October 2011 Mr. Bhima Subrahmanyam, Managing Director, NAFSCOB Jocata Financial Advisory and Technology Prashant Muddu, Managing Director, Jocata KYC, AML & CFT Regulatory Compliance All Branches Including Head Office of the Bank 23rd January 2012 27th January 2012 Final

GLOSSARY OF TERMS

AML BM BDD CAP CBI CBS CCR CRCM CDD CIP CRO CTR DCCB EDD FATF FIU-IND HNI HUF IBA KYC ML NRI PACS PEP PIO PMLA PMLR PO RBI RRB NABARD NAFSCOB NRI NSDL NTR SA SCB SDD STR UAPA UN UNSCR

Anti-Money Laundering Branch Manager Basic Due Diligence Customer Acceptance Program Central Bureau of Investigation Core Banking Solution Counterfeit Currency Report Customer Risk Categorisation Model Customer Due Diligence Customer Identification Program Customer Relationship Officer Cash Transaction Report District Central Cooperative Bank Enhanced Due Diligence Financial Action Task Force Financial Intelligence Unit - India High Net Worth Individual Hindu Undivided Family Indian Banks Association Know Your Customer Money Laundering Non-Resident Indian Primary Agricultural Cooperative Societies Politically Exposed Person Person of Indian Origin Prevention of Money Laundering Act 2002 Prevention of Money Laundering Rules 2005 Principal Officer Reserve Bank of India Regional Rural Banks National Bank for Agriculture and Rural Development National Federation of State Cooperative Banks Non Resident Indian National Securities Depository Limited Non-Profit Organisation Transaction Reports Staff Assistant State Cooperative Banks Simplified Due Diligence Suspicious Transaction Report Unlawful Activities Prevention Act United Nations United Nation Security Council Resolution 4

TABLE OF CONTENTS
1 2 Preface .......................................................................................................................... 10 1.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 3 3.1 Statement of commitment....................................................................................... 10 Customer ................................................................................................................ 11 High Net-Worth Individual....................................................................................... 11 Beneficial Owners................................................................................................... 11 Controlling Parties .................................................................................................. 11 Money Laundering.................................................................................................. 11 Terrorist Financing.................................................................................................. 12 Small Account......................................................................................................... 12 Financial Intermediary ............................................................................................ 12 Ordering Bank ........................................................................................................ 12 Intermediary Bank .................................................................................................. 13 Beneficiary Bank..................................................................................................... 13 Defined legal frameworks ....................................................................................... 14 Prevention of Money Laundering Act 2002 ..................................................... 14 Rules under PMLA .......................................................................................... 14 Unlawful Activities (Prevention) Act, 1967....................................................... 14 Reserve Bank of India ..................................................................................... 14 National Bank for Agriculture and Rural Development .................................... 15 Financial Intelligence Unit India.................................................................... 15 Penalties for Non-Compliance......................................................................... 15 Reputational Risk ............................................................................................ 15 Definitions ...................................................................................................................... 11

Legislative and Regulatory Framework ......................................................................... 14 3.1.1 3.1.2 3.1.3 3.2 3.2.1 3.2.2 3.2.3 3.3 3.3.1 3.3.2

Applicable Regulatory Authorities........................................................................... 14

Consequences of Non-Compliance ........................................................................ 15

Governing Structure and Roles and Responsibilities at State Cooperative Banks........ 17 4.1 4.2 4.3 Overview................................................................................................................. 17 Governing Policies and Procedures ....................................................................... 17 Roles and Responsibilities ..................................................................................... 18 Board of Directors ........................................................................................... 18 Senior Management ........................................................................................ 18 Principal Officer ............................................................................................... 18 AML Compliance Group .................................................................................. 19 Audit and Compliance Department ................................................................. 19 Customer Relationship Officer ........................................................................ 19

4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6

4.3.7 4.3.8 5 5.1 5.2

Branch Manager.............................................................................................. 19 Staff ................................................................................................................. 20

Customer Classification ................................................................................................. 21 Constitution............................................................................................................. 21 Categories .............................................................................................................. 22 Individuals ....................................................................................................... 22 Entities............................................................................................................. 22

5.2.1 5.2.2 6 6.1 6.2

Customer Acceptance Policy......................................................................................... 24 Fictitious or Benami names .................................................................................... 24 Customer Risk Categorisation ................................................................................ 24 Business Imperative ........................................................................................ 24 Overview of Methodology................................................................................ 25 Application of Rating Methodology.................................................................. 25 Risk categorisation review............................................................................... 27

6.2.1 6.2.2 6.2.3 6.2.4

Appendix I to Chapter 6: Customer Risk Categorisation Variables and Scores ................... 29 Appendix II to Chapter 6: High Risk Industry Sectors........................................................... 36 7 Customer Identification and Verification Program ......................................................... 37 7.1 7.2 7.3 Overview................................................................................................................. 37 Applicability............................................................................................................. 37 Basis for Customer Identification ............................................................................ 37 Walk-in Customers .......................................................................................... 37 Account Holders .............................................................................................. 38 Basic Due Diligence ........................................................................................ 39 Simplified Due Diligence ................................................................................. 39 Enhanced Due Diligence ................................................................................. 40 Steps to perform EDD ..................................................................................... 40 Special Cases for Documentary Verification ................................................... 40 Name Screening.............................................................................................. 41 External Requests for Freezing of Accounts ................................................... 43 Adverse Information Checks ........................................................................... 43 Politically Exposed Person .............................................................................. 44

7.3.1 7.3.2 7.4 7.4.1 7.4.2 7.4.3 7.4.4 7.4.5 7.4.6 7.4.7 7.4.8 7.4.9

Customer Due Diligence......................................................................................... 38

Appendix I to Chapter 7: Due Diligence Checklist ................................................................ 46 Appendix II to Chapter 7: List of Officially Valid Documents ................................................. 91 Address Proof Documents ................................................................................................ 92 8 Relaxations to KYC Information Collection Requirements ............................................ 94 8.1 8.2 9 Small Accounts....................................................................................................... 94 Customers through Introducer ................................................................................ 94

Account Opening Process ............................................................................................. 96 6

9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 10 10.1 10.2 10.3 11 11.1

Determine Type of the Customer and Obtain Basic Customer Information............ 96 Obtain or Calculate the Customer Risk Categorisation Score................................ 96 Determine If Customer qualifies for Simplified Due Diligence ................................ 96 Verify the Identity of the Customer Using Documentary Methods .......................... 96 Perform Background Checks.................................................................................. 97 Collect Introducer Information ................................................................................ 97 Identify Details for Entity Customers ...................................................................... 98 Identify Controlling Parties and Beneficial Owners................................................. 98 Obtain Approvals .................................................................................................... 98 Customer Information Update .................................................................................. 100 Schedule of Reviews ............................................................................................ 100 Procedures for Periodic Reviews ......................................................................... 100 Change in Category or Constitution ..................................................................... 101 Account Cancellation and Closure ........................................................................... 102 Initiation of Customer Relationship Closures........................................................ 102 Internal Notification........................................................................................ 102 Scheduling Closure ....................................................................................... 102 Transaction cancellation................................................................................ 103

Appendix I to Chapter 9: Account Opening Flowchart ............................................................ 1

11.1.1 11.1.2 11.1.3 12 12.1 12.2 12.3 12.4 12.5 12.6

Internal controls........................................................................................................ 104 Products and Services Offered by the Bank......................................................... 104 Customer Acceptance and Identification Procedures........................................... 104 Country Risk Assessment Procedures ................................................................. 104 Customer Risk Assessment Procedures .............................................................. 104 KYC, AML and CFT Policy and Procedure Reviews ............................................ 105 Actions of the AML Compliance Group ................................................................ 105 Self-assessment Procedures ........................................................................ 105 Updates on Policy and Procedures ............................................................... 105 Perform Audits............................................................................................... 105 Perform Quality Assurance Tests.................................................................. 105

12.6.1 12.6.2 12.6.3 12.6.4 13 13.1 13.2 13.3 13.4

Transaction Monitoring and Reporting ..................................................................... 106 Introduction........................................................................................................... 106 Reporting Formats................................................................................................ 106 Submission of Reports to FIU-IND ....................................................................... 106 CTRs .................................................................................................................... 107 CTR Filing Procedures .................................................................................. 107 Time Frames for Filing a CTR ....................................................................... 108 Exemptions.................................................................................................... 108

13.4.1 13.4.2 13.4.3 13.5

STRs..................................................................................................................... 108 7

13.5.1 13.5.2 13.5.3 13.5.4 13.5.5 13.5.6 13.5.7 13.5.8 13.5.9 13.5.10 13.5.11 13.5.12 13.5.13 13.5.14 13.5.15 13.5.16 13.5.17 13.5.18 13.5.19 13.5.20 13.6 13.6.1 13.6.2 13.7 13.7.1 13.7.2 13.8 13.8.1 13.8.2 13.8.3 14 14.1 14.2

Introduction.................................................................................................... 108 Potential Indicators of Suspicious Activity or Red Flags................................ 109 Transaction Types for Monitoring .................................................................. 111 Automated Transaction Monitoring ............................................................... 112 Manual Alerts ................................................................................................ 115 STR Filing Obligations................................................................................... 115 Communication with Authorities and Voluntary STRs ................................... 115 Prohibition of Disclosure................................................................................ 116 Protection from Civil Liability for Reporting Information in a STR.................. 116 Prohibition on Retaliation ........................................................................... 116 Failure to Comply with the Banks Policy ................................................... 117 Escalation and Referral of Potentially Suspicious Activity ......................... 117 STR Filing Procedures............................................................................... 117 On-going Duty to Report............................................................................ 118 Time Frames for Filing a STR.................................................................... 118 STR Dispute Resolution ............................................................................ 119 Supplemental STRs ................................................................................... 119 Closing Accounts Due to Continued Suspicious Activity ........................... 119 STR Record Retention............................................................................... 119 Regulatory and Law Enforcement Requests ............................................. 120 CCR Filing Procedures.................................................................................. 120 Time Frames for Filing a CCR....................................................................... 120 NTR Filing Procedures .................................................................................. 121 Time Frames for Filing a NTR ....................................................................... 121 Requirements of Domestic Transfers ............................................................ 122 Requirements of Cross Transfers ................................................................. 122 Exemption from Wire Transfer Requirements ............................................... 122

CCRs .................................................................................................................... 120

NTRs .................................................................................................................... 121

Special Note on Wire Transfers............................................................................ 121

Appendix I to Chapter 13: Other Authorities for Enforcement of the PMLA ........................ 123 Customer Record Retention and Sharing ................................................................ 124 Maintenance and Preservation of Records .......................................................... 124 Information Sharing, Legal Process and Other Matters ....................................... 124 Principal Officer ............................................................................................. 124 Sharing Process ............................................................................................ 124

14.2.1 14.2.2 15 15.1 15.2

Training and Education ............................................................................................ 126 Customer Education ............................................................................................. 126 Training................................................................................................................. 126 8

15.3 15.4

KYC for Existing and New Employees ................................................................. 127 Training formats.................................................................................................... 127

Annexure A: Guidelines on Performing Background Checks using Google ....................... 128 Annexure B: Letter to Individual Customers Regarding KYC Compliance ......................... 132 Annexure C: Schedule of Offences..................................................................................... 134 Annexure D: Manual Format for Filing Cash Transaction Report ....................................... 143 Annexure E: Manual Format for Filing Suspicious Transaction Report .............................. 147 Annexure F: Manual Format for Filing of Counterfeit Currency Transaction Report........... 152

1 Preface
This policy and procedure document is a comprehensive source of reference for all the concerned and relevant activities of the Bank towards Know Your Customer (KYC), Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) compliance. The policies and procedures developed are designed to ensure that the Bank is committed to the prevention of the use of its facilities for laundering the proceeds of crime and financing terrorist activities. It consists of the following sections: Risk based acceptance model to facilitate the classification of current and existing customers on the basis of money laundering and terrorist financing risk; Account opening procedures including customer classification, verification of customer information using documentary and non-documentary methods and escalation processes; Policy for customer information updates based on the risk level of the individual or entity; Internal controls to measure the risk levels of products, services and customers accepted and to measure the effectiveness of current policies and procedures; Policies and procedures for the monitoring and reporting of transactions; Policies and procedures for customer record maintenance, retention and their sharing with government agencies; and Recommendation for a training programme for Bank officials geared towards customer identification and acceptance, customer risk ranking and detection of money laundering instances.

1.1 Statement of commitment

The goals and objectives of this KYC, AML & CFT programme are to (1) deter individuals and entities from using the Bank to launder the proceeds of illegal activities; (2) enable member branches of the Bank to comply with their obligations under the Prevention of Money Laundering Act, Unlawful Activities Prevention Act (ULPA) and regulations from Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD), regulatory bodies for the banks; (3) manage and mitigate money laundering and terrorist financing related risks; (4) allow banks to cooperate with regulatory bodies and government agencies in detecting and deterring money laundering and terrorist financing; and (5) provide employees with guidance for actions to be taken to comply with the Banks obligations under the law and the Banks policies.

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2 Definitions
2.1 Customer
RBI defines a customer1 as any one of the following: A person or entity that maintains an account and/or has a business relationship with the Bank. One on whose behalf the account is maintained (i.e., the beneficial owner) or beneficiary of transactions conducted by professional intermediaries, such as stock brokers, chartered accountants, solicitors, etc. as permitted under the law. Any person or entity connected with a financial transaction or any other product offered by the Bank including walk-in customers.

2.2 High Net-Worth Individual

An individual is designated as a High Net-Worth Individual (HNI) for the purposes of the Bank if the sum of all the credits for the individual at the Bank across all products exceeds Rupees 15 lakhs (Rs. 15,00,000)

2.3 Beneficial Owners

The Beneficial Owner for an entity constitution type is any individual or entity that owns or controls over 20% of the entity. For an individual constitution type the beneficial owner refers to the individual itself or all the operators of the account.

2.4 Controlling Parties

Controlling parties are individuals or entities with direct or indirect control over the account created. For KYC purposes, the controlling parties are defined as authorized signatories, power of attorney holders, executive management (e.g. CEO, CFO, Directors) and Board of Directors. Different account types and transactions could involve different controlling parties.

2.5 Money Laundering

Money Laundering is a process by which illegal sources of money are disguised to make it appear as if they were the proceeds of legal activities. It usually occurs in three steps: 1. The placement step involving the introduction of the money into the financial system; 2. The second step known as layering involves performing complex financial transactions to hide the illegal source; and
1

Section 1.2 of RBI Master Circular on KYC, AML and CFT norms - July 1, 2011

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3. Finally, the integration step, during which the previously illegal proceeds enter the economy and are converted into apparently legitimate earnings.

2.6 Terrorist Financing

Terrorist Financing relates to the use of financial institutions to launder money or misdirect clean money for illegal and illegitimate terrorist activities. Terrorist financing, unlike money laundering, cares little about the source of the funds and its purpose is what defines the scope.

2.7 Small Account

A small account refers to a savings bank account where: 1. The aggregate of all credits in a financial year does not exceed Rupees one lakh (Rs. 1,00,000); 2. The aggregate of all withdrawals and transfers in a month does not exceed Rupees ten thousand (Rs. 10,000); and 3. The balance at any point of time does not exceed Rupees fifty thousand (Rs. 50,000)

2.8 Financial Intermediary

For the purposes of this document, a financial intermediary is a person or institution that acts on behalf of its customers to conduct a transaction or open an account with the Bank. As per the RBI, the term Financial Intermediary includes following persons or entities registered under Section 12 of the Securities and Exchange Board of India (SEBI) Act, 1992: 1. Stock brokers 2. Sub-brokers 3. Share transfer agents 4. Bankers to an issue 5. Trustees to trust deed 6. Registrars to issue 7. Merchant bankers 8. Underwriters 9. Portfolio Managers 10. Depositories and Participants 11. Custodian of securities 12. Credit rating agencies 13. Venture capital funds 14. Collective investment schemes including mutual funds

2.9 Ordering Bank

In relation with wire transfers, an Ordering Bank is a Bank that originates a wire transfer as per the order placed by its customers. 12

2.10 Intermediary Bank

In relation with wire transfers, an Intermediary Bank provides business services on behalf of another financial institution (ordering and beneficiary bank). Intermediary Banks are also known as Correspondent Banks and are used by domestic banks in order to service transactions originating in different cities, states or foreign countries, and act as a domestic bank's agent. This is done because the domestic bank may have limited access to markets outside of its geography, and cannot service its client accounts without opening up a branch in that particular city, state or country.

2.11 Beneficiary Bank

In relation with wire transfers, a Beneficiary Bank refers to the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account.

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3 Legislative and Regulatory Framework

3.1 Defined legal frameworks
3.1.1 Prevention of Money Laundering Act 2002 The Prevention of Money Laundering Act (PMLA) of 20022 is the legislation that forms the core of the legal framework put in to place to combat money laundering. The PMLA came into effect from 1st July 2005 with two amendments passed in May 2005 and March 2009. The act criminalises money laundering and also provides for freezing and confiscation of assets associated in money laundering. It requires financial institutions and intermediaries to verify the identity of clients, maintain records and furnish prescribed transactional information to the FIU-IND. 3.1.2 Rules under PMLA In addition, the Government of India has strengthened the PMLA through the notification of various rules, known as Prevention of Money Laundering Rules (PMLR), to enforce the PMLA which includes defining an adjudicating authority and appellate tribunal, conferring exclusive and concurrent powers, specifying rules for receipt and management of confiscated properties, etc. A complete listing of the rules and their purpose is available on the FIU-IND website3 3.1.3 Unlawful Activities (Prevention) Act, 1967 The Unlawful Activities Prevention Act of 1967, amended in 2008, relates to the purposes of prevention, and for coping with terrorist activities. The Government of India has issued an order dated August 27 2009 detailing the procedure for implementing of section 51A of the Act and it empowers the Central Government to 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 in engaged in terrorism ,or 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 or Order.

3.2 Applicable Regulatory Authorities

3.2.1 Reserve Bank of India

2 3

Prevention of Money Laundering Act 2002 is available at http://fiuindia.gov.in/pmla2002.htm

Notification section of the FIU-IND website is available at http://fiuindia.gov.in/notificationsoverview.htm

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The RBI is the central banking institution in India and controls the monetary policy of the rupee and the currency reserves. Through its Master Circular on Know Your Customer (KYC) norms/Anti Money Laundering (AML) Standards/Combating of Financing of Terrorism/Obligations of Banks under PMLA, 2002 the RBI introduced KYC guidelines for all banks which it has since updated yearly. The RBI also has the authority to penalize banking institutions for violations in KYC, AML and CFT norms. 3.2.2 National Bank for Agriculture and Rural Development NABARD is the apex development bank in India and is accredited with matters regarding policy, planning and operations in the field of credit for agriculture and other economic activities in rural regions in India. In discharging its role as a facilitator for rural prosperity, NABARD is also entrusted with acting as a regulator for Cooperative Banks and Regional Rural Banks (RRBs). NABARD created a model KYC policy for its member banks with a stipulation that it be tailored to the individual needs of the bank. 3.2.3 Financial Intelligence Unit India FIU-IND is the central national agency responsible for receiving, processing, analysing and disseminating information relating to suspicious financial transactions and is responsible for domestic and global efforts against money laundering and related crimes. Any reports regarding financial transactions such as Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) must be filed with the agency. FIU-IND also has the authority to request additional information on individuals or entities from banks and other financial institutions.

3.3 Consequences of Non-Compliance

3.3.1 Penalties for Non-Compliance Any contravention or non-compliance with RBIs instructions relating to KYC, AML and CFT guidelines shall attract penalties under the provisions of Section 47(A) (1) (b) read with Section 46(4) of the Banking Regulation Act, 1949. The RBI has imposed fines on various public and private sector banks for non-compliance with KYC norms. In the first six months of 2011, over 48 cooperative banks had been fined between Rupees one lakh (Rs. 1, 00,000) and Rupees five lakh (Rs. 5, 00,000) for various KYC, AML and CFT related offences4. Additionally, the PMLA specifies punishments of up to ten years of rigorous imprisonment on whosoever willingly commits the offence of money laundering. 3.3.2 Reputational Risk If the Bank is penalised for non-compliance, it can create a negative perception of the institution on customers, investors and regulators and can adversely affect the Banks ability to raise capital and to maintain and create business relationships.

Press Report, 4 June 2011

15

RBI has stepped up its actions against non-compliant banks and in addition to fiscal penalties, also issues notifications and press releases5 on the banks that have been fined for violation of KYC, AML and CFT guidelines. These press releases are picked up by national and international news media which can result in a severe reputational damage to the banks.

press releases documenting penalties are available in the Press Release section of http://www.rbi.org.in

5RBI

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4 Governing Structure and Roles and Responsibilities at State Cooperative Banks

4.1 Overview
The short-term cooperative banking structure under NABARD is a three-tiered structure with the State Cooperative Banks (SCBs) at the apex level followed by the District Central Cooperative Banks at the intermediate level and the Primary Agricultural Credit Societies (PACS) at the village level. Certain states, however, have two-tier structures with no District Central Cooperative Bank (DCCBs) present at the intermediate level while other states have a combination of a two-tier and three-tier structure. The DCCBs and PACS provide banking services to individuals and entities primarily in the rural and semi-urban areas. In urban areas, most SCBs provide all the regular banking services to individuals and non-individuals alike.

Short Term Cooperative Structure

Apex Level Mostly Urban

Intermediate Level

Semi-Urban or Rural Rural

Base Level

4.2 Governing Policies and Procedures

At the present time, PACS have not been brought under the KYC, AML and CFT regulations. This KYC, AML and CFT programme explicitly addresses the requirements of the SCBs and is intended for their use. Further customisation will be required before adoption of the programme by the DCCBs.

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4.3 Roles and Responsibilities

4.3.1 Board of Directors As per the RBI guidelines6, the Board of Directors of the Bank is responsible for ensuring that an effective KYC, AML and CFT programme is put in place by establishing procedures and ensuring their effective implementation. The programme set by the Board of Directors shall contain: Application procedures for AML measures developed by senior management; Roles and responsibilities; Training for bank officials; Systems and controls for implementation; Approving methodology for customer risk categorization; and Management oversight for the KYC, AML and CFT programme. It is the responsibility of the Board of Directors to appoint the Principal Officer (PO) of the Bank. All pertinent KYC, AML and CFT topics must be discussed by the Board of Directors in their quarterly meeting.

4.3.2

Senior Management The Senior Management is tasked with the creation of policies and procedures and their responsibilities include but are not limited to: Creation of KYC, AML and CFT policies subject to approval of the Board; Deployment of suitable personnel and providing them with sufficient authority to ensure the effective implementation and administration of KYC, AML and CFT programmes; Obtain periodic reports regarding transaction monitoring, KYC, AML and CFT initiatives, identified compliance deficiencies and corrective actions taken; and Create updates or make changes to the existing policies and procedures which will be required to be ratified by the Board of Directors.

4.3.3

Principal Officer As per the guidelines7, the Principal Officer (PO) is the officer-in-charge vested with the authority to ensure the overall implementation of the Banks KYC, AML and CFT policy. The PO is also responsible for: Ensuring the monitoring and reporting requirements of the Bank under the PMLA are met; Reviewing the adequacy of systems and controls with respect to KYC, AML & CFT; Coordinating with regulatory and law enforcement agencies; and Assisting Senior Management and Compliance Groups in their function.

6
7

RBI Circular DBOD.AML.BC.18/14.01.001/2002-03 dated August 16, 2002 RBI Circular DBOD.AML.BC.No.108/14.01.001/2009-10 dated June 9, 2010

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4.3.4

AML Compliance Group The AML Compliance Group is responsible for all transaction monitoring related activity at the bank level. It is comprised of the PO and Senior Managers from the various departments of the Bank including Banking, Internal Audit and Compliance. The group is responsible for: Receiving Transaction Alerts escalated by the Branch Manager (BM) and either further escalating or closing out the report; Sampling of Transaction Alerts reports closed out by the BM to check for correctness of BM decisions relating to transaction monitoring; and Providing periodic reports to Senior Management regarding compliance and transaction related activities.

