KYC GUIDE LINES

                                              K.Y.C (KNOW YOUR CUSTOMER)

Ø KYC guidelines issued by RBI under section 35A of banking regulation act.

Ø Objective :   

Ø A.M.L: anti money londering

Ø C.F.T : combating financing of terrorism

Ø F.A.T.F : Financial action task force

Ø P.M.L.A : Prvevention of money londering act

Ø REQUIREMENTS FOR OPENING THE ACCOUNT :

Ø PHOTOGRAPH : FOR identification of customer

Ø PROOF OF ID.

Ø PROOF OF ADDRESS

Ø AS per rule 114P of income tax act (PAN NO)

Ø DOCUMENTS ACCEPTABLE FOR PROOF OF ID :

Ø AADHAR CARD

Ø VOTER ID CARD

Ø DRIVING LICENCE

Ø PASSPORT

Ø PAN CARD

Ø NAREGA CARD

Ø DOCUMENTS FOR PROOF OF DETAILS:

Ø ALL OF THE ABOVE EXCEPT PAN CARD

Ø Alternative documents for proof of address :

Ø Photo attested by gazette officer

Ø ID card issued by govt. departmentor bank or statutory authority or regulators (RBI, SEBI, IRDA etc.)

Ø Public sector undertaking

Ø Alternative documents for proof of address :

Ø Utility bill

Ø Municipal tax receipt

NOTE :   if present address is different from proof of address,  take undertaking from the customer.

NOTE : if there is a change in proof of address then new proof of address  to be given within 6 months.

SMALL ACCOUNTS :

Suitable for persons who do not have proof of address & id.

RESTRICTIONS :

Ø Max. balance in the account = 50,000.00

Ø Max. credit in a financial year = 1,00,000/-

Ø Max. wdl. In a month = 10,000/-

Ø Foreign remittance can not be credited

Ø Proof of address & id given within 12 months

Ø Further 12 months can be given if proof of application for proof of id & address.

Ø Partial freezing of account , if proof of address & id not given within 6 months of the notice from the bank & complete freezing if not given within next 6 months.

Ø BASIC SAVING BANK DEPOSIT A/C :

Ø FACILITIES :

Ø Can be maintained with zero balance

Ø Debit card will be issued free

Ø RESTRICTIONS :

Ø Max. withdrawl in a month = 4

Ø All other saving a/c in that bank to be closed within 30 days of opening this a/c

Ø KYC rules applicable unless it is a small account

Ø KYC DOCUMENTS TO BE TAKEN AGAIN :

Ø HIGH RISK : 1-2 YEARS

Ø MEDIUM RISK : 1-8 YEARS

Ø LOW RISK : 1 – 10 YEARS

Ø RISK CLLASSIFIACTION OF CUSTOMERS :

Ø HIGH RISK :

Ø NON RESIDENTS

Ø HIGH NETWORTH INDIVIDUALS

Ø JEWELLERS

Ø POLITICALLY EXPOSED PERSON

Ø CLUB, SOCIETY, TRUST,NGO

Ø MEDIUM RISK:

Ø Proprietorship a/c

Ø Partnership

Ø Ltd co.

Ø HUF

Ø LOW RISK :

Ø Salaried person

Ø