4.3.5

Audit and Compliance Department The Banks internal audit and compliance department is responsible for the following: Providing an independent evaluation of the policies and procedures deployed within the bank and their effectiveness; and Periodically checking the KYC, AML and CFT compliance levels at the branches of the Bank and providing reports of the same to the audit committee of the Board. 4.3.6 Customer Relationship Officer The Customer Relationship Officer (CRO) or Account Opening Officer owns the relationship with the customer and is responsible for: Information review and approval for all new customers. While certain portions of the information collection process may be delegated to the Staff Assistant (SA), the CRO remains ultimately responsible; Obtaining, maintaining and updating customer KYC information and documentation in the Banks management systems; Interacting with the customer or customer contact in order to make sure that the customer identification requirements are understood; Forming a reasonable belief regarding the true identity of the customers; and Performing periodic reviews and refresh of customers KYC information on file.

4.3.7

Branch Manager The BM at the bank is the branch level decision making authority for all KYC & AML policy decisions. The responsibilities of the Officer include: Responsible for Implementation of KYC, AML and CFT policy at the Branch level; Implements policy on closure or freezing of accounts for non-compliance; Responsible for submitting monthly Cash Transaction Reports; and Escalating transaction monitoring alerts from the branch level to the Bank level. 19

4.3.8

Staff Bank staff that are interacting with customers and or handling customer transactions/instructions will be a Banks strongest defence against money laundering. Hence the communication of a Banks KYC, AML and CFT Programme and related training in how to apply the programme, is key to the success of antimoney laundering and counter funding of terrorism strategies. Therefore as much as it is important for the Bank to communicate the KYC, AML & CFT Programme with the staff, it is equally important for the staff to keep themselves updated with the policies and procedures related to their role in the organisation Bank staff is also obligated to report transactions that are suspicious of nature and could be potentially money laundering or terrorist financing activity. An employee is required to report transaction activity based on mere suspicion even if he or she is not precisely sure about the underlying criminal activity or whether illegal activities have occurred.

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5 Customer Classification
In order to determine the appropriate information and documentation that must be collected, all the customers at the bank are classified into distinct constitution types and categories within them.

5.1 Constitution
The information required from the customer is based on the customer type of the account holder and is referred to as the constitution. The following constitution types are applicable to the Bank: Individuals: All accounts opened by individuals or groups acting in an individual capacity (e.g. Joint Accounts, Hindu Undivided Family) are present in this category. Business Entities: Accounts of specific corporate entities, separate and distinct from the individuals who finance it. Financial Institutions: Institutions that provide financial services to its members or clients including private, public and co-operative sector banks as well as non-banking institutions such as money-services businesses and chit funds. Government, Government Agency or Entity: Any permanent or nonpermanent organization in the machinery of the government including departments, ministries and other types of public bodies. Trust: Trusts are classified into two types - Public trusts that are generally formed for charitable and religious purposes and are not intended for commercial activities while private trusts generate income for specified beneficiaries. Non Profit Organizations: Non-profit organizations or charities can be registered as trusts, societies or a private limited non-profit company under Section 25 of the Companies Act. These exist independently of the government, are self-governed, produce benefits for individuals or groups outside the membership of the organization and are prohibited from disbursing monetary residual to members. Religious organizations are set up primarily for religious purposes and must be registered with the Income Tax Department. Societies and Associations: A society or an association is an institution owned by its members in that the funds are raised from membership and are then used to provide common services to all the members of the organization.

Based on these definitions, a particular customer could fit into one or more constitutions listed above but will hold the same customer risk categorisation value from a KYC, AML and CFT compliance standpoint.

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5.2 Categories
All the categories for the constitutions can be broadly grouped under individual and entity constitution types as listed below: 5.2.1 Individuals The constitution type individual consists of the following sub-categories: Non-Resident Indian: A Non-Resident Indian (NRI) is an Indian citizen who resides out of India for employment, business or other reasons for an uncertain duration of stay. NRI accounts may provide for special tax and repatriation benefits due to the status of the account holder. Foreign National: A foreign national is an individual not of Indian nationality but currently residing in the country for various purposes. Persons of Indian Origin: A person of Indian origin is an individual who is not a citizen of India but has Indian ancestry and has obtained a valid PIO card. Minor: A minor account is an account created and operated in the name of a minor (under the age of 18) and represented by a guardian or custodian. Upon the minor attaining majority, the right of the guardian to operate the account shall cease. Staff: Account created and operated by current or past employees of the bank. Hindu Undivided Family: The Hindu Undivided Family (HUF) is a joint family consisting of members descending from a common ancestor. A senior member is designated as the Karta responsible for managing the account for the HUF. Single: Any Indian citizen above the age of 18 and not falling under any of the categories listed above account is considered a single account holder. Joint: A joint account type is created in the combined name of all the depositors, each of whom acting in his or her own individual capacity. A joint account can be created between any number of Individual, Minor, Staff and NRI constitution types. 5.2.2 Entities Each constitution in the entity section consists of obvious categories as listed below: Business Entities Proprietorship Private Limited Company Partnership Co-operative Public Limited Company Joint Hindu Family Business Limited Liability Partnership

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Financial Institutions Private Banks Public Sector Banks Regional Rural Banks State Co-operative Banks District Co-operative Banks Urban Co-operative Banks Money Service Businesses Non-Banking Financial Company Government, Government Agency or Entity State Government Central Government State Government Undertaking Government of India Undertaking Government Authorities, Autonomous & Regulatory Bodies Liquidator Local Bodies Trusts Public Private Non Profit Organizations Trust Society Section 25 Company Unregistered Entity Societies and Associations Registered Unregistered

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6 Customer Acceptance Policy

The customer acceptance policy of the Bank lays down the explicit criteria for the acceptance of customers. The policy allows for flexibility in the acceptance of the customer and its implementation must not result in the denial of banking services to the general public, especially to those customers who are financially or socially disadvantaged. Kindly refer to Section 8 of the policy for permissible relaxations with regards to customer acceptance.

6.1 Fictitious or Benami names

Rule 9 of the PMLR, sub-rule (1), clause (1C) prohibits the Bank from opening accounts or keeping accounts in fictitious or benami names where the identity of the person cannot be verified or has not been disclosed.

6.2 Customer Risk Categorisation

The Bank has adopted a risk based approach in developing and implementing its customer acceptance and identification policies and procedures as per the regulations and approved Indian Banks Association (IBA) August 2011 guidelines. The risk based approach has been adopted so that those attributes that might suggest a greater likelihood of money laundering are identified. The key categories chosen to classify the prospective and existing customers are: Customer Demographics: This category includes static customer information that describes the general characteristics of a customer such as customer type, industry sector, length of relationship and customer identification. Geography: This category typically includes countries associated with the customer such as Nationality and Country of Residence. Product: This Category includes the type of products a customer has with the Bank. Transaction: This Category takes into account the characteristics of the transactions that each customer makes.

6.2.1

Business Imperative The development of a customer KYC, AML and CFT risk categorisation model referred to as the Customer Risk Categorisation (CRC) model can be used to evaluate the inherent money laundering/ terrorist financing risks for each client relationship and will assist the Bank in: Identifying customers or client relationships that should be subject to both Enhanced Due Diligence (EDD) measures and enhanced transaction monitoring; Allocating scarce compliance resources to higher risk areas; Prioritising customer compliance and remediation efforts; and Satisfying regulatory requirements. 24

6.2.2

Overview of Methodology The CRC model takes into consideration a total of eight parameters outlined below. The parameters chosen for Individuals and Entities are shown below.

# 1 2 3 4 5 6 7 8

Category Customer Demographics Customer Demographics Customer Demographics Customer Demographics Geography Product Transaction Transaction

Variables for Individuals Customer Type Length of Relationship Customer Identification Nationality Product Type Cash Transaction Report Suspicious Transaction Report

Variables for Entities Customer Type Length of Relationship Customer Identification Industry Sector Product Type Cash Transaction Report Suspicious Transaction Report

Each variable has a possible risk-rating of 1, 2 or 3 with 1 being the lowest and 3 the highest score. Each variable is also weighted based upon the relative importance of the variable. A total score out of 100 is calculated based on the following formula: Total Score = Sum (Individual Variable Score * Weight) The total score is then divided into three categories that denote the categorisation level of the customer as Level I, Level II or Level III. Appendix 1 to Chapter 7 provides a complete breakdown of the variables and the associated weights and an explanation for the choices made. 6.2.3 Application of Rating Methodology 6.2.3.1 New Customers

The risk score calculated based on the due diligence performed or captured at the time of account opening for new customers is called the Initial Customer Categorisation score. For the Initial Customer Categorisation, the variables in the Transaction Category are suppressed to account for the possibility of low volume, frequency and value of transactions. This enables the other variables to have a more pronounced effect on the Initial Customer Categorisation in the absence of sufficient transaction information. The sum of the weighted scores of variables determines the Initial Customer Categorisation score.

25

The chosen parameters and their weights at the time of Initial Customer Categorisation are shown in the tables below under the column New Customer Weights:

Variables for Individuals New Existing Customer Customer Weights Weights 1 1 2 2 1 1 0 0 2 2 1 1 2 2

# 1 2 3 4 5 6 7

Category Customer Demographics Customer Demographics Customer Demographics Geography Product Transaction Transaction

Variables for Individuals Customer Type Length of Relationship Customer Identification Nationality Product Type Cash Transaction Report Suspicious Transaction Report

Variables for Entities New Existing Customer Customer Weights Weights 1 1 2 2 2 1 0 0 2 2 2 1 2 2

# 1 2 3 4 5 6 7

Category Customer Demographics Customer Demographics Customer Demographics Customer Demographics Product Transaction Transaction

Variables for Entities Customer Type Length of Relationship Customer Identification Industry Sector Product Type Cash Transaction Report Suspicious Transaction Report

6.2.3.2

Existing Customers

For existing customers, the variables for the Transaction Activity category are also used to calculate the Customers Risk Categorisation Score. The applicable weights 26

and variables are shown in the above tables under the column Existing Customer Weights. The change in weights from a new customer model to an existing customer model is applicable when a customer has held the relationship with the Bank for over a year or has a CTR/STR filed within the first year. 6.2.3.3 Final Customer Categorisation Score

Once the Initial Customer Categorisation or Customer Categorisation has been completed for new and existing customers, respectively, a BM may consider other factors such as country of residence, matches to any sanctions lists or Politically Exposed Persons (PEP) lists, negative news regarding customer, improper introduction of customer, additional regulatory actions or guidance and when appropriate, override a customers calculated customer score with a score that he or she deems more reflective of the risk associated with the customer in light of the additional information (Branch Override). All such Branch Overrides must follow an approval process and require a final approval from the PO of the Bank. The Final Customer Categorisation equals either the Initial Customer Categorisation or the Customer Categorisation and when applicable the Branch Override. The Final Customer Categorisation is scaled to a total score out of 100 as follows: Final Customer Categorisation Level I Level II Level III IMPORTANT NOTE Classification of a customer of the Bank into a Level III Category does not automatically mean that this customer is a money launderer or financer of terrorism. Equally, a Level I categorisation does not mean that the customer is completely devoid of any risk. The categorisation only provides a broad clue to the possibilities calling for additional monitoring and attention. The Bank staff must use their experience and exercise appropriate judgement while applying the policies and procedures. 6.2.4 Risk categorisation review The RBI guidelines recommend the review of the CRCM to be carried out at least once every six months8. The AML Compliance Group and the PO are entrusted the responsibility for the review and updation of the CRCM.
8

Score < 56 >= 56 and <= 78 > 78

RBI Master Circular on KYC, AML and CFT norms - July 1, 2011

27

28

Appendix I to Chapter 6: Customer Risk Categorisation Variables and Scores

Customer Type The customer type variable evaluates the inherent risk the type of customer poses to the bank in terms of KYC, AML and CFT. This information is captured by the Bank using a combination of the Constitution and Category fields. The risk values to the customer type variable have been assigned using regulatory guidelines, industry best practices and prior experience. An example of this evaluation is as follows, if a company is publicly traded, it is less likely to pose a high risk for money laundering. This is attributed to the fact that information on publicly traded companies is made readily available to all individuals, making their financial status and overall well standing transparent to all. The table below lists the values for Constitution and Category and the associated scores. Constitution Individual Individual Individual Individual Individual Individual Individual Individual Business Entities Business Entities Business Entities Business Entities Business Entities Business Entities Business Entities Financial Institutions Financial Institutions Financial Institutions Financial Institutions Financial Institutions Financial Institutions Financial Institutions Financial Institutions Govt., Govt. Agency or Entity Govt., Govt. Agency or Entity Govt., Govt. Agency or Entity Govt., Govt. Agency or Entity Govt., Govt. Agency or Entity Category Single Joint Minor or Custodian Staff Hindu Undivided Family High Net Worth Non-Residents Foreign Proprietorship Private Limited Company Partnership Co-operative Public Limited Company Joint Hindu Family Business Limited Liability Partnership Private Banks Public Sector Banks Regional Rural Banks Urban Co-operative State Co-operative District Co-operative Money Service Businesses Non-Banking Financial Companies (NBFCs) State Government Central Government State Government Undertaking Government India Undertaking Government Authorities, Autonomous & Regulatory Bodies 29 Score 2 2 2 2 2 3 3 3 3 2 2 1 1 3 2 2 1 1 2 1 1 3 2 1 1 1 1 1

Constitution Govt. Trust Trust Non Profit Organizations Non Profit Organizations Non Profit Organizations

Category Local Bodies Public Private Trust Society Section 25 Company

Score 2 2 2 3 3 3

Length of Relationship Any new customers of the Bank should be considered to be higher risk for money laundering or terrorist financing because the Bank does not know enough about the clients business, transaction activities and overall profile. The risk the customer poses, based on this variable, diminishes over time provided he continuous to transact actively and is subject to transaction monitoring. The table below lists the values and the associated scores. Variable Length of Relationship Length of Relationship Length of Relationship Factor less than one year one to three years greater than three years Score 3 2 1

Using the above scores in case of in-operative or dormant accounts that have been opened more than three years ago will result in a lower score. However, since the account has been inoperative or dormant the Bank does not necessarily have sufficient updated information regarding the customers transactions or nature of business and a resulting lower categorisation purely based on account opening is incorrect. In order to adjust for this anomaly, the last operation date or last transaction date must also be considered. Hence for all accounts that have an account opening date greater than three years the following conditions must be applied and the scores readjusted to accurately reflect the Banks knowledge of their customer : Length of Relationship is greater than three years: Additional Variable Factor Last Operation Date Less than one year Last Operation Date one to three years Last Operation Date greater than three years Score 1 2 3

30

Customer Identification Customer identification means identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information9 The Customer Identification variable score is based on the Banks ability to collect from the customer all the required verification documentation. Lack of sufficient documentation and information that does not allow a Bank to establish, to a satisfactory level, the identity of the customer poses a higher risk to the Bank. The table below lists the values and the associated scores. Variable Customer Identification Customer Identification Customer Identification Customer Identification Factor KYC Complete KYC Incomplete KYC Pending (within 10 days of account opening) KYC Expired Score 1 3 3 2

Industry Sector The industry sector variable evaluates the inherent risk a customer poses due to the nature of business or the industry the customer operates in. Regulatory guidelines classify certain industry sectors such as bullion dealers and sub-dealers, jewellers, etc. as potentially vulnerable to money laundering and as such are considered higher risk sectors. To maintain consistency of data and reporting standards, the Bank has adopted the National Industrial Classification of 2008 (NIC), developed and maintained by the Government of India10, that seeks to provide a basis for the standardised data collection, analysis and dissemination of industry (economic activity) wise economic data for India. Due to the exhaustive nature of the list, only the industries that are vulnerable to potential money laundering and terrorist financing are listed in Annexure I. The list is also known as the Sensitive Industry List (SIL). Nationality As a result of varying levels of corruption, organized criminal activity, and differing quality of regulation / legislation different countries create different levels of risks of money laundering and terrorist financing. The Nationality variable evaluates the risk posed by each country in

Reserve Bank of India, KYC Master Circular July 1 2011. RBI/2011- 12/72 DBOD. AML. BC. No. 2 /14 .01.001/2011-12 10 Central Statistical Organisation, Ministry of Statistics and Programme Implementation

31

order to consider the possibility of a customer relationship being vulnerable to money laundering or terrorist financing. The ISO 3166, codes for the representation of names of countries and their subdivisions is a commonly accepted international standard. The country risk categorisation takes into consideration the following factors: 1. Whether the country is a member of the Financial Action Task Force; 2. Whether the country is on the United Nations Sanctions List; 3. Whether the country is classified as Primary Money Laundering Concern on the International Narcotics Control Strategy Report 2011 (INSCR) published by the United States Government; 4. The countrys 2010 Corruption Perception Index (CPI) published by Transparency International; and 5. Whether the country is classified as a Terrorist Safe Haven by the United States Government. A complete list of the countries broken down by their risk categorisation is given below. Score 3 Countries
AFGHANISTAN ALBANIA ALGERIA ANDORRA ANGOLA ANGUILLA ARGENTINA ARMENIA ARUBA AZERBAIJAN BAHAMAS BANGLADESH BARBADOS BELARUS BELIZE BENIN BERMUDA BOLIVIA BOSNIA AND HERZEGOVINA BURKINA FASO BURUNDI CAMBODIA CAMEROON CAYMAN ISLANDS CENTRAL AFRICAN REPUBLIC CHAD COMOROS CONGO
11

COUNTRY NAME GAMBIA GIBRALTAR GUATEMALA GUERNSEY GUINEA GUINEA-BISSAU GUYANA HAITI HONDURAS INDIA11 INDONESIA IRAN IRAQ ISLE OF MAN JAMAICA JERSEY KAZAKHSTAN KENYA KIRIBATI KOREA, DEMOCRATIC PEOPLE'S REPUBLIC KYRGYZSTAN LAO PEOPLE'S DEMOCRATIC REPUBLIC LEBANON LIBERIA LIBYA LIECHTENSTEIN MACAO MADAGASCAR

MYANMAR NEPAL NICARAGUA NIGER NIGERIA PAKISTAN PALAU PANAMA PAPUA NEW GUINEA PARAGUAY PHILIPPINES RUSSIAN FEDERATION SAMOA SAO TOME AND PRINCIPE SENEGAL SEYCHELLES SIERRA LEONE SOLOMON ISLANDS SOMALIA SRI LANKA SUDAN SYRIA TAJIKISTAN TANZANIA TIMOR-LESTE TOGO TONGA TURKMENISTAN

India is classified as a high risk jurisdiction. However, since a large majority of customers (approximately 99%) in the co-operative sector are individuals with nationality Indian, the value of the variable is considered to be low since it is common across the entire population.

32

COUNTRY NAME CONGO, THE DEMOCRATIC REPUBLIC COOK ISLANDS CTE D'IVOIRE CYPRUS DJIBOUTI DOMINICAN REPUBLIC ECUADOR EGYPT EQUATORIAL GUINEA ERITREA ETHIOPIA GABON MALAWI MALAYSIA MALDIVES MALI MAURITANIA MEXICO MOLDOVA MONACO MONGOLIA MONTSERRAT MOROCCO MOZAMBIQUE TURKS AND CAICOS ISLANDS UGANDA UKRAINE UZBEKISTAN VANUATU VENEZUELA VIET NAM YEMEN ZAMBIA ZIMBABWE

Score 2 Countries
LAND ISLANDS AMERICAN SAMOA ANTARCTICA ANTIGUA AND BARBUDA BAHRAIN BONAIRE, SINT EUSTATIUS AND SABA BOUVET ISLAND BRAZIL BRITISH INDIAN OCEAN TERRITORY BULGARIA CHINA CHRISTMAS ISLAND COCOS (KEELING) ISLANDS COLOMBIA CROATIA CUBA CURAAO CZECH REPUBLIC EL SALVADOR FALKLAND ISLANDS (MALVINAS) FAROE ISLANDS FIJI FRENCH GUIANA FRENCH POLYNESIA FRENCH SOUTHERN TERRITORIES GEORGIA GHANA GREECE COUNTRY NAME GRENADA GUADELOUPE GUAM HEARD ISLAND AND MCDONALD ISLANDS HOLY SEE (VATICAN CITY STATE) HUNGARY ITALY KUWAIT LATVIA LESOTHO LITHUANIA MACEDONIA MARSHALL ISLANDS MARTINIQUE MAYOTTE MICRONESIA MONTENEGRO NAMIBIA NAURU NEW CALEDONIA NIUE NORFOLK ISLAND NORTHERN MARIANA ISLANDS PALESTINIAN TERRITORY, OCCUPIED PERU PITCAIRN RUNION ROMANIA SAINT BARTHLEMY SAINT HELENA, ASCENSION AND TRISTAN DA CUNHA SAINT KITTS AND NEVIS SAINT LUCIA SAINT MARTIN (FRENCH PART) SAINT PIERRE AND MIQUELON SAINT VINCENT &THE GRENADINES SAN MARINO SAUDI ARABIA SERBIA SINT MAARTEN (DUTCH PART) SLOVAKIA SOUTH AFRICA SOUTH GEORGIA AND THE SOUTH SANDWICH ISLANDS SOUTH SUDAN SURINAME SVALBARD AND JAN MAYEN SWAZILAND THAILAND TOKELAU TRINIDAD AND TOBAGO TUNISIA TURKEY TUVALU UNITED STATES MINOR OUTLYING ISLANDS VIRGIN ISLANDS, BRITISH VIRGIN ISLANDS, U.S. WALLIS AND FUTUNA

33

GREENLAND

COUNTRY NAME RWANDA

WESTERN SAHARA

Score 1 Countries
AUSTRALIA AUSTRIA BELGIUM BHUTAN BOTSWANA BRUNEI DARUSSALAM CANADA CAPE VERDE CHILE COSTA RICA DENMARK DOMINICA ESTONIA FINLAND FRANCE COUNTRY NAME GERMANY HONG KONG ICELAND IRELAND ISRAEL JAPAN JORDAN KOREA, REPUBLIC OF LUXEMBOURG MALTA MAURITIUS NETHERLANDS NEW ZEALAND NORWAY OMAN POLAND PORTUGAL PUERTO RICO QATAR SINGAPORE SLOVENIA SPAIN SWEDEN SWITZERLAND TAIWAN, PROVINCE OF CHINA UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES URUGUAY

Product Type The product type variable is used to capture the inherent risk a product and its associated account types pose to the Bank. Certain products by their very nature are more conducive to money laundering than others. The table below lists all the products offered by the SCBs and their associated scores that can broadly be categorised into one of the following: Product Class Product Current Account Savings Account Term Deposit Product Sub-Type Regular No Frills Fixed Reinvestment Recurring Special General Purpose Loan Consumer Durable Loan Education Loan Vehicle Loan Housing Loan Gold Loans Mortgage Loans Equity Loans Loan against Deposit/Savings Instrument Bills and Letter of Credit Short Term Loans / Cash Credit Medium/ Long Term Loans Short Term Loans / Cash Credit 34 3 1 1 1 1 1 1 1 1 1 1 1 3 2 1 1 2 1 1 2 Score

Deposit

Retail Loans

Loan

Collateral Loans

Institutional Finance Loan Re-Finance

Product Class

Product Operations

Product Sub-Type Medium/ Long Term Loans

Score 1

Transaction Activity CTR and STR A customers transaction activity profile is a key variable to evaluate a potential money laundering or terrorist financing risk. There are two variables that measure the transactional activity variable of a customer: Cash Transaction Reports and Suspicious Activity Reports. The submission of a Cash Transaction Report denotes a high amount of cash activity within the accounts of a customer while a Suspicious Transaction Report denotes unusual or atypical activity within the accounts of the customer. The table below lists the values and the associated scores for Constitution Type Individual: Variable Cash Transaction Report Cash Transaction Report Cash Transaction Report Factor Less than one Between one and three Greater than three Score 1 2 3

The table below lists the values and the associated scores for Constitution Type Entity: Variable Cash Transaction Report Cash Transaction Report Cash Transaction Report Factor Less than three Between three and six Greater than six Score 1 2 3

The table below lists the values and the associated scores for Constitution Type Individual and Entity: Variable Suspicious Transaction Report Suspicious Transaction Report Suspicious Transaction Report Factor No STR filed 2 One STR filed Greater than one STR filed 3 Score 1

35

Appendix II to Chapter 6: High Risk Industry Sectors

# 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Group 252 304 321 329 451 452 453 454 471 472 473 478 479 561 642 661 662 663 681 682 771 791 799 881 889 920 960 Industry Sector Description Manufacture of weapons and ammunition Manufacture of weapons and ammunition Manufacture of jewellery, bijouterie and related articles Other manufacturing Sale of motor vehicles Maintenance and repair of motor vehicles Sale of motor vehicle parts and accessories Sale, maintenance and repair of motorcycles and related parts and accessories Retail sale in non-specialized stores Retail sale of food, beverages and tobacco in specialized stores Retail sale of automotive fuel in specialized stores Retail sale via stalls and markets Retail trade not in stores, stalls or markets Restaurants and mobile food service activities Activities of holding companies Activities auxiliary to financial service activities, except insurance pension funding Activities auxiliary to insurance and pension funding Fund management activities Real estate activities with own or leased property Real estate activities on a fee or contract basis Renting and leasing of motor vehicles Travel agency and tour operator activities Other reservation service and related activities Social work activities without accommodation for the elderly and disabled Other social work activities without accommodation Gambling and betting activities Other personal service activities Risk H H H H H H H H H H H H H H H H H H H H H H H H H H H

36

7 Customer Identification and Verification Program

7.1 Overview
As per the PMLA mandate, a customer identification procedure must be carried out by the Bank on all its existing and new customers and includes steps for: Information to be obtained from the customer during the account opening process of the relationship establishment phase; If required, verifying the information provided by the customers using documentary and non-documentary methods; Specific additional due diligence performed based on the risk perception, account type and the constitution of the account holder; Periodic updates to customer identification data after the account is opened based on risk appraisal of account type and the customer; and Obtaining additional customer information during the course of a financial transaction or when the bank doubts the authenticity of previously obtained customer data or finds it inadequate.

7.2 Applicability
Customer identification is required for any entity or individual that either has an account in one or more branches of the Bank or uses one or more products of the bank even as a walk-in customer. Excepting the applicable relaxations listed in Section 8, the Bank must collect complete and up to date KYC information from all new and existing customers based on their constitution, category and risk score. As per RBI regulations12, any additional information not required for KYC purposes must not be a part of the account opening form and should be collected separately on a voluntary basis after explaining the objective to the customer.

7.3 Basis for Customer Identification

The customer identification and verification process of the Bank is based on whether the customer is a walk-in customer or an existing account holder.

7.3.1

Walk-in Customers

12

Section 2.1 of RBI Master Circular on KYC, AML and CFT norms July 1, 2011

37

Any customer that does not have an account in the Bank or any of its branches and only requires either the purchase or sale of a monetary instrument is referred to as a walk-in customer. Banks sell a variety of monetary instruments (e.g. bankers cheques or drafts, including foreign drafts, money orders or cashiers checks and travellers checks) in exchange for currency. Purchase and use of these instruments is a common method used by money launderers to evade large currency transaction reporting requirements as they can be then deposited in accounts with other banks to facilitate the movement of funds through the payment system. In many cases, the persons involved do not have an account with the bank from which the instruments are purchased. In case of transactions carried out by a walk-in customer, in line with the regulatory guidelines, the CRO or the BM must verify the identity and address of the customer when the transaction amount equals or exceeds Rupees fifty thousand (Rs. 50,000), whether conducted in a single transaction or several seemingly connected transactions and also in the case of an international money transfer operation. If the CRO or BM has reason to believe that a customer is intentionally structuring transactions below the identified threshold they may verify the identity and address information of the customer. The CRO or BM may also consider filing a STR. In order to verify the identity and address, the customer conducting the transaction must be classified into a constitution and category as listed in Appendix 1, Chapter 8 and then the information and documentation corresponding to a high risk classification must be obtained. The record for the sale or purchase of monetary instruments must include: Name of purchaser; Date of purchase; Type of instrument purchased; Serial number; Amount of each instrument and currency purchased in; Purpose of instrument; and Specific identification information. Section 14.1 defines the record retention requirements for the Bank and it is required that information on all walk-in customers be recorded in a separate file. 7.3.2 Account Holders All customers, excepting those qualifying for the relaxations as listed in section 8, which are currently account holders at the Bank or wish to open a new account, are subject to the Banks customer acceptance and identification procedures.

7.4 Customer Due Diligence

38

Customer Due Diligence (CDD) can be defined as any measure undertaken by the Bank to collect and verify information provided by the customer and positively establish the identity of the customer. As listed in the IBA guidelines, the CRO must perform CDD on the customer when it: 1. 2. 3. 4. Establishes a new business relationship; Carries out an occasional transaction; Suspects money laundering or terrorist financing; or Doubts the authenticity of the documents, data or information previously obtained for the purpose of identification or verification.

Similarly as outlined in the IBA guidelines, if the CRO is unable to apply relevant due diligence measures, he or she 1. Must not establish a business relationship or carry out an occasional transaction with the customer; 2. Should not carry out a transaction with or for a customer through a bank account; 3. Should freeze or terminate all existing business relationships with the customer; and 4. Should consider reporting it to FIU-IND or to the regulators, in accordance with the guidelines. The Bank will perform three types of Due Diligence as follows. 7.4.1 Basic Due Diligence All customers at the Bank must provide officially valid documents as a part of the account opening process in order to fulfil their KYC requirements. The documents required are based on the constitution, category and risk categorisation score of the customer. All low and medium risk customers must undergo Basic Due Diligence (BDD). A full list of the documents required for Basic Due Diligence for each type of customer is provided as a checklist in Appendix I, Section 7, to this chapter. 7.4.2 Simplified Due Diligence While the current policy has been designed to provide adequate flexibility in the collection of KYC information and documentary evidence, it has been observed that in certain cases customers, especially low income groups in rural as well as urban areas, are not able to provide the documentary evidence required by the Basic Due Diligence process. RBI guidelines recommend that banks do not exclude financially weaker sections of society from access to banking services because of the KYC, AML and CFT requirements13. Any CDD measures less stringent than the Basic Due Diligence measures are termed as Simplified Due Diligence (SDD). Customers applicable for Simplified Due Diligence and its measures are listed separately in Chapter 8.

13

RBI Master Circular on KYC, AML and CFT norms July 1, 2011

39

7.4.3

Enhanced Due Diligence Any CDD measures more stringent than the Basic Due Diligence measures are termed as Enhanced Due Diligence (EDD). The policy requires the CRO to perform EDD on high risk customers identified as part of the Customer Risk Categorisation process. A full list of the documents required for Enhanced Due Diligence for each type of customer is provided as a checklist in Appendix I, Section 7, to this chapter. Any system deployed for KYC information management at the Bank should be designed to transparently add on the EDD section based on the risk score of the account.

7.4.4 Steps to perform EDD If the customer categorisation score is low or medium, no EDD is required on the customer. The steps for performing enhanced due diligence on high risk customers are as follows: 1. The CRO must request the customer for any additional information required; 2. If the customer fails to provide the information requested as part of the EDD process, the BM must be notified with a recommendation for an exception or a one for account closure; 3. If the customer provides the required information, the CRO must review the information provided for accuracy, completeness and consistency with available information on the customer. If the information is found satisfactory, the CRO may open the account for the customer; and 4. As part of follow-up, the CRO or the BM, in certain cases may send a letter of thanks by registered post to the recorded address of the customer as well as the introducer. This would serve as a relationship building exercise and also allow the Bank to indirectly verify the address provided by customer as well as the introducer. In case the letter is not delivered and returned to the Bank, the Bank must try and contact the customer or the introducer to determine the reason for the return and update the information accordingly. If no contact is possible and further information is not received, the account must be closed. No customer once classified as high risk is exempt from the EDD process. 7.4.5 Special Cases for Documentary Verification This section covers some of the special cases that could be encountered by the Bank during documentary verification. It is assumed that for most cases the checklist provided in Appendix I of this chapter will suffice. 7.4.5.1 Documents in Languages other than English If the customer provides a document in a language that the CRO cannot read and understand, he or she must use an internal translation resource to obtain a translation of the document in either English or Hindi or the State language. At a minimum, the 40

translation must include the full customer name, a description of the type of document, the date of document and a reference to the content of the document. The translation must also include the name and designation of the translator within the bank. 7.4.5.2 NREGA Job Card or Aadhar Letter If the individual has only provided NREGA job card or Aadhar card for complete KYC purposes, the RBI regulations require that the account opened should be subject to the conditions and limitations of a small account as defined in Section 2.4.14 7.4.6 Name Screening As defined by the IBA August 2011 guidelines, Name Screening refers to the process of determining whether any of the Banks existing or potential customers are part of any blacklists or regulatory lists. The CRO must take reasonable measures to ensure that the customer or authorised signatories of the customer do not match with any known persons having a criminal background. In case of the customer being an entity the CRO must ensure that the entity is not a banned entity or a terrorist organisation. 1) List Sources RBI frequently circulates updates and notifications regarding lists such as the Interpol Terrorism Watch list, UN Sanctions list, United Nation Security Council Resolution (UNSCR) list and the Wanted Persons list published by the Central Bureau of Investigation (CBI). Occasionally these lists are also available freely on the website of the respective organisations. Companies including but not limited to Dow Jones and LexisNexis provide customized lists for a fee and include public sources as well as independently researched listings. In addition the Bank could maintain in-house negative or black-list of internal watchlists containing a list of all individuals and entities that are not permitted to be customers of the Bank for whatever reason. 2) Updation and Validation of Lists The PO is responsible for sourcing, updating and validating all the entities or individuals on the lists. Updates to external lists must be made after a periodic semiannual review of the list or be triggered by an update from one of the list sources itself. The internal lists are created and updated by the PO and the AML Compliance Group. The PO is also responsible for circulating the lists to all the branches of the Bank. 3) Distribution of the Lists The AML Compliance Group must set-up a distribution system to ensure that all branches receive the lists and any updates in a timely fashion. All the updates received by the Compliance Group from the RBI or a vendor must be forwarded to all the branches within 7 days of receipt.

14

Section 2.9 B of RBI KYC Master Circular July 1 2011 circular

41

4) Checking and Management of Matches As a part of the account opening procedures, the CRO must perform list matching for every account holder of the individual constitution type. For entity accounts, the senior managers, beneficial owners and any other individual directly or indirectly connected with the account must undergo list matching. Additionally, such lists could also contain the names of entities and countries which are sanctioned and must be matched against entity names and the countries serviced of all entity account holders. With every update to the list received, the list matching process must be performed at a branch level on all account holders. Also RBI regulations require that the updated lists be maintained in an electronic format. Identifying a Match The IBA guidelines from August 201115 provide guidance on determining if a match can be identified as a positive match. The list matching algorithm must not just be confined to the name of the individual or entity and should match fields such as date of birth, address, country of operations, etc. based on the constitution and category of the account. Once verified that the match is a positive match, the CRO should forward the match to the BM at the Branch. Upon BM confirmation, the customer information, account information and all particulars of the product are forwarded to the PO who is the ultimate decision making authority on reporting list matches. In order to confirm the match, the officer responsible is permitted to reach out to the account holder and verify the details provided. If the officer is satisfied with the explanation provided by the customer, the customer will be required to provide an affidavit of the explanation which shall be appended to the KYC file of the account. Action on Confirmed Matches The Bank must not open an account if there is a positive match with a negative or a blacklist during the account opening process. Any existing accounts that match a negative or blacklist must be frozen immediately and eventually closed. Once the PO validates the information and confirms the matches, the details of the account will be forwarded to the following agencies within 1 business day: 1) Joint Secretary (ISI) Ministry of Home Affairs Fax no: 011 23092569 Tel no: 011 23092736 Email: [email protected] 2) UAPA Nodal Officer of RBI Chief General Manager, Dept. of Banking Operations and Development
15

Section 7.9 KYC Norms and AML Standards Guidance Notes for Banks August 2011

42

Central Office, Reserve Bank of India Anti-Money Laundering division Central Office Building, 13th Floor Shahid Bhagat Singh Marg, Fort, Mumbai 400 001 The Bank shall also file an STR with the FIU-IND covering all the transactions, carried through or attempted, in the accounts with the positive match. White-listing A false positive match is the matching of two individuals that have essentially different identities. In order to deal with the customer appearing frequently as a false positive match during the name screening process, the AML Compliance Group will maintain a white-list that indicates that the customer is acceptable against the given negative lists. If the same customer is scanned subsequently, the system will not show a match for the customer. 7.4.7 External Requests for Freezing of Accounts The FIU-IND or the RBI can also require the Bank to freeze certain accounts by providing information on the account or the account holder. This request could be a result of the Bank confirming a positive match or a request from a foreign country under the U.N. Security Council Resolution 1373 of 2001. The Bank is required to adhere to the request within 1 business day of receiving the request without prior intimation to the account holder. Individuals or entities whose accounts have been frozen are allowed to petition for the unfreezing of the same by submitting an application containing requisite evidence to the Bank. The Bank is required to forward a copy of the application along with the details of the account frozen to: Joint Secretary (IS-I), Ministry of Home Affairs Tel no: 011-23092736 Fax no: 011-23092569 Email: [email protected] Within fifteen days a decision on the unfreezing of the account shall be conveyed to the account holder. 7.4.8 Adverse Information Checks In order to capture the risk associated with any publicly available negative news, the CRO must check for any adverse information on the customer with respect to money laundering, terrorist financing, fraud investigations, etc. The procedure to check for any adverse information on the customer is listed below:

43

The CRO must conduct an Internet search using Google. For guidelines on how to search the Internet using Google, please refer to Annexure A, Guidelines on Performing Background Checks using Google. If any relevant and valid negative information is not found, evidence of the search performed is entered into the KYC file of the account holder as an attachment and no further action is deemed necessary. If however, adverse information is available, the CRO is responsible for saving the information into a document and entering the same into the KYC file of the customer. The customer must then be referred to the BM for a final decision on the account. The final decision on the account must be one of the following: i. Accept the customer without any further Enhanced Due Diligence steps if the adverse information is not substantial and does not pose an increased risk to the Bank. ii. Accept the customer and perform EDD. iii. Reject the customer if the risk posed is deemed too high.

7.4.9 Politically Exposed Person As per the RBI definition16, PEPs are individuals who are or have been entrusted with prominent public functions in a foreign country e.g., Heads of States or Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. Such individuals are considered risky from a money laundering perspective and require additional due diligence and transactional scrutiny. For the Bank, the risks associated with these individuals are not just from a compliance perspective but also from a reputational one. Companies such as Dow Jones and LexisNexis provide customized PEP lists for a fee and the Bank can also conduct an Internet search using Google. For guidelines on how to search the Internet using Google, please refer to Annexure A, Guidelines on Performing Background Checks using Google. Once a customer or a person associated with an account is identified as a PEP or the close relative of a PEP, the Bank is required to perform the following steps: The CRO or the BM should gather all the available information on the PEP and confirm it against information available on the public domain; The CRO or BM must obtain information on the identity of the PEP and source of funds for the account; and The PO at the Bank must sign off on the acceptance of the customer, categorize him as high risk and perform EDD. The account must also be subjected to enhanced transaction monitoring.

16

RBI KYC Master Circular July 1, 2011 (section 2.5)

44

In the event that an existing customer or beneficial owner is identified as PEP, the PO along with the AML Compliance Group will be required to sign off on continuing the relationship. The account and the individual will then be subject to the same process as above for a new PEP account.

45

Appendix I to Chapter 7: Due Diligence Checklist

Checklist Constituti on 1 Individual Category Non Resident Indian

Basic Due Diligence Required Information Full legal name Date of birth Address in India Product type or account type applied for Country of residence Visa type for the country of residence Documentary Verification Obtain a copy of passport page containing photograph to serve as photo identity Obtain a copy of passport page containing address to serve as address proof. If the address does not match address in India, proof can be provided by establishing relationship using the documents listed in Appendix II, Chapter 8 Obtain a copy of a valid visa granted for the current country of residence

Enhanced Due Diligence Additional Information Current residential address Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain an additional photo identity document from list provided in Appendix II, Chapter 8 Obtain additional address proof document from list in Appendix II, Chapter 8

46

Checklist Constituti on

2 Individual

Category

Foreign National

Basic Due Diligence Required Information Full legal name Address in India Nationality Date of birth Product type or account type applied for Indian visa type Information on the Indian employer (name, address etc.). PEP check Documentary Verification Obtain a copy of passport pages containing valid Indian visa and photograph. If the home address is displayed on the passport, obtain a copy of it Obtain a copy of the appointment letter along with an affidavit from the current employer verifying the address of the foreign national Obtain a copy of the employers PAN card or TIN Number

Enhanced Due Diligence Additional Information Address in home country Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain a copy of another photo identity Obtain a copy of another address proof

47

Checklist Constituti on

3 Individual

Category

Person of Indian Origin

Basic Due Diligence Required Information Full legal name Address in India Nationality Date of birth Product type or account type applied for If applicable, Indian employer information PEP check Documentary Verification Obtain a copy of the passport pages containing photograph and address Obtain a copy of the Person of Indian Origin card If employed in India, obtain a copy of the appointment letter along with an affidavit from the current employer verifying the address of the customer

Enhanced Due Diligence Additional Information Address in home country Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain a copy of another photo identity Obtain a copy of another address proof If available, obtain a copy of the employers PAN card or TIN number

48

Checklist Constituti on

4 Individual

Category

Minor

Basic Due Diligence Required Information Full legal name Date of birth of minor account holder Full name of the guardian Date of birth of guardian Relationship of minor account holder with guardian Address of the guardian Product type or account type applied for Documentary Verification Obtain an affidavit from the guardian indicating the relationship with the minor. Optionally, obtain a copy of one of the relationship establishment documents listed in Appendix II, Chapter 8 containing the name of the minor and the guardian and indicating a relationship between them. Obtain a copy of the KYC information (photo and address proof) of the guardian using the documents in Appendix II, Chapter 8

Enhanced Due Diligence Additional Information Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain two copies of photo identity proof documents of the guardian from the Preferred Documents list in Appendix II, Chapter 8 Obtain two copies of address proof documents of the guardian from the Preferred Documents list in Appendix II, Chapter 8

49

Checklist Constituti on

5 Individual

Category

Staff

Basic Due Diligence Required Information Full legal name Date of birth Home address Product type or account type applied for Employee code or number Documentary Verification For ex-staff members, obtain a copy of one photo identity document out of the listing in Appendix II, Chapter 8 except for the identity provided by the Bank For ex-staff members, obtain a copy of one address proof document out of the listing in Appendix II, Chapter 8 except for the identity provided by the Bank. In the case of address proof not being available, the account holder can provide the address proof using the KYC information of another individual and establishing the relationship using the documents listed in Appendix II, Chapter 8 For ex-staff members, obtain documentation certifying past employment with the Bank ( pay slip, letter of appointment, etc)

Enhanced Due Diligence Additional Information For ex-staff, if employed, obtain current employer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain two copies of photo identity proof documents from the Preferred Documents list in Appendix II, Chapter 8 Obtain two copies of address proof documents from the Preferred Documents list in Appendix II, Chapter 8

50

Checklist Constituti on

6 Individual

Category

Hindu Undivided Family

Basic Due Diligence Required Information Full legal name of Karta Date of birth Home address Product type or account type applied for Documentary Verification Obtain a letter from the designated Karta indicating the account category as HUF and listing the names of members of the family Obtain complete KYC information of the Karta (photo and address proof) for account opening purposes using the documents list provided in Appendix II, Chapter 8

Enhanced Due Diligence Additional Information Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain two copies of photo identity proof documents of the Karta from the Preferred Documents list in Appendix II, Chapter 8 Obtain two copies of address proof documents of the Karta from the Preferred Documents list in Appendix II, Chapter 8

51

Checklist Constituti on

7 Individual

Category

Regular

Basic Due Diligence Required Information Full legal name Date of birth Home address Product type or account type applied for Documentary Verification Obtain a copy of one photo identity document out of the listing in Appendix II, Chapter 8 Obtain a copy of one address proof document out of the listing in Appendix II, Chapter 8. In the case of address proof not being available, the client can indirectly provide proof via a combination of the relationship establishment documents as listed in Appendix II, Chapter 8 and the KYC (photo and address proof) of the individual establishing relationship with

Enhanced Due Diligence Additional Information Introducer information Employer information (name, address and industry sector) Source of funds Anticipated account activity Additional Documentary Verification Obtain two copies of photo identity proof documents from the Preferred Documents list in Appendix II, Chapter 8 Obtain two copies of address proof documents from the Preferred Documents list in Appendix II, Chapter 8

52

Checklist Constituti on

8 Individual

Category

Joint

Basic Due Diligence Required Information Full legal name of all the account holders Date of birth of all account holders Home address of all the account holders Product type or account type applied for Relationship between account holders Documentary Verification Obtain complete KYC documentation on all account holders based on their category within the individual constitution

Enhanced Due Diligence Additional Information Obtain all the information for a high risk classification of each member of the joint account based on their respective category within the individual constitution Source of funds Anticipated account activity Additional Documentary Verification Obtain all the documentation for a high risk classification of each member of the joint account based on their respective category within the individual constitution

53

Checklist Constituti on

9 Business Entities

Categor y

Proprietorship

Basic Due Diligence Required Information Name of proprietorship Address of proprietorship Full legal name of the proprietor Home address of the proprietor Industry sector of proprietorship Product type or account type applied for Documentary Verification Obtain a letter of proprietorship to be completed by the client Obtain a copy of any two of the documents under Proof of Proprietorship Documents listing in Appendix II, Chapter 8 Obtain KYC documentation of the proprietor (photo and address proof) from Appendix II, Chapter 8 for account opening purposes

Enhanced Due Diligence Additional Information Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Anticipated account activity Additional Documentary Verification Copy of financials Obtain two copies of photo identity proof documents of the proprietor from the Preferred Documents list in Appendix II, Chapter 8 Obtain two copies of address proof documents of the proprietor from the Preferred Documents list in Appendix II, Chapter 8 Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

54

Checklist Constituti on

10 Business Entities

Categor y

Private Limited

Basic Due Diligence Required Information Name of the company Principal place of business Mailing address of the company Telephone/Fax number Industry sector of concern Names and addresses of account operators and beneficial owners Product type or account type applied for Documentary Verification Obtain a copy of the Certificate of Incorporation for the entity Obtain a copy of the Memorandum and Articles of Association for the entity If available, obtain a copy of the license for the line of business of the entity or any other government registration document available for the entity Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a power of attorney or official document authorizing the individuals operating the account

Enhanced Due Diligence Additional Information Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Anticipated account activity

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

55

Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Checklist Constituti on

11 Business Entities

Categor y

Cooperative

Basic Due Diligence Required Information Name of cooperative Principal address of the cooperative Industry sector of cooperative Names and addresses of authorized account operators and senior managers Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. 56

Documentary Verification Obtain a copy of the registration documents for the entity Obtain a copy of the Byelaws of the cooperative Obtain a copy of the board resolution listing the

authorized signers for the account. Optionally, obtain a power of attorney or official document authorizing the individuals operating the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Optionally, perform a site visit to verify the address of the concern

57

Checklist Constituti on

12 Business Entities

Categor y

Partnership

Basic Due Diligence Required Information Name of partnership Office address of the partnership Telephone/Fax number of the partnership Names and addresses of all the partners Product type or account type applied for Industry sector of partnership

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification Obtain a copy of the partnership deed signed by all the partners If available, obtain a copy of the license for the line of business of the partnership. Or optionally if partnership is registered, obtain a copy of registration documents If available, obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the telephone bill (within 6 months of account opening date) in the name of the entity or the partners Obtain complete KYC documentation of all partners based on their category within the individual constitution

58

Checklist Constituti on

13 Business Entities

Categor y

Limited Liability Partnership

Basic Due Diligence Required Information Name of the entity Office address of the entity Telephone/Fax number of the entity Names and addresses of all the partners and senior managers Product type or account type applied for Industry sector of concern Documentary Verification Obtain a copy of the partnership deed signed by all the partners If available, obtain a copy of the license for the line of business of the partnership. Or optionally, obtain a copy of the registration documents Obtain a copy of the PAN card or TIN information of the entity Optionally, obtain a power of attorney or legal document authorizing members of the partnership to operate the account If available, obtain a copy of the telephone bill (within 6 months of account opening) in the name of the entity Obtain complete KYC documentation of all partners based on their category within the individual constitution 59

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

14 Business Entities

Categor y

Public Limited

Basic Due Diligence Required Information Name of the company Principal place of business Mailing address of the company Telephone/Fax number Industry sector of concern Names and addresses of authorized account operators, senior managers and beneficial owners Product type or account type applied for Documentary Verification If available, obtain a copy of the license for the line of business of the entity. Optionally obtain a government registration document for the entity Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the Certificate of Incorporation for the entity Obtain a copy of the Memorandum and Articles of Association for the entity Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a power of attorney or official document authorizing the individuals operating the 60

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Obtain name and address of beneficial owners of the entity Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Checklist Constituti on

15 Business Entities

Categor y

Hindu Undivided Family

Basic Due Diligence Required Information Name of the entity Principal place of business Mailing address of the entity Industry sector of concern Name and address information of Karta and senior managers Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification If available, obtain a copy of the license for the line of business of the entity. Optionally, obtain any government registration document available for the entity Obtain a declaration from the Karta regarding the setting up of the account Obtain all KYC documentation of the Karta based on the Kartas categorization within the individual constitution If available, obtain a copy of the PAN card or TIN number of the entity

61

62

Checklist Constituti on

16 Trust

Categor y

Public

Basic Due Diligence Required Information Legal name of trust Complete address of trust Names of trustees, settlors and signatories Names and addresses of account operators, founders and the senior managers Product type or account type applied for Documentary Verification Obtain a copy of the trust deed Obtain a copy of the certificate of registration for the trust Any officially valid document identifying trustees, settlors and authorized signatories Obtain complete KYC information of all account operators based on their category within the individual constitution Obtain a copy of the managing body resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account

Enhanced Due Diligence Additional Information Purpose of account (vendor accounts, accounts receivable, etc.) Anticipated account activity Purpose of trust Source of funds

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Copy of financials or annual reports Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

63

Checklist Constituti on

17 Trust

Categor y

Private

Basic Due Diligence Required Information Legal name of trust Purpose of trust Complete address of trust Names and addresses of account operators, trustees, senior managers and the beneficiaries Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.) Details of international presence Source of funds

Documentary Verification Obtain, if available, a copy of the trust deed Obtain a copy of the certificate of registration for the entity Any official document identifying trustees, settlors and beneficiaries Obtain a copy of the managing body resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain complete KYC documentation of all account operators based on their category within the individual

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Obtain name and address of beneficial owners, trustees and senior managers of the trust Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

64

constitution

65

Checklist Constituti on

18 Non Profit Organizations

Categor y

Trust

Basic Due Diligence Required Information Legal name of trust Purpose of trust Complete address of trust Names and addresses of account operators, trustees and the senior managers Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Details of international presence Purpose of account (vendor accounts, accounts receivable, etc.) Details of international presence Source of funds

Documentary Verification Obtain a copy of the trust deed Obtain a copy of the certificate of registration for the trust Any official document identifying trustees, settlors and beneficiaries Obtain a copy of the managing body resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document listing the members authorized to operate the account If available, obtain a copy of the Annual Reports and financial documents of the entity

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

66

Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Checklist Constituti on

19 Non Profit Organizations

Categor y

Society

Basic Due Diligence Required Information Legal name of Society Purpose of Society Complete address of Society Product type or account type applied for Names and addresses of account operators, trustees and beneficial owners

Enhanced Due Diligence Additional Information Anticipated account activity Details of international presence Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Byelaws of the society Obtain a copy of the registration documents for the entity

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

67

If available, obtain a copy of the Annual Reports and financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

68

Checklist Constituti on

20 Non Profit Organizations

Categor y

Section 25

Basic Due Diligence Required Information Legal name of organization Purpose of organization Complete address of organization Product type or account type applied for Names and addresses of account operators, trustees and the senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Details of international presence Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Memorandum and Articles of Association of the entity Obtain a copy of the registration documents for the entity Optionally, obtain a copy of the Annual Reports and financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

69

constitution

70

Checklist Constituti on

21 Societies and Associations

Categor y

Registered

Basic Due Diligence Required Information Legal name of Society Purpose of Society Complete address of Society Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Byelaws of the society Obtain a copy of the Annual Reports or financial documents of the entity Obtain a copy of the registration documents for the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

71

Checklist Constituti on

22 Societies and Associations

Categor y

Unregistered

Basic Due Diligence Required Information Name of Society Purpose of Society Complete address of Society Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Byelaws of the society Optionally, a copy of the Annual Reports or financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

72

Checklist Constituti on

23 Government, Government Agency or Categor Entity y

State Government

Basic Due Diligence Required Information Legal name Purpose of government body; Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government

73

Checklist Constituti on

24 Government, Government Agency or Categor Entity y

Central Government

Basic Due Diligence Required Information Legal name Purpose of government body Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. 74

Documentary Verification Obtain an authorization letter from the government body

wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Optionally, perform a site visit to verify the address of the concern

Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government

75

Checklist Constituti on

25 Government, Government Agency or Categor Entity y

State Undertaking

Government

Basic Due Diligence Required Information Legal name Industry sector of undertaking Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the Certificate of Incorporation of the entity Obtain a copy of the Memorandum and Articles of Association of the entity Obtain a copy of the audited annual report Obtain a board resolution indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling 76

department of the government agency or entity

Checklist Constituti on

26 Government, Government Agency or Categor Entity y

Central Government Undertaking

Basic Due Diligence Required Information Legal name Industry sector of undertaking Complete address Product type or account type applied for Names and addresses of account operators Documentary Verification Obtain a copy of the Certificate of Incorporation of the entity Obtain a copy of the Memorandum and Articles of Association of the entity Obtain a copy of the audited annual report Obtain a board resolution indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

77

open the account through an enquiry with the controlling department of the government agency or entity

78

Checklist Constituti on

27 Government, Government Agency or Categor Entity y

Liquidator

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Name of company under liquidation Industry sector of company under liquidation Names and addresses of account operators Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Obtain a copy of the court order of appointment to act as liquidator

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.)

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

79

Checklist Constituti on

28 Government, Government Agency or Categor Entity y

Government Authorities, Autonomous & Regulatory Bodies Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Basic Due Diligence Required Information Legal name Purpose of government body Complete address Product type or account type applied for Names and addresses of account operators Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government agency or entity

80

Checklist Constituti on

29 Government, Government Agency or Categor Entity y

Local Bodies

Basic Due Diligence Required Information Legal name Purpose of government body Complete address Product type or account type applied for Names and addresses of account operators Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government agency or entity

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.)

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

81

Checklist Constituti on

30 Financial Institutions

Categor y

Public Sector Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the RBI registration or license information for the bank Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the board resolution or an official letter indicating the officials authorized to operate the account Obtain a copy of the Memorandum, Certificate of Incorporation and the Articles of Association for the bank It is desirable to obtain, in affidavit form, the KYC policy of the bank Obtain a copy of the annual audited report for the previous 82

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

financial year Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Checklist Constituti on

31 Financial Institutions

Categor y

Private Sector Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of beneficial owners, account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the RBI registration or license information for the bank Obtain a copy of the PAN card or TIN of the entity Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the Articles of Association and Certificate of Incorporation for the bank

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

83

Basic Due Diligence If the company is held by a publically traded company, obtain information on parent companys ownership, listing and nature of activities Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account It is desirable to obtain, in affidavit form, the KYC policy of the bank Obtain complete KYC documentation of all account operators based on their category within the individual constitution Obtain information on the Board and CEO of the bank including current country of domicile

Enhanced Due Diligence Obtain name and address of beneficial owners of the bank Obtain information on AML measures implemented

84

Checklist Constituti on

32 Financial Institutions

Categor y

Regional Rural Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Holding bank information (name, address, registration information) Names and addresses of account operators and senior managers Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws of the bank It is desirable to obtain, in affidavit form, KYC policy of the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

85

constitution

Checklist Constituti on

33 Financial Institutions

Categor y

Urban Cooperative Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws of the bank It is desirable to obtain, in affidavit form, KYC policy of the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account 86

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Checklist Constituti on

34 Financial Institutions

Categor y

State Cooperative Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws of the bank It is desirable to obtain, in affidavit form, KYC policy of the bank

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

87

Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Obtain information on AML measures implemented

Checklist Constituti on

35 Financial Institutions

Categor y

District Cooperative Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank 88

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to

Obtain a copy of the Byelaws the bank It is desirable to obtain, in affidavit form, KYC policy of the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

verify the address of the concern Obtain information on AML measures implemented

Checklist Constituti on

36 Financial Institutions

Categor y

Money Service Businesses

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of beneficial owners, account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the license to operate for entity or NFBC

Additional Documentary Verification Public information in standard industry guides, periodicals, publications 89

status with the Reserve Bank of India Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the Memorandum, Articles of Association for the entity and Certificate of Incorporation for the entity Obtain information on the Board and CEO of the bank including current country of domicile Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern AML policies and procedures implemented Obtain name and address of beneficial owners of the entity

Checklist 37 Constitution Financial Institutions

Category Non-Banking Financial Company

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of beneficial owners, account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Any additional information on purpose of business Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable,

90

etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the license to operate for entity Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the Memorandum, Articles of Association and the Certificate of Incorporation of the entity Obtain information on the Board and CEO of the bank including current country of domicile Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern AML policies and procedures implemented Obtain name and address of beneficial owners of the entity

Appendix II to Chapter 7: List of Officially Valid Documents

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Verification documents for individuals (identity and address proof) are divided into preferred and acceptable documents. It is recommended that whenever available, documents from the preferred list should be used for verification purposes.

Photo Identity Documents

Preferred Documents Driving License PAN Identity Card Passport Voter Identity Card Acceptable Documents Aadhaar card* Govt. Department Identity Card Letter from MP/MLA/MC/GZ Officer including a notarized photograph NREGA Job Card* Social Security Card (If Applicable)

Address Proof Documents

Preferred Documents Driving License Passport Voter Identity Card Acceptable Documents Any id containing address issued by Govt. Bank Account Statement (for six months prior to account opening) Bank Passbook Employer certificate (not older than six months from account opening) Gas Bill (not older than six months from account opening) Income Tax Return (latest) Letter from MP/MLA/MC/GZ Officer attesting to address NREGA Job Card Property Tax Assessment Order Residential Permit issued by state police Water Bill (not older than six months from account opening)

* Please note that if the Aadhar Card,

Aadhar Letter or the NREGA Job card is exclusively provided for KYC purposes, then the bank account opened will be subjected to all conditions and limitations prescribed for small accounts as described in section 2.4

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Relationship Establishment Documents

Listed Documents Birth Certificate Marriage Certificate PAN Card Passport School certificate showing relationship Voter ID Card Any other document establishing relationship issued by the Govt. of India

Proof of Proprietorship Documents

(Any two documents required in the name of the proprietary concern) List of Documents Certificate/license issued by Municipal Authorities under Shop & Establishment Act Certificate/registration document issued by Sales Tax/Service Tax/ Professional Tax authorities CST/VAT certificate License issued by Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian medical Council and Food and Drug Control Authorities Registration certificate issued in the name of the proprietary concern by the Central Government or State Authority Department Sales and Income Tax returns IEC (Importer Exporter Code) issued by the office of DGFT 93

8 Relaxations to KYC Information Collection Requirements

Relaxation in Due Diligence procedures also known as SDD as defined in section 7.4.2 are prescribed to allow customers access to banking services in spite of not being able to produce the requisite documentation at the time of account opening.

8.1 Small Accounts

A definition of small accounts is provided in Section 2.4 and these accounts are allowed relaxations in procedures subject to the following conditions: The individual wishing to create the account produces a self-attested photograph and affixes his or her signature or thumb print on the account opening form; The designated officer of the bank, while opening the small account, certifies with his or her signature that the above step was conducted in the officers presence; The branch at which the small account has been created is on CBS or is in a branch where it is possible to manually monitor the account and ensure that foreign remittances are not credited to the account and that the stipulated limits on aggregate monthly and annual transactions are not breached, before any transactions are allowed to take place; No foreign remittances shall be permitted to be credited into a small account unless the identity of the individual operating the account has been fully established by the production of valid documents via the usual KYC procedures; The small account is monitored and when any suspicion of money laundering or financing of terrorism or a high risk scenario is reported through the monitoring mechanism, then the identity of the individual shall be established via the usual KYC procedures within two months; and A small account shall initially remain operational for a period of twelve months beyond which only if the account holder provides evidence of having applied for the officially required identifying documents shall the account be permitted to operate. The entire relaxation of documentary provisions shall be reviewed with respect to the account at the end of a twenty four month period. If the conditions of a Small Account are violated, the account shall be required to fulfil its CDD obligations, based on the new constitution and category assigned, within a period of 30 days. Failing KYC compliance beyond this period, it is recommended that activity on the account be restricted or considered for closure.

8.2 Customers through Introducer

Individuals in urban and rural areas belonging to low income groups are sometimes not able to produce documents required to meet the CDD requirements of the Bank.

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As per the RBI norms17, if these individuals intend to keep balances not exceeding Rupees fifty thousand (Rs. 50,000) in all their accounts taken together and the total credit in all their accounts taken together is not expected to exceed Rupees one lakh (Rs. 1,00,000) in a year; then The Bank can open an account subject to: Introduction provided by another account holder who has been subjected to a full KYC procedure and is compliant. The introducers account at the Bank should be at least six months old, currently active and not have any transaction reports filed against it. The photograph of the individual proposing to open the account as well as the address of the account holder must be certified by the introducer. OR Any other documentary evidence not part of the standard checklist for the individual customer type which is however to the satisfaction of the Bank can be accepted. The condition for Simplified Due Diligence requires the individual stay in the prescribed limits. Should the individual exceed the limits, no further transactions will be permitted until the full CDD compliance process is completed. In order not to inconvenience the customer, it is advised that the bank notify the customer once the balance reaches Rupees forty thousand (Rs. 40,000) or total credit in the account in the year reaches Rupees eighty thousand (Rs. 80,000) requesting that CDD compliance procedures be completed else operations on the account would cease upon reaching the limit. Note that this relaxation facility is only provided for account holders of the constitution type individual.

17

Section 2.8 of RBI Master Circular on KYC, AML and CFT norms July 1, 2011

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9 Account Opening Process

9.1 Determine Type of the Customer and Obtain Basic Customer Information
Based on constitution and category as specified in Section 5, the Staff Assistant (SA) must obtain basic information from the customer and enter the information into the customers KYC file. Even if the customer is an existing account holder or has transferred from another branch of the Bank, the customer (individual or entity) must complete an account opening form for the current branch.

9.2 Obtain or Calculate the Customer Risk Categorisation Score

The CRO must enter all the basic information collected into the KYC file of the customer and, if available, obtain the customer risk categorisation score from the KYC system. In the absence of an automated risk scoring module or system, the CRO must manually calculate the customer risk categorisation score on a risk scoring form. The customer categorisation score determines if any EDD needs to be performed on the customer.

9.3 Determine If Customer qualifies for Simplified Due Diligence

Once the basic customer information is in the KYC file, the CRO must document whether a request for SDD has been made. If so, the CRO must obtain any available documentary and non-documentary evidence establishing the basis of the requirement and should capture it in the KYC file of the customer. It is the BMs prerogative to exempt the customer from BDD based on the information provided by the CRO. Relaxations are granted for small accounts and for certain accounts with valid introducer information as described in Chapter 8. Once SDD has been performed, no documentation shall be required unless the terms of the relaxation are violated. At the end of the small account relaxation period, if the documentation is still incomplete or the account is perceived as being too high a risk, the CRO must notify the BM with a recommendation for closure of the account.

9.4 Verify the Identity of the Customer Using Documentary Methods

Once the CRO obtains the identifying information requested from the customer and adds it to the KYC file of the customer, the CRO must then conduct appropriate CDD measures and ascertain the identity of the customer using documentary evidence based on the submitted. The checklist in Appendix I, 96

Chapter 7, covers the appropriate documentary evidence required for a particular customer type. Section 7.4 covers the policies and procedures to be followed for Customer Due Diligence. The CRO must also consider special cases of documentary verification as described in Section 7.4.5. Based on the risk score generated, the CRO could be required to perform either BDD or EDD as described in section 7.4.1 or 7.4.3 and any information or documents required as a result of it must also be requested from the customer. Detailed checklist of information and documents to be collected from customers for BDD or EDD are presented in Appendix I of Chapter 7. The list of officially valid documents is presented in Appendix II of Chapter 7. In the case where the customer is an existing account holder, and wishes to open a new account, the CRO or the officer permitting operations on the account must ensure that the customers existing account is compliant and if so must only request the deficit of documentation between the new and existing account types. In the case where the customer has transferred from another branch, the CRO must reach out to the previous branch and obtain the KYC, AML and CFT related documentation from the branch within a period of 30 days. At the end of the process, if the documentation is still incomplete or the account is perceived as being too high a risk, the CRO must notify the Branch Manager with a recommendation for closure of the account.

9.5 Perform Background Checks

Any individual associated with an account as the owner, account operator or beneficiary must undergo the name screening or list matching process as described in Section 7.4.6. Foreign nationals should undergo a PEP check as described in Section 7.4.9. Individuals and Entities should also undergo adverse information checks. Additionally, the Bank could use the PAN verification services provided by the Income Tax Department18 to verify the PAN information of customers that have provided it. Additionally, in the case where the EDD process requires the use of nondocumentary methods for verification, the CRO is required to conduct the process of non-documentary verification. The outcome of the verification process and the decision following the outcome must be recorded in the KYC file of the customer along with a list of next steps for the account. At the end of the non-documentary verification process, if the account is perceived as being too high a risk, the CRO must notify the BM with a recommendation for closure of the account.

9.6 Collect Introducer Information

18 PAN verification services are available via the Tax Information Network of the Income Tax Department at https://www.tin-nsdl.com/

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It is recommended that the introducer information be captured as a part of the account opening process. The CRO is responsible for ensuring that a relationship exists between the customer and the introducer. The officer must also verify that the introducers account is KYC compliant and is responsible for ensuring that the introducer has not previously introduced an excessive number of accounts. The CRO must also note if the introducer is a staff member at the bank and if so, a relationship truly exists between the staff member and the customer.

9.7 Identify Details for Entity Customers

The CRO is required to create a profile of the entity from the information provided and the documentary and non-documentary evidence submitted. This profile must contain details as to whether the entity is public or private, services provided by the entity, etc. For customers such as mutual funds or investment vehicles that do not disclose the names of underlying investors or managing members, the CRO is required to make a greater effort to identify the names of key management personnel as well as obtain a general description of the funds targeted investor audience and capture it in the KYC file of the customer. The officer must obtain a prospectus or investment management agreement from the entity in order to ascertain this information. If the above mentioned documents are not available, the information can be obtained directly from the entity in the form of an email from an official email id, signed letter on the company letterhead or any other such official document.

9.8 Identify Controlling Parties and Beneficial Owners

The CRO must identify and ascertain the controlling parties and beneficial owners for an entity. As complex ownership structures may be used to conceal the origin of funds and identity of the ultimate beneficial owner, the account opening officer should perform all the due diligence required to identify the individuals, families and entities which are the ultimate beneficial owners of the entity.

9.9 Obtain Approvals

After completion of all of the above steps, the customer file must be signed off by the CRO with identifying information such as name and designation of the officer and entered into the file. The BM has the authority to either accept the customer, reject the customer or to refer the account to the PO for further disposition.

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Customer

Goes to the Bank

Appendix I to Chapter 9: Account Opening Flowchart

SA

Obtains basic customer information from the customer

Determine risk level

Check if SDD is applicable

Introducer Information Capture

CRO

Simplified Due Diligence

No
Customer Due Diligence

ID controlling parties

Individual or Entity?

Entity Individual
Perform background checks

Yes
Submit for approval

BM
99

No
Approved?

Customer rejected

Ye s

Customer Accepted

10 Customer Information Update

The prescribed regulatory guidelines require customer information to be periodically reviewed and updated based on the customer risk categorisation score. Additionally, any new KYC related information on a customer received between periodic reviews must trigger an update to the customer information on file. The IBA guidelines from August 2011 define KYC Updation as a process of customer identification and consequent re-affirmation of his identity using reliable, independent source documents, data or information available, in addition to the collection of a photograph.

10.1 Schedule of Reviews

Periodic reviews conducted on all customers will help verify that the information the Bank has on file is up-to-date and accurate. In tune with the RBI regulations, the Bank will follow a risk based approach towards updating customer information. Based on the customers risk categorisation, the schedule for a periodic review is listed below: Risk Categorization High Risk Medium Risk Low Risk Review Period 1 Year 2 Years 3 Years

10.2 Procedures for Periodic Reviews

Procedures to be followed for conducting periodic reviews on the customers are listed below: Using the information on file, the CRO shall initiate the process by reaching out to the customer, for the additional information or documentation refresh, as per the requirements of the policy. Annexure B provides guidance and scripts for communicating with the customer. The CRO shall also provide a 30 day window to the customer for the submission of all the required information and documentation. The attempt to contact, its outcome and the decision following the attempt must be logged into the KYC file of the customer along with a list of next steps for the account. If the necessary documentation is not received by the 25th day of the initial contact with the customer, the CRO shall contact the customer via the information available on file and request an update. Annexure B provides guidance and scripts for communicating with the customer. On 100

the basis of the update provided, the CRO shall provide a further 15 day extension bringing the total exemption period to 45 days. The attempt to contact its outcome and the decision following the attempt must be logged into the KYC file of the customer along with a list of next steps for the account. At the end of the exemption period, if the documentation is still incomplete, the CRO must transfer the account to the BM with a recommendation for restricting activity on the account by freezing it. Upon receipt of information from the Customer, the CRO shall enter the information into the KYC file of the customer and escalate any material findings as necessary (e.g. change in risk rating of the customer or identification of a PEP). Based on these findings, the BM can request additional information or documentation from the customer subject to the earlier defined extension periods. Any written information or communication obtained from the customer should constitute a part of this update. Once the CRO has verified the information and completed the process, the Officer shall sign off on the updates provided including information identifying the Officer.

10.3 Change in Category or Constitution

In the event that an entity or individual account type requests a change in its category or constitution, the CRO or BM must examine both the current customer type and the requested customer type and obtain only the KYC information and documentation in deficit of the new requirements. The CRO must request the customer to complete a new account opening form and provide it to the bank.

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11 Account Cancellation and Closure

This section lists out the procedure to be followed by the BM for the closure of a customer account or cancellation of a transaction for one of the following reasons: If the account or transaction poses a high risk from a money laundering or terrorist financing perspective. Failure of the customer to update or provide the required KYC information. Senior Management recommends closure of the account. Recommendation for account closure by regulatory authorities.

11.1 Initiation of Customer Relationship Closures

The BM and the CRO must jointly agree to close the account in the case of one or more of the above mentioned reasons. The BM will document the decision to close the account in the KYC file and shall initiate the following procedure: 11.1.1 Internal Notification The BM must notify each of the individuals or groups listed below before proceeding with account closure: AML Compliance Group Audit department

In the case of an external recommendation, the regulatory authorities must be notified. A copy of the notification letter must be attached to the KYC file of the account holder. 11.1.2 Scheduling Closure The BM in consultation with Senior Management at the head office will determine the appropriate schedule and timeline for the closure of the account based on the following two factors: Reason for closure of the account; and Extent of pending business between the bank and the account holder the decision to close the account and the days before the actual closure date. A copy must be attached to the KYC file of the effective on the end of business day on the

The CRO shall notify the client of effective day of closure, at least 30 of the notification communication account holder. The closure will be date mandated for account closure.

In the event of a request for extension on the account closure date, only the BM is authorized to do so after explicitly notifying the CRO and the Senior 102

Management at the branch of the Bank. The decision to grant an extension must also be recorded in the KYC file of the customer. 11.1.3 Transaction cancellation In the case of transactions by walk-in customers where there isnt an associated account, the BM will determine if any additional steps are required beyond cancelling the transaction (e.g., prohibiting any further activity, such as account opening, for the non-customer). In order to do so for walk-in customers, the Bank should add them to their negative or black-list.

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12 Internal controls
Internal Controls are necessary in order to limit the Banks KYC, AML and CFT risk. The internal controls are designed to annually measure the overall KYC, AML and CFT risk the Bank faces and the effectiveness of the Bank in addressing them. The PO and the AML Compliance Group are responsible for developing and implementing the controls that will track the compliance with the prescribed policy and procedures including conducting and updating the various risk assessments as discussed below.

12.1 Products and Services Offered by the Bank

AML Compliance group must ensure that all existing products and new products are evaluated and analysed from a KYC, AML and CFT risk perspective. The evaluation must include the approach to calculating the score for the Product Risk variable in the Customer Risk Categorisation model. All new products must be added to the model and assigned an appropriate risk score.

12.2 Customer Acceptance and Identification Procedures

The AML Compliance Group must annually review the different types of customers being accepted, their risk level and the documentation being provided for proper identification of the customer. Particular attention must be paid to high risk customers ensuring that the enhanced due diligence procedures are being followed. Any grievances regarding the customer acceptance and identification policy or procedure, for particular customer types, must be addressed as part of the review. Updates to the customer acceptance and identification policy or procedure must also be addressed as part of the review.

12.3 Country Risk Assessment Procedures

The PO and the AML Compliance Group are responsible for ensuring that the country risk rankings are annually reviewed and updated. Regulators from time to time send notices regarding updates to the UN sanction lists or jurisdictions that are not compliant with the Financial Action Task Force (FATF) recommendations. The Bank must ensure that these countries are appropriately scored and regularly updated The overall methodology of risk ranking the countries must also be reviewed periodically to apply changes in the World Bank governance rankings, changes in the Transparency International Corruption Index or changes in FATF membership, etc.

12.4 Customer Risk Assessment Procedures

The Bank currently performs customer risk categorisation using seven (7) variables for Individuals and seven (7) variables for Entities. The AML Compliance Group and the PO must annually review the customer risk categorisation model and ensure that the variables chosen continue to remain relevant and the data behind the variables is accurately being captured and scored. 104

12.5 KYC, AML and CFT Policy and Procedure Reviews

The policy requires the Bank to conduct an annual review of its KYC, AML and CFT policies and procedures and their implementation to ensure: The Bank complies with updates or changes to regulatory requirements; The Bank is abreast of best practices and new techniques in the field of KYC, AML and CFT.

12.6 Actions of the AML Compliance Group

12.6.1 Self-assessment Procedures Create KYC, AML and CFT questionnaires to test the knowledge of the CRO, BM and other senior officials at each branch regarding the current policies and procedures being followed. Use the results of the test to obtain a true picture of the understanding of policies and procedures at the bank so as to apply any corrective measures if necessary. Any feedback obtained through the questionnaires shall be used to identify any additional money laundering and terrorist financing risks currently present but not yet identified by the Compliance Group at the Bank.

12.6.2 Updates on Policy and Procedures Disseminate to the officers, through training and education, any updates or changes in the regulatory policy as described in Section 15. Obtain industry best practices and provide them to the officers at the Bank.

12.6.3 Perform Audits Perform internal audits on the information and documents collected by the branches as a part of the KYC process. Track deficiencies and document corrective actions to be performed for the accounts at the Bank.

12.6.4 Perform Quality Assurance Tests Verify if Enhanced Due Diligence was performed in adherence to the policy and procedures outlined for all high risk accounts. For a certain subset of accounts, verify that the due diligence performed adhered to policies and procedures. Review the relevant supporting documentation to check for conformance with applicable regulations.

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13 Transaction Monitoring and Reporting

13.1 Introduction
The PMLA 2002 and the Rules specified there under (Rule 3), requires the Bank to monitor and furnish the following types of transaction reports: Cash Transaction Reports (CTRs) Suspicious Transaction Reports (STRs) Counterfeit Currency Reports (CCRs) Non Profit Organisation Transaction Reports (NTRs)

13.2 Reporting Formats

The above mentioned transaction reports can be filed in any of the following reporting formats currently available to the Bank: Manual Reports; Electronic Reports using fixed width file format; and Electronic Reports using XML file format.

The XML file format is the preferred file format by the Financial Intelligence UnitIndia (FIU-IND). The FIU-IND has also provided a data conversion utility from the fixed file format to the XML file format. Details of the XML file format and conversion utilities to it from the fixed file format to XML (Reporting Format Guide version 2.0) can be downloaded directly from the FIU-IND website: http://fiuindia.gov.in/furnishing-reportingformat.htm

13.3 Submission of Reports to FIU-IND

The Bank is expected to submit the report in an electronic form and should make reasonable efforts to send reports in the electronic format rather than the paper based format. The FIU-IND has designed the FINnet Gateway Portal as a comprehensive interface between the reporting entities (in this case the Bank) and FIU-IND for submission of the above mentioned four transaction reports. The Bank must register with FIU-IND to gain access to the portal which will allow the PO to upload the reports in the prescribed XML file format. In the event that Bank is not able to upload the report or has been requested by FIUIND to submit the report using a CD, the Bank must create a CD of the report in the XML file format. The CD created must contain a label mentioning the name of the Bank, unique identification code, type of report (CTR/STR/CCR/NTR), batch number, month and year of report for the purpose of identification. In case the size of data files exceeds the capacity of one CD, the data files should be compressed by using Winzip 8.1 or ZipItFast 3.0 (or higher version) compression utility to ensure quick and smooth 106

acceptance of the file. The CD should be virus free and must be accompanied by a summary of reports duly signed by the principal officer. If the Bank is not able to upload the report onto the FINnet Gateway Portal or create a CD with the required XML format then it may have to file the transaction report manually. In case of manual submission the Bank will use the FIU-IND provided PDF form based utilities to capture data and print the report as per the specified format. The report must be sent to FIU-IND at the following address: Director, FIU-IND Financial Intelligence Unit-India 6th Floor, Hotel Samrat Chanakyapuri, New Delhi 110021 India In urgent cases the form must also be faxed to +91 11 26874459.

13.4 CTRs
Rule 3, sub-rule (A) and (B) of the Prevention of Money Laundering Rules, 2005 require Banks to monitor and report cash transactions that meet the following criteria: All cash transactions of the value of more than Rupees ten lakhs (Rs.10,00,000) or its equivalent in foreign currency; and All series of cash transactions integrally connected to each other which have been valued more than rupees ten lakhs (Rs. 10,00,000) or its equivalent in foreign currency where such series of transactions have taken place within a calendar month.

Note on Integrally Connected Transactions: As clarified by the RBI guidelines, integrally connected cash transactions are transactions where the sum of debits or the sum of credits for an account is more than ten lakhs in a month. Further, only transactions above Rs.50, 000 should be reported by the Bank as part of the integrally connected cash transactions. 13.4.1 CTR Filing Procedures The manual format and general instructions for filing out a complete CTR, as provided by the FIU-IND, are provided in Annexure C to this chapter. 1. For branches not under the CBS, the monthly CTR will be compiled at the branch by the BM and forwarded to the PO of the Bank for approval and onward transmission to the FIU-IND. 2. For branches that are under CBS, the CTR reports will be compiled centrally at the data centre and forwarded to the PO of the Bank for approval and onward transmission to the FIU-IND. 3. A summary of the CTR for the Bank as a whole will be compiled by the PO every month in one of the prescribed formats as described in Section 13.2. 107

4.

The PO will sign and submit the CTR to FIU-IND in one of the submission formats described in Section 13.3. 5. A copy of the monthly CTR submitted to FIU-IND on behalf of the branch must be sent to and made available at each of the concerned branches for production to auditors or inspectors as required. 13.4.2 Time Frames for Filing a CTR Rule 8 of the Prevention of Money Laundering Rules, 2005 specifies the time limit for furnishing the transaction reports to the FIU-IND. A CTR report must be submitted by the PO of the Bank every month by the 15th of the succeeding month. 13.4.3 Exemptions CTR should contain only transactions carried out by the Bank on behalf of its clients or customers. Transactions between the internal accounts of the bank are to be excluded. While filing a CTR of a series of integrally connected transactions, details of individual transactions below Rs. Fifty Thousand (Rs. 50,000) need not be furnished.

13.5 STRs
13.5.1 Introduction Rule 2 of the Prevention of Money Laundering Rules, 2005, defines a suspicious transaction as follows: "Suspicious transaction" means a transaction referred to in clause (h), including an attempted transaction, whether or not made in cash which, to a person acting in good faith(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or (b) appears to be made in circumstances of unusual or unjustified complexity; or (c) appears to have no economic rationale or bonafide purpose; or (d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism; Explanation: Transaction involving financing of the activities relating to terrorism includes transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organization or those who finance or are attempting to finance terrorism. (h) "Transaction" includes 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.

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This section describes the policy and procedure of the Bank developed to identify, investigate and report unusual and potentially suspicious activity related to the customers of the Bank. 13.5.2 Potential Indicators of Suspicious Activity or Red Flags In order to raise awareness and assist the Bank staff in recognising the types and patterns of customer behaviour and/or transactions that might require further review to determine whether the activity is suspicious, some examples in the form of red flags are listed below. The lists are categorised and provided as illustrative guidelines and do not necessarily mean that the behaviour or transaction should always be considered suspicious. The indicators only suggest that a closer review of the behaviour or transaction may be warranted. Behavioural Indicators Customers with unusual or excessively nervous demeanor. Discussion of record-keeping or reporting duties of transactions with the intention of avoiding them. Threatening of an employee in order to deter record-keeping or reporting duties. Suggestion of gratuity to an employee of the Bank. Reluctance to proceed with a transaction on being informed of record keeping / information verification or currency transaction reporting requirements relevant to the Bank. Apparent hidden agenda or abnormal behaviour (i.e., forgo or bypass opportunities to avail higher interest rates on account balances) Uncharacteristic transfers or exchanges of large sums of money not associated with the account or customer type (e.g. minor or student account) Agent, attorney or financial advisor acting on behalf of the customer without proper documentation such as a power of attorney. Customers who appear to have accounts with several institutions within the same locality without any apparent logical reason. Customers who use separate tellers to conduct cash transaction or if applicable, foreign exchange transactions. A customer who often visits the safe deposit area immediately before making cash deposits, especially deposits just under defined threshold levels.

Identification Circumstances Customers who are reluctant in providing information normally requested at the time of account opening; provide minimal or seemingly fictitious information or providing information that is hard to verify at the time of account opening. Identification documents seem forged, unusual or tampered with. Opening of an account without identification, local references, introducer or a local address. 109

Residential and work address provided is outside the Banks immediate service area or perhaps closer to another branch of the same Bank. A customer/company who is reluctant to provide complete information regarding the purpose of the business, prior banking relationships, officers or directors, or its locations. A customer who has no record of past or present employment but makes frequent large transactions. A customer/company who is reluctant to reveal details about its activities or to provide financial statements. Welcome letter to a new customer that is returned due to an incorrect address. Home or business phone disconnected or always unanswered.

Cash Transactions Frequent withdrawal of large cash amounts that do not appear to be consistent with or justified by the customer's business activity. Entity or Company transactions, both deposits and withdrawals, that are denominated by unusually large amounts of cash, rather than by way of debits and credits normally associated with the normal commercial operations of the company, e.g. cheques, letters of credit, bills of exchange, etc. Depositing cash by means of numerous credit slips by a customer such that the amount of each deposit is not substantial, but the total of which is substantial. Exchanging an unusually large amount of small denomination notes for those of higher denomination. Deposits of cash containing many large denomination bills. Deposits that are large sums of cash wrapped in currency straps stamped by other banks. Several large cash transactions at different branches for the same customer, account or related accounts (e.g., same or similar account names, common beneficial owners, common signatories) on the same day. Frequent purchase of monetary instruments for cash, especially below reporting thresholds. Cash withdrawals from a previously dormant/inactive account, or from an account which has just received an unexpected large credit by a funds transfer;

Other Indicators High velocity in the movement of funds, where however, beginning and ending daily balances are low. A customer having a large number of accounts with the same bank, with frequent transfers between different accounts. Placing funds in term deposits and using them as security for more loans. Large deposits immediately followed by funds transfers. 110

Sudden surge in activity level. Customer regularly issues large value cheques without balance and then deposits cash. Customers who repay the problem loans unexpectedly. Retail deposit of many cheques but rare withdrawals for daily operations. Multiple deposits of money orders, Banker's cheques, drafts of third parties. Multiple deposits of Banker's cheques, demand drafts, cross/ bearer cheques of third parties into the account followed by immediate cash withdrawals. Substantial difference between the anticipated and actual transaction activity of the customer.

The decision to investigate and report suspicious behaviour or specific transactions determined as unusual must be based upon the particular facts and circumstances relating to the transactions or activity in question. Furthermore, an illustrative list of red flags is not a substitute for the judgment required to determine whether a particular transaction is suspicious or not. 13.5.3 Transaction Types for Monitoring Rule 3 of the Prevention of Money-laundering Rules, 2005 lists the transaction types for the reporting of all suspicious transactions as follows: Transactions whether or not made in cash and by way of (i) Deposits and credits, withdrawals into or from any accounts in whatsoever name they are referred to in any currency maintained by way of : (a) Cheques including third party cheques, pay orders, demand drafts, cashiers cheques or any other instrument of payment of money including electronic receipts or credits and electronic payments or debits, or (b) Travellers cheques, or (c) transfer from one account within the same banking company, financial institution and intermediary, as the case may be, including from or to Nostro and Vostro accounts, or (d) Any other mode in whatsoever name it is referred to; (ii) Credits or debits into or from any non-monetary accounts such as d-mat account, security account in any currency maintained by the banking company, financial institution and intermediary, as the case may be; Money transfer or remittances in favour of own clients or non-clients from India or abroad and to third party beneficiaries in India or abroad including transactions on its own account in any currency by any of the following:(a) (b) (c) (d) Payment orders, or Cashiers cheques, or Demand drafts, or Telegraphic or wire transfers or electronic remittances or transfers, or 111

(iii)

(e) (f) (g) (h)

Internet transfers, or Automated Clearing House remittances, or Lock box driven transfers or remittances, or Remittances for credit or loading to electronic cards, or (i) any other mode of money transfer by whatsoever name it is called;

(iv)

Loans and advances including credit or loan substitutes, investments and contingent liability by way of: (a) Subscription to debt instruments such as commercial paper, certificate of deposits, preferential shares, debentures, securitized participation, interbank participation or any other investments in securities or the like in whatever form and name it is referred to, or (b) Purchase and negotiation of bills, cheques and other instruments, or (c) Foreign exchange contracts, currency, interest rate and commodity and any other derivative instrument in whatsoever name it is called, or (d) Letters of credit, standby letters of credit, guarantees, comfort letters, solvency certificates and any other instrument for settlement and/or credit support;

(v)

Collection services in any currency by way of collection of bills, cheques, instruments or any other mode of collection in whatsoever name it is referred to.

13.5.4 Automated Transaction Monitoring Unusual or suspicious activity, especially related to behavioural indicators or identification circumstances as listed in the red flags section above, is best determined by BMs, CROs, SAs and other account opening officers who rely on their vast experience and personal knowledge of the customers. However, their capability to detect complex structuring of transactions to avoid threshold limits and unusual or suspicious activity over time is limited without the assistance of automated transaction monitoring systems. Section 2.21 (iv) (d) of the RBI Master Circular 2011 reiterates that banks as part of the monitoring process are required to put in place appropriate software applications for the effective identification and reporting of unusual or suspicious transactions. Automated transaction monitoring systems help identify a base-line level of activity that can be termed as reasonable or normal for a particular type of customer and generate alerts for transactions that fall outside the normal pattern of activity. 13.5.4.1 Transaction Monitoring Categories

All the patterns of activity can be broadly classified into the following three major categories: a. Cash Activities Including Structuring b. Wire or Funds Transfers 112

c. Unusual Activity 13.5.4.2 Selection of Transaction Monitoring Rules

The specific transaction monitoring rules for implementation at the Bank and their thresholds are selected and set by the AML Compliance Group and the PO of the Bank. The rules and thresholds are based on the Banks client base, products offered, observed level of transactional activity for a particular customer type and guidelines prescribed by the regulatory bodies or guidance issued by development agencies such as the IBA. Transaction Monitoring Rules The set of rules chosen for each category are listed below. Cash Activities Including Structuring 1. Accounts where cash activity represents a statistically significant portion of the total funds in/out of the account. In other words, the ratio of currency deposits/withdrawals as compared to the total account activity; 2. Multiple cash deposits such that the amount of each deposit is not substantial, but the total of the deposits is substantial within a specified timeframe; 3. Frequent withdrawals or deposits of large cash amounts, depending upon the customer type, in a 9 day rolling calendar period; 4. Multiple cash deposits/withdrawals in a 30 day rolling period where the aggregate of the deposits/ withdrawals is between Rs. 9,00,000 and Rs. 9,99,999; 5. Two or more purchases of monetary instruments between Rs. 40,000 and Rs. 49,999 by the same purchaser within 2 days of each other; 6. Multiple occurrences of purchase of monetary instruments over Rs. 1,00,000 on consecutive days over a 3 day period; Funds Transfers 1. Excessive transfers to multiple unique beneficiaries from a single customers account or related accounts, inconsistent with past behavior; 2. Excessive transfers from multiple unique originators to the Banks customers account or related accounts, inconsistent with past behavior;

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3. Concentration of funds (by domestic funds transfer) into a single account over a specific time period followed by a funds transfer out of the account for the same or similar amount. 4. Series of cash deposits followed by an outgoing funds transfer for the same amount (or within a +/- five percent bound) within a 9 calendar day period. 5. Series of cash withdrawals following an incoming funds transfer for the same amount (or within a +/- five percent bound) within a 9 calendar day period. Unusual Activity 1. Transactions occurring within nine (9) calendar days where the ratio of funds inflow to funds outflow is between an upper bound of 110 % and a lower bound of 90%; 2. Large value transaction in a dormant account; 3. Customers engaging in any transaction for any account type over Rs. X in a single transaction; 4. Multiple occurrences of a customer regularly issuing large value cheques without sufficient balance and then depositing cash; 5. Large number of accounts introduced by the same introducer; 6. Significant deviation from the known transaction pattern of the customer; and 7. Multiple Customers having same address/telephone number/id. 13.5.4.3 Update of Transaction Monitoring Rules

Based on the periodic review of the quality of alerts being generated, the AML Compliance Group or the PO may from time-to-time recommend changes to a particular rule or its threshold. All such instances, where a change is requested by the AML Compliance Group or the PO, must be documented and approved in writing by the Senior Management of the Bank including the Managing Director or the CEO. 13.5.4.4 Alert Generation and Processing

Customers and their accounts that trigger the above rules will cause an alert to be generated within the automated monitoring system. All the alerts generated within the system are scored with the alert score indicating the overall likelihood of the suspicious nature of the activity. The alert score takes into account the customer risk categorisation level thereby incorporating a risk based approach for transaction monitoring. 114

The BM must initially review the alerts generated for customers and accounts at his branch. On review, if the activity is deemed unusual or potentially suspicious, the BM must recommend the alert to the AML Compliance Group for further investigation. All alerts that are deemed as false positives may be cleared by the BM and closed out within the system. 13.5.5 Manual Alerts Suspicious Activity based on behavioural indicators and identification circumstances will require an employee to create a Manual Alert within the system that can then be automatically routed as required to the BM or AML Compliance Group. An employee must file a manual alert within 2 business days of the occurrence of the suspicious activity or event. Important Notice for Suspicious Transaction Monitoring The following important points must be noted with respect to the Banks obligation to file a STR: Only the Banks PO and his or her designee is allowed to file a STR with the FIU-IND. Every employee has a responsibility to refer potentially suspicious activity for investigation to his supervisor. Employees do not have to be certain that illegal activity has occurred; the existence of suspicion is sufficient. An employees obligation is to refer potentially suspicious activity to the Banks PO in a prescribed manner, who will investigate the matter. The PO is responsible for determining whether a SAR should be filed. Statutory deadlines, outlined in section 13.5.15, determine the timeline for filing a SAR, therefore prompt referral of potentially suspicious activity is critical.

13.5.6 STR Filing Obligations The PO of the Bank must file an STR if he or she has reasonable ground to believe that the attempted transaction(s), transaction(s) or a series of integrally connected transactions involve proceeds of an offense, generally irrespective of the amount of the transaction(s), as described in Section 12 of the PMLA 2002. The Schedule to the PMLA, 2002 lists all such offences and is provided as Appendix I to this chapter. 13.5.7 Communication with Authorities and Voluntary STRs In situations where the STR filing obligations are not met, the Bank may choose to voluntarily file an STR. This decision must be made by the PO in order for the Bank to provide assistance to the authorities in the enforcement of the PMLA. The PO may contact officers empowered and required to assist authorities in the enforcement of the PMLA about any emergent or otherwise deserving situation. Any 115

such contact should be documented by the PO in a separate file or electronically in the KYC/AML system. A complete list of officers empowered and required to assist authorities in the enforcement of the PMLA are provided in Appendix I - Other Authorities for Enforcement of the PMLA, to this chapter. However, such contact does not substitute for the obligation to file a STR, if that obligation otherwise is present. 13.5.8 Prohibition of Disclosure Rule 8 of the Prevention of Money Laundering Rules, 2005 prohibits a financial institution that files a STR from notifying any person involved in the suspicious transaction that the transaction has been reported. In light of the highly confidential nature of STRs, and to guard against unauthorized disclosure of this information, information concerning STR filings will only be shared with employees on a need to know basis. Under no circumstances may a customer be tipped off or informed of a STR, investigation related to an STR, STR content, or the Banks concerns about potential suspicious activity. Furthermore, employees should not put any apparent restrictions on operations in accounts (which would alert the customers) for which a STR has been filed. Any inquiries in this regard must be referred to the PO promptly. Every employee has a responsibility to refer potentially suspicious activity for investigation to his supervisor 13.5.9 Protection from Civil Liability for Reporting Information in a STR Illegal or suspicious activity reported on STRs is protected under Section 14 of the PMLA 2002 and neither the Bank nor its officers will be held liable for civil consequences of the filing of a STR. The Banks employees are always under a duty to act with the utmost of good faith regarding the reporting of potentially suspicious activity. Note: The PMLA contains no protection from criminal liability with respect to any reports filed with the FIU. However, protection from criminal liability is provided by a provision in the Indian Penal Code (Chapter IV s.76), which specifies that no criminal offence can occur with respect to an act done by a person who is either legally bound to do the act, or who believes in good faith that he/she is legally bound by law to do it. Under this provision, criminal liability does not exist for filing a STR in good faith. 13.5.10 Prohibition on Retaliation

No employee shall be subject to retaliation of any kind by the BM, PO, Bank staff and senior management for escalating, investigating or reporting potentially suspicious activity.

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13.5.11

Failure to Comply with the Banks Policy

Any failure to comply with this policy and the underlying principles within it could potentially expose the Bank to significant legal, regulatory, reputational, and financial risk. This could potentially result in regulatory censure and, in some cases, criminal liability for the Banks staff, with corresponding reputational damage and the need for remedial action. Failure to comply with this policy by staff would, therefore, be regarded as grounds for disciplinary action. 13.5.12 Escalation and Referral of Potentially Suspicious Activity

All employees have a duty to refer potentially suspicious activity. Employees must report potentially suspicious activity to his or her supervisor through written correspondence for documentation or by creating a manual alert in the monitoring system. The supervisor must immediately inform the AML Compliance Group within the Bank, responsible for follow-up and further review of the escalated activity. All automated alerts generated by the system are initially reviewed by the BM and reported to the AML Compliance Group if deemed suspicious. The responsibility of investigating and arriving at a conclusion of whether a STR needs to be filed lies with the AML Compliance Group and ultimately the PO. If available, the reporting employee must also be able to provide any additional information required by the AML Compliance group during the review of the escalated activity. If an employee believes that his or her supervisor may be involved in the potentially suspicious activity, the employee may contact the PO or the CGM-Banking directly without supervisor notification. Depending on the circumstances of a particular case, the filing of a STR may be warranted even where a prospective customer has not yet opened an account at the Bank. An employee who identifies potential suspicious conduct involving a prospective customer, who has not yet opened an account, should still report such information by generating a manual alert. The manual alert must provide as much detail as possible regarding the customer and his or her intended transactions. 13.5.13 STR Filing Procedures

The manual format and general instructions for filing out a complete STR, as provided by the FIU-IND, are provided in Annexure D to this chapter. 1. Once a decision to file a STR has been reached by the AML Compliance Group, a draft copy of the STR must be completed (along with all the supplemental documents) and submitted to the PO. The PO will approve the STR and submit it using one of the reporting formats mentioned in Section 13.2. 2. The AML Compliance Group must maintain a copy of the STR for a period of ten years since the date of filing an STR. Any physical documentation must 117

be locked in a separate storage area accessible to only the AML Compliance Group and the PO. All electronic evidence and documents must be backedup and made accessible on request. 3. The PO must create, update and maintain a STR log that includes the following: a. b. c. d. e. f. g. h. i. j. k. STR Number Activity Referral Date Review Start Date Review Complete Date STR Type STR Author Customer or Entity Name Customer ID or Account Number Total Unusual Activity Amount in Rupees Reason for Reporting Comments

Only the PO and the AML Compliance Group must have access to the STR log. 4. AML Compliance Group must provide monthly statistics on the STRs filed and alerts investigated must be presented to Senior Management for review. Discussions with management should include recommendations such as closure of accounts, limits of permissible activity, updates to risk scoring model, additional rules for alert detection, etc. 5. The individual or entity on whose name the STR is filed should be added to the internal watch-list of the Bank to ensure no accounts in the same name exist in different branches of the Bank. 13.5.14 On-going Duty to Report

If unusual activity in the account continues, employees must continue to report the activity to their supervisor or the AML Compliance Group. Previous referrals on the account do not necessarily discharge an employee from his or her duty to report ongoing or potentially new suspicious activity. Employees must continue to maintain confidentiality with respect to the account and customer under review. 13.5.15 Time Frames for Filing a STR

If any attempted transaction, transaction or a series of integrally connected transactions are identified as suspicious in nature, they must be submitted as a STR within 7 working days of arriving at that conclusion. The total time frame from the review of an alert(s), either manual or automated, to the submission of a STR must not exceed 60 days. The BM and subsequently the AML 118

Compliance Group must initiate the review promptly and complete it in a reasonable amount of time not exceeding the 60 day time limit specified above. In the event of serious violations of law or regulation that require immediate attention, in addition to promptly faxing the STR information to FIU-IND, the PO must notify by phone or in person the appropriate law enforcement agency and document the conversation. 13.5.16 STR Dispute Resolution

The decision to file or not to file a STR finally rests with the PO. If an employee or a member of the AML Compliance Group disagrees with the POs decision to not file a STR, he or she may contact the General Manager of the Banking Department. If the General Manager of the Banking Department agrees with the employees recommendation to file a STR, the General Manager will present the proposed STR filing to Senior Management for assessment and final disposition. The POs decision not to file a STR will be documented in a memorandum and stored along with the documents pertaining to the review. 13.5.17 Supplemental STRs

If a STR on an individual or entity was filed previously and the unusual activity continues, a supplemental STR needs to be prepared and filed. The STR reporting format takes into account if an STR is related to a previous filing and allows for the filing of a supplemental STR. The PO must specially bring to the notice of Senior Management the supplemental filing and a decision on how to respond to the recurrent indicators of suspicious activity must be taken. Senior Management may consider restricting the account or in certain cases closure of the account. 13.5.18 Closing Accounts Due to Continued Suspicious Activity

The AML Compliance Group and the PO shall maintain a STR log that lists all the accounts and customers that have been subjected to a STR filing. The AML Compliance group must review the log and try and identify patterns of activity, trends and any other indicators for categorisation into the types of unusual or suspicious activity detected. In the event that the activity persists and supplemental STRs are filed, the PO, in consultation with Senior Management may decide on terminating the relationship with the customer and closing related accounts. Banks must be careful in the manner in which the customer is dealt with while closing the account. As described in Section 13.5.7, the Bank must not disclose that a STR or multiple STRs have been filed on the customer. 13.5.19 STR Record Retention

Rule 6 of the PML Rules, 2005 stipulates that all records referred to in Rule 3, The Maintenance of Records of Transactions, that include transactions identified as potentially suspicious must be maintained for a period of ten years from the date of 119

the transactions between the client and the Bank. The record retention policy of the Bank is described in Section 14. 13.5.20 Regulatory and Law Enforcement Requests

Occasionally the Bank and its employees may be contacted by regulatory authorities or law enforcement agencies for additional documentation on a STR filed or to check for activity of certain customers at the Bank. All such requests must be immediately routed to the PO of the Bank. Prior to fulfilling any request, the PO must verify the authenticity of the request (i.e. that the requestor is a representative of an appropriate regulatory or law enforcement agency). The verification methods may include requiring written requests on letterhead that should be followed up with a phone call to the certified phone number of the appropriate agency confirming the request. Once a request is received and confirmed, the request along with its pertinent details must be logged and stored separately in either electronic or file format with the PO.

13.6 CCRs
Rule 3, sub-rule (C) of the Prevention of Money Laundering Rules, 2005 require Banks to monitor and report all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions. 13.6.1 CCR Filing Procedures 1. All employees have a duty to refer counterfeit currency. Employees must report counterfeit currency detected to the BM immediately. 2. The employee and/or BM must attempt to understand or extract information from the customer regarding the movement of the currency (how he or she came into possession of the currency) identified as counterfeit. 3. The BM must seize the counterfeit currency from the customer and forward them to the PO for further inspection. 4. The employee must create a counterfeit currency alert in the monitoring system. 5. The PO will sign and submit the CCR to FIU-IND in one of the submission formats described in Section 13.3 13.6.2 Time Frames for Filing a CCR Rule 8 of the Prevention of Money Laundering Rules, 2005 specifies the time limit for furnishing the transaction reports to the FIU-IND. A CCR report must be submitted by the PO of the bank no later than 7 working days from the date of occurrence of the transaction containing the counterfeit currency.

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13.7 NTRs
Rule 3, sub-rule (BA) of the Prevention of Money Laundering Rules, 2005 require Banks to monitor and report all transactions involving receipts by non-profit organisations of value more than rupees ten lakhs (Rs. 10,00,000), or its equivalent in foreign currency. Rule 2, sub-rule (1) clause (CA), defines Non-Profit Organisation (NPO) as 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 25 of the Companies Act, 1956. The Bank must pay special attention to any unregistered associations operating as a NPO and if applicable, must file a NTR for the same. 13.7.1 NTR Filing Procedures 1. The automated monitoring system will automatically create an alert within the system for any transaction involving receipts by non-profit organisations of value more than Rupees ten lakhs (Rs. 10,00,000), or its equivalent in foreign currency. 2. The BM must verify that the customer or the account that receives the money is indeed a non-profit organisation. 3. The PO will sign and submit the NTR to FIU-IND in one of the submission formats described in Section 13.3 13.7.2 Time Frames for Filing a NTR Rule 8 of the Prevention of Money Laundering Rules, 2005 specifies the time limit for furnishing the transaction reports to the FIU-IND. A NTR report must be submitted by the PO of the bank no later than 7 working days from the date of occurrence of the transaction.

13.8 Special Note on Wire Transfers

Wire transfer is an electronic transfer of funds from one person or institution (entity) to another. Because of the capability of transferring funds instantaneously wire transfers have become the preferred mode of transfer of funds, especially internationally. There are two types of wire transfers: Domestic wire transfers are any transfers where the originator and the beneficiary banks are located within the same country. A transaction involving a chain of wire transfers that take place within the borders of single country is a domestic wire transfer even if the system used for effecting the transactions is located outside the country. Cross-Border wire transfers mean any wire transfer where the originator and the beneficiary banks or financial institutions are located in different countries. It may include any chain of wire transfers that has at least one cross-border element.

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Because of lesser human intervention and reduced scrutiny, wire transfers also lend themselves as a preferred method for criminals and terrorists to transfer their funds. To address this, the Financial Action Task Force in its Special Recommendations has recommended some minimum requirements for wire transfers. 13.8.1 Requirements of Domestic Transfers The CRO must ensure that the following minimum requirements are met while taking an order for a domestic wire transfer: Information accompanying all domestic wire transfers of Rs. 50,000 and above must include complete originator information including name, address and account number etc. unless this information can be made available to the beneficiary bank by other means. If a bank has reason to believe that a customer is intentionally structuring wire transfers below Rs. 50,000 to several beneficiaries in order to avoid reporting or monitoring, the bank must insist on complete customer identification before accepting the transfer. In case of no cooperation from the customer, efforts should be made to establish his identity and an STR must be filed with FIUIND.

13.8.2 Requirements of Cross Transfers The CRO must ensure that the following minimum requirements are met while taking an order for a cross border wire transfer: All cross border wire transfers must include complete originator information that is accurate. Information accompanying all cross border wire transfers must include the name, address and account number and place where account exists. In the absence of an account number a unique reference number 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 exempted from including full originator information, provided they include the originators account number or unique reference number as mentioned above.

13.8.3 Exemption from Wire Transfer Requirements Inter-Bank transfers and settlements where both the originator and beneficiary are banks or financial institutions are exempted from the above requirements.

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Appendix I to Chapter 13: Other Authorities for Enforcement of the PMLA

Section 54 of the Prevention of Money Laundering Act, 2002 empowers and requires various authorities to assist in the enforcement of the act. The following officers are hereby empowered and required to assist the authorities in the enforcement of this Act, namely:(a) (b) Officers of the Customs and Central Excise Departments; Officers appointed under sub-section (1) of Section 5 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); Income-tax authorities under sub-section (1) of Section 117 of the Income-tax Act, 1961 (43 of 1961); Officers of the stock exchange recognized under Section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); Officers of the Reserve Bank of India constituted under sub-section (1) of Section 3 of the Reserve Bank of India Act, 1934 (2 of 1934); Officers of Police; Officers of enforcement appointed under sub-section (1) of Section 36 of the Foreign Exchange Management Act, 1973 (40 of 1999); Officers of the Securities and Exchange Board of India established under Section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Officers of any other body corporate constituted or established under a Central Act or a State Act; and Such other officers of the Central Government, State Government, local authorities or banking companies as the Central Government may, by notification, specify, in this behalf.

(c) (d)

(e)

(f) (g)

(h)

(i)

(j)

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14 Customer Record Retention and Sharing

14.1 Maintenance and Preservation of Records
The rules and regulations regarding maintenance and preservation of records are based on the type of record: 1. Transaction Record: Records of all transactions, domestic or international, shall be maintained for at least ten years after the date of completion of the transaction and should include all necessary information to allow for the exact reconstruction of the transaction (including receiver information, amount, currency, etc.). 2. Account Records: KYC information collected as a part of account opening and updates shall also be maintained for at least ten years after the date of account closing. This shall also include customer profiles or risk levels generated during the course of the relationship with the customer. 3. Transaction Reports: Any STRs, CTRs or other reports recorded by the bank must be retained by the bank for at least ten years after the date of filing. All the documents, office records and memorandum pertaining to the transactions, purpose thereof and findings and notes on the same at the branch or bank level must also be retained. 4. Training and Education: All records of training conducted in the areas of KYC, AML and CFT shall be retained for a period of ten years from the completion of the training session and shall also include a list of attendees and their designation and the date and location of the training programme. All the identification and transaction records must be maintained in a manner to be available to competent authorities, bank officials or audit teams on request.

14.2 Information Sharing, Legal Process and Other Matters

14.2.1 Principal Officer As per the definition of the RBI, the PO is responsible for sharing all the information with third parties such as enforcement agencies, banks and other institutions. The officer will act as the designated compliance officer for the Bank and will liaison with all regulatory authorities as described in Section 4.2.4. 14.2.2 Sharing Process The information sharing process between the Bank and other authorities shall be conducted in the following manner: The PO will be contacted by bank authorities, regulatory or law enforcement officials for a request for information sharing. The PO can share customer 124

information with agencies or officers of agencies listed in Appendix 1, Chapter 13 Once a request is received, all pertinent information is logged and the case file is also copied to the legal team at the bank. The PO is required to review the requests to determine its validity. In case where the Officer decides to deny the information sharing request, a copy of the decision and documents in support of it must be forwarded to Senior Management. A request for information sharing regarding an account or transaction could potentially lead to a Suspicious Activity Report being filed by the PO if the Officer independently corroborates the account to be containing information and transactions that could be deemed suspicious in nature. The regulatory authorities could periodically provide the Bank with a list of names of individuals/entities to be matched against their customers. If the particulars of a customer at the Bank match the details provided in the list, the Bank must notify the Joint Secretary, Ministry of Home affairs along with the UAPA Nodal Officer, the regulatory authorities and the FIU-IND. Internally details of matches should go into the KYC file of the customer as well as be forward to the Senior Management. Regulations require that once identified, these individuals or entities must be prevented from conducting financial transactions and all of their transactions, actual or attempted, must be covered in an STR19. In the case where the PO accepts the request for information sharing from a regulatory authority, the name of the account holder could be entered into the Banks internal watch list. In addition, the PO will process all the requests from the regulatory agencies to freeze, seize or attach funds and other financial assets held by, on behalf of or at the direction of individuals or entities that are suspected of money laundering and terrorist financing related activities.

Procedure for implementation of Section 51A of the Unlawful Activities (Prevention) Act, 1967 File no. 17015/10/2002-IS-VI
19

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15 Training and Education

15.1 Customer Education
Implementation of a KYC programme requires banks to ask for additional information that previously would have never been asked for. The customer could question the motive and the purpose of collecting this additional information. It is advised that the bank create specific literature, pamphlets, brochures, etc. to educate the customer regarding the need and the objectives of a KYC, AML and CFT programme. These brochures must contain information on: Purpose of the information collected being to meet guidelines from regulatory authorities such as the RBI. Information collected for KYC purposes must be differentiated from the information required for other purposes such as marketing with the KYC related information being clearly marked as mandatory.

15.2 Training
It is advised that all employees undergo a training programme tailored to their respective job profiles: 1. CROs: The CROs perform a majority of the customer interaction and so are required to be very familiar with the policies and procedures and be able to justify the reasons for the same. They will need to educate the customers and field questions or queries the customer might have. As they also serve as the de-facto account opening officers, they will also be required to undergo training for the systems put in place by the Bank for KYC, AML and CFT compliance. 2. Audit teams: The audit teams will be required to have an in-depth understanding of the policies and procedures put in place and the systems used for their implementation so that they can perform an effective audit of the compliance of the bank. 3. Principal Officers and Senior Management: These officials will primarily be concerned with the policies and procedures as they will be responsible for the creation and updates to the same. In addition, the PO will be required to understand the systems put in place to sign off on exceptions or evaluate any exceptions. 4. Other staff: The general staff at the bank will be required to understand the policies and procedures so as to correctly obtain customer information and documentation required and meeting compliance requirements. Records of employees attending training must be maintained and any employees failure to undergo new employee or annual training must be recorded.

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15.3 KYC for Existing and New Employees

As a part of the hiring process the Bank will require any new employee to undergo the KYC procedure for an individual i.e. submit identity and address proof. It will be the responsibility of the Human Resources department at the Bank to ensure that the documentation submitted by the staff member is updated with time as per KYC, AML and CFT norms. It is required that all new employees undergo KYC, AML and CFT training within the first three months of joining.

15.4 Training formats

The training for AML and KYC policies and procedures will be available to the employees in the following formats: 1. Circulars distributed: Circulars distributed by government agencies such as NABARD, RBI and FIU-IND should be sent across to all concerned bank officials with any changes in policy and procedure highlighted and notes on customizing the same to the Bank. 2. Classroom training: Classroom teaching will cover the laws and regulations related to KYC, AML and CFT as well as the banks policies and procedures on the same. Any conferences or seminars attended by the staff shall fall under this category. 3. Computer based training: Computer based training shall be primarily used as a tool to test the knowledge of the officers that have undergone training. 4. On-the-Job training: All staff members will receive on-the-job training in addition to the formal training sessions described above.

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Annexure A: Guidelines on Performing Background Checks using Google

The Google search engine shall be used by the officers of the Bank to perform background and adverse information checks on new and existing customers. In order to obtain the desired results the search process must be performed using the following steps: 1. Access the Google website The Google website can be accessed by typing on the web browser: http://www.google.com Once the page is loaded, the user is presented with the default Google homepage as shown below:

2. Perform the search To search for an individual or entity, type the customer name within quotation marks. Ensure that the quotation marks enclose the name of the customer. If the desired result of the query is to provide adverse information, add the following string as is after entering the name of the customer: Scam OR Investigation OR Fraud OR Criminal OR Terrorism OR Regulatory OR Fine OR Laundering OR Penalty OR Jail A search for adverse information for the entity XYZ Corp needs to be entered as shown below:

128

For each alias of the customer, a separate search must then be performed by replacing the old name with the alias. 3. Results of search As a result of the search, one of the two following screens will be displayed: 1) No search results The screenshot below displays the Google result for a search for XYZUW Corp which does not yield any results.

In the case of no results for the customer name or any of the aliases, the background search will be ended with the search and the results logged.

2) Search results found 129

In the case where results are found, further parsing and validation of the results will be required and should be performed by clicking on the Advanced Search link of the page as shown:

Click on Advanced Search for tools to assist in parsing lt

4. Parsing and validating the results The results obtained must then be parsed so that they are relevant to the criteria of the Bank criteria and refer to customer in question. It is recommended that the validation of customer identity be performed at least across the following four parameters: 1) Match granularity: The name of the individual or entity must exactly match the name being searched or one of the aliases. Failing this criterion no result should be considered a match. 2) Location: The information found should place the individual or entity in the same country as in the Bank records. 3) Content: The information published must pertain to an actual crime in the area of money laundering and terrorist financing committed by the customer. It is recommended that instead of looking for isolated incidents, the officer performing the screening look for a pattern of ongoing or recent illegal activities. 4) Age of information: It is recommended that the information be screened on the basis of the date of publishing and only three years from the current date be considered. Beyond these, the officer performing the search is free to use any other additional criteria as seen fit with the Banks policy. The Advanced Search link on the Google webpage contains additional parameters that can assist with the parsing as shown:

130

Search by Date Search by Location

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Annexure B: Letter to Individual Customers Regarding KYC Compliance

The following is the sample letter written to individual customers requesting for the update of KYC information on file: Branch Manager, Branch name or number State Cooperative Bank Address 1 Address 2 City, State Date: DD/MM/YYYY Subject: Compliance required to meet RBI Guidelines on Know Your Customer Norms Dear Sir or Madam, The Reserve Bank of India guidelines on Know Your Customer (KYC) Norms requires us to perform periodic updates on the identity and address proof of account holders. We regret to inform you that as per our records your account is not compliant with the current regulations in place. We request you to provide us the documents listed below along with the completed KYC compliance forms enclosed with this letter on or before DD/MM/YYYY at a bank working day during the regular office hours. We shall retain a copy of the documents for our records and return the originals immediately after. Please note that if the documentation is not received within 30 days of the date of letter, the regulations require us to restrict operations on your account leading up to the closure of the account for non-compliance. 1) Documents accepted as identity and address proof Documents Accepted as Proof of Documents accepted as Address Identity Proof (Any one) Passport PAN Identity Card Driving License (Any one) Passport Voter ID Driving License

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NREGA Job Card Aadhaar card Government Department Identity card Voter Identity Card NREGA Job Card Govt. Department Identity Aadhaar card Social Security Card Letter from MP/MLA/MC/GZ Officer including a notarized photograph

Ration card Depository Account Statements Letter from MP/MLA/MC/GZ Officer attesting to address Bank Account Statement (six months from date of submission) Bank Passbook Employer certificate (six months from account opening) Property Tax Assessment Order Income Tax Return Any other id containing address issued by Govt. Residential Permit issued by state police Water Bill (six months from date of submission) Gas Bill (six months from date of submission)

Any documents that are currently expired will not be acceptable for KYC purposes. If you have submitted your documents after DD/MM/YYYY, you are not required to submit them again. We trust you will treat the matter of KYC Compliance as most urgent and thank you for your continued support of our banking establishment. Yours faithfully,

Name Designation

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Annexure C: Schedule of Offences

As per 2(1)(y) of the Prevention of Money Laundering Act, 2002, Scheduled offence means The offences specified under Part A of the Schedule, or The offences specified under Part B of the Schedule if the total value involved in such offences is thirty lakh Rupees or more, or The offences specified under Part C of the Schedule. The Schedule to the Prevention of Money Laundering Act, 2002 lists all such offences. Offences to Part A of the Schedule Paragraph 1 - The Indian Penal Code, 1860 Section 121 121A 489A 489B Description of Offence Waging, or attempting to wage war or abetting waging of war, against the Government of India. Conspiracy to commit offences punishable by section 121 against the State. Counterfeiting currency notes or bank notes. Using as genuine, forged or counterfeit currency notes or bank notes

Paragraph 2 - The Narcotic Drugs and Psychotropic Substances Act, 1985 Section 15 16 17 18 19 20 21 22 23 24 25A 27A 29 Description of Offence Contravention in relation to poppy straw. Contravention in relation to coca plant and coca leaves. Contravention in relation to prepared opium. Contravention in relation to opium poppy and opium. Embezzlement of opium by cultivator. Contravention in relation to cannabis plant and cannabis. Contravention in relation to manufactured drugs and preparations Contravention in relation to psychotropic substances. Illegal import into India, export from India or transhipment of narcotic drugs and psychotropic substances External dealings in narcotic drugs and psychotropic substances in contravention of section 12 of the Narcotics Drugs and Psychotropic Substances Act, 1985. Contravention of orders made under section 9A of the Narcotic Drugs and Psychotropic Substances Act, 1985 Financing illicit traffic and harbouring offenders. Abetment and criminal conspiracy.

134

Paragraph 3 - The Explosive Substances Act, 1908 Section Description of Offence 3 Causing explosion likely to endanger life or property. 4 Attempt to cause explosion, or for making or keeping explosives with intent to endanger life or property. 5 Making or possessing explosives under suspicious circumstances.

Paragraph 4 - The Unlawful Activities (Prevention) Act, 1967 Section 10 read with section 3 11 read with sections 3, 7 13 read with section 3 16 read with section 15 16A 17 18 18A 18B 19 20 21 38 39 Description of Offence Penalty for being member of an unlawful association, etc. Penalty for dealing with funds of an unlawful association. Punishment for unlawful activities. Punishment for terrorist act. Punishment for making demands of radioactive substances, nuclear devices, etc. Punishment for raising fund for terrorist act. Punishment for conspiracy, etc. Punishment for organising of terrorist camps. Punishment for recruiting of any person or persons for terrorist act. Punishment for harbouring, etc. Punishment for being member of terrorist gang or organization. Punishment for holding proceeds of terrorism. Offence relating to membership of a terrorist organization. Offence relating to support given to a terrorist organization.

Offences to Part B of the Schedule Paragraph 1 - The Indian Penal Code, 1860 Section 120 B 255 257 258 259 260 302 304 307 308 Description of Offence Criminal conspiracy. Counterfeiting Government stamp. Making or selling instrument for counterfeiting Government stamp. Sale of counterfeiting Government stamp. Having possession of counterfeit Government stamp. Using as genuine a Government stamp known to be counterfeit. Murder. Punishment for culpable homicide not amounting to murder. Attempt to murder. Attempt to commit culpable homicide. 135

Section 327 329 364A 384 to 389 392 to 402 411 412 413 414 417 418 419 420 421 422 423 424 467 471 472 and 473 475 and 476 481 482 483 484 485 486 487 488

Description of Offence Voluntarily causing hurt to extort property, or to constrain to an illegal act. Voluntarily causing grievous hurt to extort property, or to constrain to an illegal act. Kidnapping for ransom, etc. Offences relating to extortion Offences relating to robbery and dacoity. Dishonestly receiving stolen property. Dishonestly receiving property stolen in the commission of a dacoity. Habitually dealing in stolen property. Assisting in concealment of stolen property. Punishment for cheating. Cheating with knowledge that wrongful loss may ensure to person whose interest offender is bound to protect. Punishment for cheating by personation. Cheating and dishonesty inducing delivery of properties. Dishonest or fraudulent removal or concealment of property to prevent distribution among creditors. Dishonestly or fraudulently preventing debt being available for creditors. Dishonest or fraudulent execution of deed of transfer containing false statement of consideration. Dishonest or fraudulent removal or concealment of property. Forgery of a valuable security, will, etc. Using as genuine a forged document or electronic record. Making or possessing counterfeit seal, etc. with intent to commit forgery. Counterfeiting device or mark. Using a false property mark. Punishment for using false property mark. Counterfeiting a property mark used by another. Counterfeiting a mark used by a public servant. Making or possession of any instrument for counterfeiting a property mark. Selling goods marked with a counterfeit property mark. Making a false mark upon any receptacle containing goods. Punishment for making use of false mark.;

Paragraph 2 - The Arms Act, 1959 Section Description of Offence 25 To manufacture, sell, transfer, convert, repair or test or prove or expose or offer for sale or transfer or have in his possession for sale, transfer, conversion, repair, test or proof, any arms or ammunition in contravention of section 5 etc. 26 To do any act in contravention of any provisions of section 3, 4, 10 or 12 of the Arms Act, 1959 in such manner as specified in sub-section (1) of section 26 of the said Act etc. 27 Use of arms or ammunitions in contravention of section 5 or use of any arms or ammunition in contravention of section 7 of the Arms Act, 1959. 136

Section Description of Offence 28 Use and possession of fire arms or imitation fire arms in certain cases. 29 Knowingly purchasing arms from unlicensed person or for delivering arms, etc., to person not entitled to possess the same. 30 Contravention of any condition of a licence or any provisions of the Arms Act, 1959 or any rule made there under.

Paragraph 3 - The Wild Life (Protection) Act, 1972 Section 51 read with section 9 51 read with section 17A 51 read with section 39 51 read with section 44 51 read with section 48 51 read with section 49B Description of Offence Hunting of wild animals Contravention of provisions of section 17A relating to prohibition of picking, uprooting, etc., of specified plants. Contravention of provisions of section 39 relating to wild animals, etc., to be Government property. Contravention of provisions of section 44 relating to dealings in trophy and animal articles without licence prohibited. Contravention of provisions of section 48 relating to purchase of animal, etc., by licensee. Contravention of provisions of section 49B relating to prohibition of dealings in trophies, animal articles etc., derived from scheduled animals.

Paragraph 4 - The Immoral Traffic (Prevention) Act, 1956 Section 5 6 8 9 Description of Offence Procuring, inducing or taking person for the sake of prostitution. Detaining a person in premises where prostitution is carried on. Seducing or soliciting for purpose of prostitution. Seduction of a person in custody.

Paragraph 5 - The Prevention Of Corruption Act, 1988 Section Description of Offence 7 Public servant taking gratification other than legal remuneration in respect of an official act. 8 Taking gratification, in order, by corrupt or illegal means, to influence public servant. 9 Taking gratification, for exercise of personal influence with public servant. 137

10 13

Abetment by public servant of offences defined in section 8 or section 9 of the Prevention of Corruption Act, 1988. Criminal misconduct by a public servant.

Paragraph 6 - The Explosives Act, 1884 Section 9-B 9-C 25 read with section 3 28 25 read with section 3 Description of Offence Punishment for certain offences. Offences by Companies. Contravention of export trade in antiquities and art treasure. Offences by Companies. Contravention of export trade in antiquities and art treasure.

Paragraph 7 - The Antiquities and Arts Treasures Act, 1972 Section 25 read with section 3 28 Description of Offence Contravention of export trade in antiquities and art treasure. Offences by Companies.

Paragraph 8 - The Securities and Exchange Board Of India Act, 1992 Section 12A read with section 24 Description of Offence Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control.

Paragraph 9 - The Customs Act, 1962 Section 135 Description of Offence Evasion of duty or prohibitions.

Paragraph 10 - The Bonded Labour System (Abolition) Act, 1976 Section Description of Offence 138

16 18 20

Punishment for enforcement of bonded labour. Punishment for extracting bonded labour under the bonded labour system. Abetment to be an offence.

Paragraph 11 - The Child Labour (Prohibition and Regulation) Act, 1986 Section Description of Offence 14 Punishment for employment of any child to work in contravention of the provisions of section 3.

Paragraph 12 - The Transplantation Of Human Organs Act, 1994 Section Description of Offence 18 Punishment for removal of human organ without authority. 19 Punishment for commercial dealings in human organs. 20 Punishment for contravention of any other provision of this Act.

Paragraph 13 - The Juvenile Justice (Care and Protection Of Children) Act,2000 Section Description of Offence 23 Punishment of cruelty to juvenile or child. 24 Employment of juvenile or child for begging. 25 Penalty for giving intoxicating liquor or narcotic drug or psychotropic substance to juvenile or child. 26 Exploitation of juvenile or child employee.

Paragraph 14 - The Emigration Act,1983 Section 24 Offences and penalties. Description of Offence

Paragraph 15 - The Passport Act,1967 Section 12 Offences and penalties. Description of Offence

Paragraph 16 - The Foreigners Act,1946 139

Section Description of Offence 14 Penalty for contravention of provisions of the Act, etc. 14B Penalty for using forged passport. 14C Penalty for abetment.

Paragraph 17 - The Copyright Act,1957 Section 63 63A 63B 68A Description of Offence Offence of infringement of copyright or other rights conferred by this Act. Enhanced penalty on second and subsequent convictions. Knowing use of infringing copy of computer programme. Penalty for contravention of section 52A.

Paragraph 18 - The Trade Marks Act,1999 Section Description of Offence 103 Penalty for applying false trademarks, trade description, etc. Penalty for selling goods or providing services to which false trademark or false trade 104 description is applied. 105 Enhanced penalty on second or subsequent conviction. 107 Penalty for falsely representing a trade mark as registered. 120 Punishment of abetment in India of acts done out of India.

Paragraph 19 - The Information Technology Act, 2000 Section Description of Offence 72 Penalty for breach of confidentiality and privacy. 75 Act to apply for offence or contravention committed outside India.

Paragraph 20 - The Biological Diversity Act,2002 Section 55 read with 6 Description of Offence Penalties for contravention of section 6, etc.

Paragraph 21 - The Protection Of Plant Varieties and Farmers Rights Act,2001 140

70 68 71 68 72 68 73 68

Section read with read with read with read with

Description of Offence Penalty for applying false denomination, etc. Penalty for selling varieties to which false denomination is applied. Penalty for falsely representing a variety as registered. Penalty for subsequent offence.

Paragraph 22 - The Environment Protection Act,1986 Section 15 read with 7 15 read with 8 Description of Offence Penalty for discharging environmental pollutants. Penalty for handling hazardous substance.

Paragraph 23 - The Water (Prevention and Control Of Pollution) Act,1974 Section Description of Offence 41(2) Penalty for pollution of stream or well. 43 Penalty for contravention of provisions of section 24.

Paragraph 24 - The Air (Prevention And Control Of Pollution) Act,1981 Section Description of Offence 37 Failure to comply with the provisions for operating industrial plant.

Paragraph 25 - The Suppression of Unlawful Acts Against Safety Of Maritime Navigation and Fixed Platforms on Continental Shelf Act, 2002 Section Description of Offence 3 Offences against ship, fixed platform, cargo of a ship, maritime navigational facilities, etc.

Offences to Part C of the Schedule An offence which is the offence of cross border implications and which is specified in,(1)

Part-A; or

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(2)

Part-B without any threshold; or the offences against property under chapter XVII of the Indian Penal Code.

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Annexure D: Manual Format for Filing Cash Transaction Report

The CTR in manual form consists of the following four (4) forms: 1. 2. 3. 4. Summary of Cash Transaction Reports (Contains summary of enclosed CTRs) CTR Form (Details of bank account and cash transactions) Annexure C.1 Individual Detail Sheet (Identification details of individual) Annexure C.2 Legal Person/Entity Detail Sheet (Identification details of legal person /entity)

Summary of Cash Transaction Reports PART 1: DETAILS OF THE SUMMARY 1.1 Month and year of summary 1.2 Is this a supplementary to an earlier summary? NO YES (Tick as applicable) 1.3 Date of sending original summary if this is a supplemental report. Separate summary should be furnished for each month. Supplementary summary is required to be submitted where a summary for the month has already been submitted. In case of supplementary summary, only additional CTRs need to be enclosed. PART 2: DETAILS OF PRINCIPAL OFFICER 2.1 Name of Bank 2.2 BSR code 2.3 ID allotted by FIU-IND ID allotted by FIU-IND may be left blank till the same is communicated by FIU-IND. 2.4 Category of bank D for Co-operative Bank 2.5 Name of principal officer Principal Officer is the officer designated by the Bank under PMLA, 2002 2.6 Designation 2.7 Address (No., Building) 2.8 Street/Road 2.9 Locality 2.10 City/Town, District 2.11 State, Country 2.12 Pin code 2.13 Tel (with STD code) 2.14 Fax 2.15 E-mail

PART 3: STATISTICS FOR THE MONTH

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3.1 3.2 3.3 3.4

3.5

3.6

Number of total branches Number of branches which have sent reports (including NIL report) Number of branches which have submitted CTRs (excluding NIL report) Number of original CTRs (bank accounts) enclosed with this summary Number of original CTRs (bank accounts) should match with the original CTRs enclosed with this summary Number of replacement CTRs (bank accounts) enclosed with this summary Number of replacement CTRs (bank accounts) should match with the replacement CTRs enclosed with this summary. All replacement CTRs received from branches should be enclosed at the end of the reports for the month. Total original CTRs (bank accounts) reported for the month (cumulative) This figure should be the cumulative total of 3.4. above for the all the summaries of the month

CTR Form PART 1: DETAILS OF REPORT 1.4 Date of sending report Date of sending report is the date on which the principal officer sends the report to Director (FIU-IND). 1.2 Is this a replacement to an earlier report? NO YES (Tick as applicable) 1.3 Date of sending original report if this is a replacement report. Replacement report is a report submitted in replacement of an earlier CTR. When a replacement report is submitted, date of submitting original CTR may be mentioned and the complete CTR has to be submitted again. PART 2: DETAILS OF REPORTING BRANCH 2.1 Name of Bank 2.2 BSR code 2.3 ID allotted by FIU-IND ID allotted by FIU-IND may be left blank till the same is communicated by FIU-IND. 2.4 Address (No., Building) 2.5 Street/Road 2.6 Locality 2.7 City/Town, District 2.8 State, Country 2.9 Pin code 2.10 Tel (with STD code) 2.11 Fax 2.12 E-mail

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PART 3: DETAILS OF BANK ACCOUNT A separate CTR is required to be filed for each reported bank account 3.1 Account Number 3.2 Type of Account A. Savings Account B. Current Account C. Cash Credit Account 3.3 Type of Account Holder A. Individual B. Legal Person/Entity C. Central/ State Government D. Central/ State Government owned undertaking E. Other 3.4 Date of Account Opening DD-MM-YYYY PART 4: LIST OF ACCOUNT HOLDERS List of Account Holders Name of Individual/Legal Person/Entity Customer ID/number Mention A for Individual and B for Legal Person/Entity PART 5: LIST OF OTHER RELATED PERSONS List of Related Persons (other than mentioned above) Name of Individual/Legal Person/Entity Customer ID/number Annexure Mention B for Authorised Signatory, D for Introducer. E for Guarantor, Z for others Mention A for Individuals, B for Legal Person/Entity PART 6: DETAILS OF TRANSACTIONS Transaction Details Date of Transaction Debit (D for Debit and C for Credit) Amount in Rupees Remarks PART 7: CUMULATIVE TOTALS Cumulative Totals Total debits in the bank account in the financial year Total credits in the bank account in the financial year (Total of entries in the bank account from 1st April of the financial year till the date of reporting)

Annexure

Relation

145

Annexure C.1 Individual Detail Sheet Use separate for each individual. Kindly fill in CAPITAL. 1 2 3 Name of bank (with branch) BSR code Annexure enclosed with (Tick as applicable) A. Cash Transaction Report B. Counterfeit Currency Report C. Suspicious Transaction Report Full name of individual Customer ID/number (If allotted ) Name of father/spouse Occupation Date of birth Sex (M/F) Nationality Identification document Passport Election ID card PAN card ID card Driving license Account introducer Other (Specify) Identification number (Number mentioned in the identification document) Issuing authority (Authority which had issued the document) Place of Issue (Place where the document was issued) PAN Communication address: No., Building Street/Road Locality City/Town, District State, Country Pin code Tel (with STD code) Mobile number E-mail Name of Organisation/Employer Second Address (Permanent address/Place of work): No., Building Street/Road Locality City/Town, District State, Country Pin code Tel (with STD code)

4 5 6 7 8 9 10 11

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Annexure C.2 Legal Person/Entity Detail Sheet 146

Use separate annexure for each individual. Kindly fill in CAPITAL. 1 2 3 Name of bank (with branch) BSR code Annexure enclosed with (Tick as applicable) A. Cash Transaction Report B. Counterfeit Currency Report C. Suspicious Transaction Report Name of legal person/entity Customer ID/number (If allotted ) Nature of business Date of incorporation Type of Constitution Sole Proprietorship Partnership Firm HUF Private Limited Company Public Limited Company Society Association Trust Liquidator LLP Others (Specify) Not Categorised Registration number (Number mentioned in the deed/document) Registering Authority (Authority which had registered the deed/document) Place of Registration (Place where the deed/document was registered) PAN Communication address : No., Building Street/Road Locality City/Town, District State, Country Pin code Tel (with STD code) Fax (with STD code) E-mail List of directors /partners / members and other related persons Name of Individual/Legal Person/Entity Customer ID/number Relation Annexure

4 5 6 7 8

9 10 11 12 13 14 15 16 17 18 19 20 21 22

Annexure E: Manual Format for Filing Suspicious Transaction Report

The STR in manual form consists of the following four (4) forms: 147

1. STR Form (Details of suspicious transactions) 2. Annexure D.1 Individual Detail Sheet (Identification details of individual) 3. Annexure D.2 Legal Person/Entity Detail Sheet (Identification details of legal person /entity) 4. Annexure D.3 Account Detail Sheet (Details of bank account and transactions) STR Form PART 1: DETAILS OF REPORT 3.5 Date of sending report Date of sending report is the date on which the principal officer sends the report to Director (FIU-IND). 1.2 Is this a replacement to an earlier report? NO YES (Tick as applicable) 1.3 Date of sending original report if this is a replacement report. Replacement report is a report submitted in replacement of an earlier STR. When a replacement report is submitted, date of submitting original STR may be mentioned and the complete STR has to be submitted again. PART 2: DETAILS OF PRINCIPAL OFFICER 2.1 Name of Bank 2.2 BSR code 2.3 ID allotted by FIU-IND ID allotted by FIU-IND may be left blank till the same is communicated by FIU-IND. 2.4 Category of bank D for Co-operative Bank 2.5 Name of principal officer Principal Officer is the officer designated by the Bank under PMLA, 2002 2.6 Designation 2.7 Address (No., Building) 2.8 Street/Road 2.9 Locality 2.10 City/Town, District 2.11 State, Country 2.12 Pin code 2.13 Tel (with STD code) 2.14 Fax 2.15 E-mail PART 3: DETAILS OF REPORTING BRANCH / LOCATION Particulars of the branch/location in which the reported accounts are maintained should be submitted in this part. 3.1 Name of Branch/Location 148

3.2 BSR code 3.3 ID allotted by FIU-IND 3.4 Address (No., Building) 3.5 Street/Road 3.6 Locality 3.7 City/Town, District 3.8 State, Country 3.9 Pin code 3.10 Tel (with STD code) 3.11 Fax 3.12 E-mail PART 4: LIST OF INDIVIDUALS LINKED TO TRANSACTIONS Customer ID/number may be given if allotted by bank. Enclose a separate Annexure D.1 for each individual. Name of Individual D.1 # Customer ID/number (if allotted) Annexure

PART 5: LIST OF LEGAL PERSONS/ENTITIES LINKED TO TRANSACTIONS Customer ID/number may be given if allotted by bank. Enclose a separate Annexure D.2 for each legal person/entity. Include the details about individuals (Director/Partner/Member etc.) related to the legal person/entity Name of legal person/entity D.2 # Customer ID/number (if allotted) Annexure

PART 6: LIST OF ACCOUNTS LINKED TO TRANSACTIONS Enclose a separate Annexure D.3 for each account Account Number Name of First Account Holder Annexure D.3 #

PART 7: DETAILS OF SUSPICIOUS TRANSACTION 7.1 Reasons for suspicion (Tick as many as applicable. Multiple selections are possible). A Identity of client accounts D Activity in account transaction Z Other reason (specify) B E Background of client Nature of transaction C F Multiple Value of

7.2 Grounds of Suspicion (Mention summary of suspicion and sequence of events)

149

Annexure D.1 Individual Detail Sheet Use separate annexure for each individual. Kindly fill in CAPITAL. 1 2 3 Name of bank (with branch) BSR code Annexure enclosed with (Tick a as applicable) D. Cash Transaction Report E. Counterfeit Currency Report F. Suspicious Transaction Report Full name of individual Customer ID/number (If allotted ) Name of father/spouse Occupation Date of birth Sex (M/F) Nationality Identification document Passport Election ID card PAN card ID card Driving license Account introducer Other (Specify) Identification number (Number mentioned in the identification document) Issuing authority (Authority which had issued the document) Place of Issue (Place where the document was issued) PAN Communication address : No., Building Street/Road Locality City/Town, District State, Country Pin code Tel (with STD code) Mobile number E-mail Name of Organisation/Employer Second Address (Permanent address/Place of work): No., Building Street/Road Locality City/Town, District State, Country Pin code Tel (with STD code)

4 5 6 7 8 9 10 11

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Annexure D.2 Legal Person/Entity Detail Sheet 150

Use separate annexure for each individual. Kindly fill in CAPITAL. 23 Name of bank (with branch) 24 BSR code 25 Annexure enclosed with (Tick a as applicable) D. Cash Transaction Report E. Counterfeit Currency Report F. Suspicious Transaction Report 26 Name of legal person/entity 27 Customer ID/number (If allotted ) 28 Nature of business 29 Date of incorporation 30 Type of Constitution Sole Proprietorship Partnership Firm HUF Private Limited Company Public Limited Company Society Association Trust Liquidator LLP Others (Specify) Not Categorised 31 Registration number (Number mentioned in the deed/document) 32 Registering Authority (Authority which had registered the deed/document) 33 Place of Registration (Place where the deed/document was registered) 34 PAN 35 Communication address : No., Building 36 Street/Road 37 Locality 38 City/Town, District 39 State, Country 40 Pin code 41 Tel (with STD code) 42 Fax (with STD code) 43 E-mail 44 List of directors /partners / members and other related persons Name of Individual/Legal Person/Entity Customer ID/number Relation Annexure Annexure D.3 Account Detail Sheet Use separate annexure for each individual. Kindly fill in CAPITAL. 1 2 Name of bank (with branch) BSR code 151

Annexure enclosed with (Tick a as applicable) A. Cash Transaction Report B. Counterfeit Currency Report C. Suspicious Transaction Report 4 Account Number 5 Type of Account D. Savings Account E. Current Account F. Cash Credit Account 6 Type of Account Holder F. Individual G. Legal Person/Entity H. Central/ State Government I. Central/ State Government owned undertaking J. Other 7 Date of Account Opening DD-MM-YYYY 8 List of Account Holders Name of Individual/Legal Person/Entity Customer ID/number Annexure Mention A for Individual and B for Legal Person/Entity 9 List of Related Persons (other than mentioned above) Name of Individual/Legal Person/Entity Customer ID/number Relation Annexure Mention B for Authorised Signatory, D for Introducer. E for Guarantor, Z for others 10 Transaction Details Date of Transaction Mode (A- Cheque, B- Transfer within Branch, C- Cash, D- Demand Draft, EElectronic Funds Transfer, F- Travellers Cheque, Z-Other (Specify)) Debit (D for Debit and C for Credit) Amount in Rupees Remarks 11 Cumulative Totals Total debits in the bank account in the financial year Total credits in the bank account in the financial year (Total of entries in the bank account from 1st April of the financial year till the date of reporting) 12 Write up about transactions (transactions mentioned in 10 above)

Annexure F: Manual Format for Filing of Counterfeit Currency Transaction Report

The CCR in manual form consists of the following two (2) forms: 1. Summary of Counterfeit Currency Reports (Contains summary of enclosed CCRs) 2. CCR Form (Details of branch and counterfeit currency) Summary of Counterfeit Currency Reports 152

PART 1: DETAILS OF THE PRINCIPAL OFFICER 1.1 1.2 1.3 Name of Bank Branch Reference Number ID allotted by FIU-IND ID allotted by FIU-IND may be left blank till the same is communicated by FIU-IND. 1.4 Category of bank D for Co-operative Bank 1.5 Name of principal officer Principal Officer is the officer designated by the Bank under PMLA, 2002 1.6 Designation 1.7 Address (No., Building) 1.8 Street/Road 1.9 Locality 1.10 City/Town, District 1.11 State, Country 1.12 Pin code 1.13 Tel (with STD code) 1.14 Fax 1.15 E-mail PART 2: STATISTICS 2.1 Number of Counterfeit Currency Reports enclosed 2.2 Total Value of Counterfeit Currency Total Value of counterfeit currency detected in the enclosed reports. (Sum of value is in 2.8 of each CCR). CCR Form Kindly fill in CAPITAL. Read the instructions before filling the form. PART 1: DETAILS OF REPORTING BRANCH/LOCATION 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 Name of Entity Name of Branch/Location Branch Reference Number ID allotted by FIU-IND Address (No., Building) Street/Road Locality City/Town, District State, Country Pin code Tel (with STD code) Fax 153

1.13

E-mail

PART 2: DETAILS OF COUNTERFEIT CURRENCY This section contains the details of counterfeit currency. Total value of counterfeit currency should match with the total calculated value of Denomination X Number of pieces. # 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 Denomination Number of Pieces 1,000 500 100 50 20 10 5 Total value of Counterfeit Currency Value

PART 3: DETAILS OF DETECTION 1.14 1.15 1.16 1.17 Date of Cash Tendering Total Cash Deposited Date of Detection Detected at A Cash Counter B Branch Level C Currency Chest D RBI's CVPS Z Other Whether local police station has been informed Details of FIR (if available) Additional Information, if any

1.18 1.19 1.20

Yes

No

PART 4: DETAILS OF RELATED PERSONS 4.1 Name of Tendering Person 4.2 Name of Account Holder 4.3 Account / Card No.

154

Checklist for Customer Due Diligence

1 Customer Classification
In order to determine the appropriate information and documentation that must be collected, all the customers at the bank are classified into distinct constitution types and categories within them.

1.1 Constitution
The information required from the customer is based on the customer type of the account holder and is referred to as the constitution. The following constitution types are applicable to the Bank: Individuals: All accounts opened by individuals or groups acting in an individual capacity (e.g. Joint Accounts, Hindu Undivided Family) are present in this category. Business Entities: Accounts of specific corporate entities, separate and distinct from the individuals who finance it. Financial Institutions: Institutions that provide financial services to its members or clients including private, public and co-operative sector banks as well as non-banking institutions such as money-services businesses and chit funds. Government, Government Agency or Entity: Any permanent or non-permanent organization in the machinery of the government including departments, ministries and other types of public bodies. Trust: Trusts are classified into two types - Public trusts that are generally formed for charitable and religious purposes and are not intended for commercial activities while private trusts generate income for specified beneficiaries. Non Profit Organizations: Non-profit organizations or charities can be registered as trusts, societies or a private limited non-profit company under Section 25 of the Companies Act. These exist independently of the government, are self-governed, produce benefits for individuals or groups outside the membership of the organization and are prohibited from disbursing monetary residual to members. Religious organizations are set up primarily for religious purposes and must be registered with the Income Tax Department. Societies and Associations: A society or an association is an institution owned by its members in that the funds are raised from membership and are then used to provide common services to all the members of the organization. 2

Based on these definitions, a particular customer could fit into one or more constitutions listed above but will hold the same customer risk categorisation value from a KYC and AML compliance standpoint.

1.2 Categories
All the categories for the constitutions can be broadly grouped under individual and entity constitution types as listed below: 1.2.1 Individuals The constitution type individual consists of the following sub-categories: Non-Resident Indian: A Non-Resident Indian (NRI) is an Indian citizen who resides out of India for employment, business or other reasons for an uncertain duration of stay. NRI accounts may provide for special tax and repatriation benefits due to the status of the account holder. Foreign National: A foreign national is an individual not of Indian nationality but currently residing in the country for various purposes. Persons of Indian Origin: A person of Indian origin is an individual who is not a citizen of India but has Indian ancestry and has obtained a valid PIO card. Minor: A minor account is an account created and operated in the name of a minor (under the age of 18) and represented by a guardian or custodian. Upon the minor attaining majority, the right of the guardian to operate the account shall cease. Staff: Account created and operated by current or past employees of the bank. Hindu Undivided Family: The Hindu Undivided Family (HUF) is a joint family consisting of members descending from a common ancestor. A senior member is designated as the Karta responsible for managing the account for the HUF. Single: Any Indian citizen above the age of 18 and not falling under any of the categories listed above account is considered a single account holder.

Joint: A joint account type is created in the combined name of all the depositors, each of whom acting in his or her own individual capacity. A joint account can be created between any number of Individual, Minor, Staff and NRI constitution types.

1.2.2

Entities Each constitution in the entity section consists of categories as listed below:

Business Entities
Business Entities Proprietorship Private Limited Company Partnership Co-operative Public Limited Company Joint Hindu Family Business Limited Liability Partnership

Government, Government Agency or Entity

State Government Central Government State Government Undertaking Government of India Undertaking Government Authorities, Autonomous & Regulatory Bodies Liquidator Local Bodies

Societies & Associations

Registered Unregistered

Trusts
Public Private

Financial Institutions
Private Banks Public Sector Banks Regional Rural Banks State Co-operative Banks District Co-operative Banks Urban Co-operative Banks Money Service Businesses Non-Banking Financial Company

Non Profit Organisations

Trust Society Section 25 Company Unregistered Entity

Due Diligence Checklist

Checklist Constituti on 1 Individual Category Non Resident Indian

Basic Due Diligence Required Information Full legal name Date of birth Address in India Product type or account type applied for Country of residence Visa type for the country of residence Documentary Verification Obtain a copy of passport page containing photograph to serve as photo identity Obtain a copy of passport page containing address to serve as address proof. If the address does not match address in India, proof can be provided by establishing relationship using the documents listed in the following section Obtain a copy of a valid visa granted for the current country of residence

Enhanced Due Diligence Additional Information Current residential address Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain an additional photo identity document from list provided in the following section Obtain additional address proof document from list in the following section

Checklist Constituti on

2 Individual

Category

Foreign National

Basic Due Diligence Required Information Full legal name Address in India Nationality Date of birth Product type or account type applied for Indian visa type Information on the Indian employer (name, address etc.). PEP check Documentary Verification Obtain a copy of passport pages containing valid Indian visa and photograph. If the home address is displayed on the passport, obtain a copy of it Obtain a copy of the appointment letter along with an affidavit from the current employer verifying the address of the foreign national Obtain a copy of the employers PAN card or TIN Number

Enhanced Due Diligence Additional Information Address in home country Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain a copy of another photo identity Obtain a copy of another address proof

Checklist Constituti on

3 Individual

Category

Person of Indian Origin

Basic Due Diligence Required Information Full legal name Address in India Nationality Date of birth Product type or account type applied for If applicable, Indian employer information PEP check Documentary Verification Obtain a copy of the passport pages containing photograph and address Obtain a copy of the Person of Indian Origin card If employed in India, obtain a copy of the appointment letter along with an affidavit from the current employer verifying the address of the customer

Enhanced Due Diligence Additional Information Address in home country Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain a copy of another photo identity Obtain a copy of another address proof If available, obtain a copy of the employers PAN card of TIN number

Checklist Constituti on

4 Individual

Category

Minor

Basic Due Diligence Required Information Full legal name Date of birth of minor account holder Full name of the guardian Date of birth of guardian Relationship of minor account holder with guardian Address of the guardian Product type or account type applied for Documentary Verification Obtain an affidavit from the guardian indicating the relationship with the minor. Optionally, obtain a copy of one of the relationship establishment documents listed in the following section containing the name of the minor and the guardian and indicating a relationship between them. Obtain a copy of the KYC information (photo and address proof) of the guardian using the documents in the following section

Enhanced Due Diligence Additional Information Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain two copies of photo identity proof documents of the guardian from the Preferred Documents list in the following section Obtain two copies of address proof documents of the guardian from the Preferred Documents list in the following section

Checklist Constituti on

5 Individual

Category

Staff

Basic Due Diligence Required Information Full legal name Date of birth Home address Product type or account type applied for Employee code or number Documentary Verification For ex-staff members, obtain a copy of one photo identity document out of the listing in the following section except for the identity provided by the Bank For ex-staff members, obtain a copy of one address proof document out of the listing in the following section except for the identity provided by the Bank. In the case of address proof not being available, the account holder can provide the address proof using the KYC information of another individual and establishing the relationship using the documents listed in the following section For ex-staff members, obtain documentation certifying past employment with the Bank ( pay slip, letter of appointment, etc)

Enhanced Due Diligence Additional Information For ex-staff, if employed, obtain current employer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain two copies of photo identity proof documents from the Preferred Documents list in the following section Obtain two copies of address proof documents from the Preferred Documents list in the following section

Checklist Constituti on

6 Individual

Category

Hindu Undivided Family

Basic Due Diligence Required Information Full legal name of Karta Date of birth Home address Product type or account type applied for Documentary Verification Obtain a letter from the designated Karta indicating the account category as HUF and listing the names of members of the family Obtain complete KYC information of the Karta (photo and address proof) for account opening purposes using the documents list provided in the following section

Enhanced Due Diligence Additional Information Introducer information Source of funds Anticipated account activity

Additional Documentary Verification Obtain two copies of photo identity proof documents of the Karta from the Preferred Documents list in the following section Obtain two copies of address proof documents of the Karta from the Preferred Documents list in the following section

10

Checklist Constituti on

7 Individual

Category

Regular

Basic Due Diligence Required Information Full legal name Date of birth Home address Product type or account type applied for Documentary Verification Obtain a copy of one photo identity document out of the listing in the following section Obtain a copy of one address proof document out of the listing in the following section. In the case of address proof not being available, the client can indirectly provide proof via a combination of the relationship establishment documents as listed in the following section and the KYC (photo and address proof) of the individual establishing relationship with

Enhanced Due Diligence Additional Information Introducer information Employer information (name, address and industry sector) Source of funds Anticipated account activity Additional Documentary Verification Obtain two copies of photo identity proof documents from the Preferred Documents list in the following section Obtain two copies of address proof documents from the Preferred Documents list in the following section

11

Checklist Constituti on

8 Individual

Category

Joint

Basic Due Diligence Required Information Full legal name of all the account holders Date of birth of all account holders Home address of all the account holders Product type or account type applied for Relationship between account holders Documentary Verification Obtain complete KYC documentation on all account holders based on their category within the individual constitution

Enhanced Due Diligence Additional Information Obtain all the information for a high risk classification of each member of the joint account based on their respective category within the individual constitution Source of funds Anticipated account activity Additional Documentary Verification Obtain all the documentation for a high risk classification of each member of the joint account based on their respective category within the individual constitution

12

Checklist Constituti on

9 Business Entities

Categor y

Proprietorship

Basic Due Diligence Required Information Name of proprietorship Address of proprietorship Full legal name of the proprietor Home address of the proprietor Industry sector of proprietorship Product type or account type applied for Documentary Verification Obtain a letter of proprietorship to be completed by the client Obtain a copy of any two of the documents under Proof of Proprietorship Documents listing in the following section Obtain KYC documentation of the proprietor (photo and address proof) from the following section for account opening purposes

Enhanced Due Diligence Additional Information Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Anticipated account activity Additional Documentary Verification Copy of financials Obtain two copies of photo identity proof documents of the proprietor from the Preferred Documents list in the following section Obtain two copies of address proof documents of the proprietor from the Preferred Documents list in the following section Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

13

Checklist Constituti on

10 Business Entities

Categor y

Private Limited

Basic Due Diligence Required Information Name of the company Principal place of business Mailing address of the company Telephone/Fax number Industry sector of concern Names and addresses of account operators and beneficial owners Product type or account type applied for Documentary Verification Obtain a copy of the Certificate of Incorporation for the entity Obtain a copy of the Memorandum and Articles of Association for the entity If available, obtain a copy of the license for the line of business of the entity or any other government registration document available for the entity Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the board resolution listing the authorized

Enhanced Due Diligence Additional Information Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Anticipated account activity

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

14

signers for the account. Optionally, obtain a power of attorney or official document authorizing the individuals operating the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Checklist 11 Constituti Business Categor Cooperative on Entities y

Basic Due Diligence Required Information Name of cooperative Principal address of the cooperative Industry sector of cooperative Names and addresses of authorized account operators and senior managers Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification Obtain a copy of the registration documents for the entity Obtain a copy of the Byelaws of the cooperative Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a power of attorney or official document authorizing the individuals operating the account Obtain complete KYC documentation of all account operators based on their category within the individual

15

constitution

Checklist Constituti on

12 Business Entities

Categor y

Partnership

Basic Due Diligence Required Information Name of partnership Office address of the partnership Telephone/Fax number of the partnership Names and addresses of all the partners Product type or account type applied for Industry sector of partnership

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification Obtain a copy of the partnership deed signed by all the partners If available, obtain a copy of the license for the line of business of the partnership. Or optionally if partnership is registered, obtain a copy of registration documents If available, obtain a copy of the PAN card or TIN number of the entity

16

Obtain a copy of the telephone bill (within 6 months of account opening date) in the name of the entity or the partners Obtain complete KYC documentation of all partners based on their category within the individual constitution

Checklist Constituti on

13 Business Entities

Categor y

Limited Liability Partnership

Basic Due Diligence Required Information Name of the entity Office address of the entity Telephone/Fax number of the entity Names and addresses of all the partners and senior managers Product type or account type applied for Industry sector of concern Documentary Verification Obtain a copy of the partnership deed signed by all the partners If available, obtain a copy of the license for the line of business of the partnership. Or optionally, obtain a copy of the registration documents Obtain a copy of the PAN card or TIN information of the entity Optionally, obtain a power of attorney or legal document 17

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

authorizing members of the partnership to operate the account If available, obtain a copy of the telephone bill (within 6 months of account opening) in the name of the entity Obtain complete KYC documentation of all partners based on their category within the individual constitution

Checklist Constituti on

14 Business Entities

Categor y

Public Limited

Basic Due Diligence Required Information Name of the company Principal place of business Mailing address of the company Telephone/Fax number Industry sector of concern Names and addresses of authorized account operators, senior managers and beneficial owners Product type or account type applied for Documentary Verification If available, obtain a copy of the license for the line of business of the entity. Optionally obtain a government registration document for the entity Obtain a copy of the PAN card or TIN number of the entity 18

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Obtain name and address of beneficial owners of

Obtain a copy of the Certificate of Incorporation for the entity Obtain a copy of the Memorandum and Articles of Association for the entity Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a power of attorney or official document authorizing the individuals operating the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution 15 Business Entities

the entity Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

Categor y

Hindu Undivided Family

Basic Due Diligence Required Information Name of the entity Principal place of business Mailing address of the entity Industry sector of concern Name and address information of Karta and senior managers Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Attach results of address validation through 19

Documentary Verification If available, obtain a copy of the license for the line of business of the entity. Optionally, obtain any government registration document available for the entity Obtain a declaration from the Karta regarding the setting up of

the account Obtain all KYC documentation of the Karta based on the Kartas categorization within the individual constitution If available, obtain a copy of the PAN card or TIN number of the entity

registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

16 Trust

Categor y

Public

Basic Due Diligence Required Information Legal name of trust Complete address of trust Names of trustees, settlors and signatories Names and addresses of account operators, founders and the senior managers Product type or account type applied for Documentary Verification Obtain a copy of the trust deed Obtain a copy of the certificate of registration for the trust Any officially valid document identifying trustees, settlors and authorized signatories

Enhanced Due Diligence Additional Information Purpose of account (vendor accounts, accounts receivable, etc.) Anticipated account activity Purpose of trust Source of funds

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Copy of financials or annual reports Attach results of address validation through registered post. Optionally, perform a site visit to verify the 20

 Obtain complete KYC information of all account operators based on their category within the individual constitution Obtain a copy of the managing body resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account

address of the concern

Checklist Constituti on

17 Trust

Categor y

Private

Basic Due Diligence Required Information Legal name of trust Purpose of trust Complete address of trust Names and addresses of account operators, trustees, senior managers and the beneficiaries Product type or account type applied for

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.) Details of international presence Source of funds

21

Documentary Verification Obtain, if available, a copy of the trust deed Obtain a copy of the certificate of registration for the entity Any official document identifying trustees, settlors and beneficiaries Obtain a copy of the managing body resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Copy of financials or annual reports Public information in standard industry guides, periodicals, publications Obtain name and address of beneficial owners, trustees and senior managers of the trust Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

18 Non Profit Organizations

Categor y

Trust

Low Risk Required Information Legal name of trust Purpose of trust Complete address of trust Names and addresses of account operators, trustees

Enhanced Due Diligence Additional Information Anticipated account activity Details of international presence Purpose of account (vendor accounts, accounts receivable, 22

and the senior managers Product type or account type applied for

etc.) Details of international presence Source of funds

Documentary Verification Obtain a copy of the trust deed Obtain a copy of the certificate of registration for the trust Any official document identifying trustees, settlors and beneficiaries Obtain a copy of the managing body resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document listing the members authorized to operate the account If available, obtain a copy of the Annual Reports and financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

19 Non Profit Organizations

Categor y

Society

Basic Due Diligence

Enhanced Due Diligence 23

Required Information Legal name of Society Purpose of Society Complete address of Society Product type or account type applied for Names and addresses of account operators, trustees and beneficial owners

Additional Information Anticipated account activity Details of international presence Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Byelaws of the society Obtain a copy of the registration documents for the entity If available, obtain a copy of the Annual Reports and financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

20 Non Profit Organizations

Categor y

Section 25

24

Basic Due Diligence Required Information Legal name of organization Purpose of organization Complete address of organization Product type or account type applied for Names and addresses of account operators, trustees and the senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Details of international presence Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Memorandum and Articles of Association of the entity Obtain a copy of the registration documents for the entity Optionally, obtain a copy of the Annual Reports and financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

25

Checklist Constituti on

21 Societies and Associations

Categor y

Registered

Basic Due Diligence Required Information Legal name of Society Purpose of Society Complete address of Society Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Byelaws of the society Obtain a copy of the Annual Reports or financial documents of the entity Obtain a copy of the registration documents for the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

26

Checklist Constituti on

22 Societies and Associations

Categor y

Unregistered

Low Risk Required Information Name of Society Purpose of Society Complete address of Society Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.) Source of funds

Documentary Verification Obtain a copy of the board resolution listing the authorized signers for the account. Optionally, obtain a copy of the power of attorney or official document authorizing the members operating the account Obtain a copy of the Byelaws of the society Optionally, a copy of the Annual Reports or financial documents of the entity Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

27

Checklist Constituti on

23 Government, Government Agency or Categor Entity y

State Government

Basic Due Diligence Required Information Legal name Purpose of government body; Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government

28

Checklist Constituti on

24 Government, Government Agency or Categor Entity y

Central Government

Basic Due Diligence Required Information Legal name Purpose of government body Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.)

29

Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

25 Government, Government Agency or Categor Entity y

State Undertaking

Government

Basic Due Diligence Required Information Legal name Industry sector of undertaking Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.)

30

Documentary Verification Obtain a copy of the Certificate of Incorporation of the entity Obtain a copy of the Memorandum and Articles of Association of the entity Obtain a copy of the audited annual report Obtain a board resolution indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government agency or entity

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

Checklist Constituti on

26 Government, Government Agency or Categor Entity y

Central Government Undertaking

Basic Due Diligence Required Information Legal name Industry sector of undertaking Complete address Product type or account type applied for Names and addresses of account operators

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, 31

etc.) Documentary Verification Obtain a copy of the Certificate of Incorporation of the entity Obtain a copy of the Memorandum and Articles of Association of the entity Obtain a copy of the audited annual report Obtain a board resolution indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government agency or entity Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

32

Checklist Constituti on

27 Government, Government Agency or Categor Entity y

Liquidator

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Name of company under liquidation Industry sector of company under liquidation Names and addresses of account operators Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Obtain a copy of the court order of appointment to act as liquidator

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.)

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

33

Checklist Constituti on

28 Government, Government Agency or Categor Entity y

Government Authorities, Autonomous & Regulatory Bodies

Low Risk Required Information Legal name Purpose of government body Complete address Product type or account type applied for Names and addresses of account operators Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government agency or entity

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

34

Checklist Constituti on

29 Government, Government Agency or Categor Entity y

Local Bodies

Basic Due Diligence Required Information Legal name Purpose of government body Complete address Product type or account type applied for Names and addresses of account operators Documentary Verification Obtain an authorization letter from the government body wishing to open an account indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution Additional Checks It is recommended that the bank verify the request to open the account through an enquiry with the controlling department of the government agency or entity

Enhanced Due Diligence Additional Information Anticipated account activity Purpose of account (vendor accounts, accounts receivable, etc.)

Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern

35

Checklist Constituti on

30 Financial Institutions

Categor y

Public Sector Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the RBI registration or license information for the bank Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the board resolution or an official letter indicating the officials authorized to operate the account Obtain a copy of the Memorandum, Certificate of Incorporation and the Articles of Association for the bank It is desirable to obtain, in affidavit form, the KYC policy of the bank 36

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

Basic Due Diligence Obtain a copy of the annual audited report for the previous financial year Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Enhanced Due Diligence

Checklist Constituti on

31 Financial Institutions

Categor y

Private Sector Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of beneficial owners, account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the RBI registration or license information for the bank Obtain a copy of the PAN card or TIN of the entity Obtain a copy of the annual audited report for the previous financial year

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of 37

Basic Due Diligence Obtain a copy of the Articles of Association and Certificate of Incorporation for the bank If the company is held by a publically traded company, obtain information on parent companys ownership, listing and nature of activities Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account It is desirable to obtain, in affidavit form, the KYC policy of the bank Obtain complete KYC documentation of all account operators based on their category within the individual constitution Obtain information on the Board and CEO of the bank including current country of domicile

Enhanced Due Diligence the concern Obtain name and address of beneficial owners of the bank

Obtain information on AML measures implemented

38

Checklist Constituti on

32 Financial Institutions

Categor y

Regional Rural Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Holding bank information (name, address, registration information) Names and addresses of account operators and senior managers Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws of the bank It is desirable to obtain, in affidavit form, KYC policy of the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter indicating the officials authorized to operate the account Obtain complete KYC documentation of all account

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.) Additional Documentary Verification Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

39

operators based on their category within the individual constitution

Checklist Constituti on

33 Financial Institutions

Categor y

Urban Cooperative Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws of the bank It is desirable to obtain, in affidavit form, KYC policy of the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the 40

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Checklist Constituti on

34 Financial Institutions

Categor y

State Cooperative Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the bank If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws of the bank It is desirable to obtain, in affidavit form, KYC policy of

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the

41

the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

concern Obtain information on AML measures implemented

Checklist Constituti on

35 Financial Institutions

Categor y

District Cooperative Banks

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the bank 42

Additional Documentary Verification Attach results of address validation through

If available, obtain a copy of the RBI registration or license information for the bank Obtain a copy of the Byelaws the bank It is desirable to obtain, in affidavit form, KYC policy of the bank Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

registered post. Optionally, perform a site visit to verify the address of the concern Obtain information on AML measures implemented

Checklist Constituti on

36 Financial Institutions

Categor y

Money Service Businesses

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of beneficial operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered owners, account Markets serviced (domestic/ international/ high risk jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification 43

Additional Documentary Verification

 Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the license to operate for entity or NFBC status with the Reserve Bank of India Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the Memorandum, Articles of Association for the entity and Certificate of Incorporation for the entity Obtain information on the Board and CEO of the bank including current country of domicile Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern AML policies and procedures implemented Obtain name and address of beneficial owners of the entity

Checklist Constituti on

37 Financial Institutions

Categor y

Non-Banking Financial Company

Basic Due Diligence Required Information Legal name Complete address Product type or account type applied for Names and addresses of beneficial owners, account operators and senior managers

Enhanced Due Diligence Additional Information Anticipated account activity Products and services offered Any additional information on purpose of business Markets serviced (domestic/ international/ high risk

44

jurisdictions) Purpose of account (vendor accounts, accounts receivable, etc.)

Documentary Verification Obtain a copy of the PAN card or TIN number of the entity Obtain a copy of the license to operate for entity Obtain a copy of the annual audited report for the previous financial year Obtain a copy of the Memorandum, Articles of Association and the Certificate of Incorporation of the entity Obtain information on the Board and CEO of the bank including current country of domicile Obtain a copy of the board resolution or an official letter requesting for the creation of the account and indicating the officials authorized to operate the account Obtain complete KYC documentation of all account operators based on their category within the individual constitution

Additional Documentary Verification Public information in standard industry guides, periodicals, publications Attach results of address validation through registered post. Optionally, perform a site visit to verify the address of the concern AML policies and procedures implemented Obtain name and address of beneficial owners of the entity

List of Officially Valid Documents

45

Verification documents for individuals (identity and address proof) are divided into preferred and acceptable documents. It is recommended that whenever available, documents from the preferred list should be used for verification purposes.

Photo Identity Documents

Preferred Documents Driving License PAN Identity Card Passport Voter Identity Card Acceptable Documents Aadhaar card* Govt. Department Identity Card Letter from MP/MLA/MC/GZ Officer including a notarized photograph NREGA Job Card* Social Security Card (If Applicable)

Address Proof Documents

Preferred Documents Driving License Passport Voter Identity Card Acceptable Documents Any id containing address issued by Govt. Bank Account Statement (for six months prior to account opening) Bank Passbook Employer certificate (not older than six months from account opening) Gas Bill (not older than six months from account opening) Income Tax Return (latest) Letter from MP/MLA/MC/GZ Officer attesting to address NREGA Job Card Property Tax Assessment Order Residential Permit issued by state police Water Bill (not older than six months from account opening)

* Please note that if the Aadhar Card,

Aadhar Letter or the NREGA Job card is exclusively provided for KYC purposes, then the bank account opened will be subjected to all conditions and limitations prescribed for small accounts as described in section 2.4 of the KYC, AML and CFT Programme.

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Relationship Establishment Documents

Listed Documents Birth Certificate Marriage Certificate PAN Card Passport School certificate showing relationship Voter ID Card Any other document establishing relationship issued by the Govt. of India

Proof of Proprietorship Documents

(Any twoDocuments required in the name of the proprietary c List of documents Certificate/license issued by Municipal Authorities under Shop & Establishment Act Certificate/registration document issued by Sales Tax/Service Tax/ Professional Tax authorities CST/VAT certificate License issued by Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian medical Council and Food and Drug Control Authorities Registration certificate issued in the name of the proprietary concern by the Central Government or State Authority Department Sales and Income Tax returns IEC (Importer Exporter Code) issued by the office of DGFT

47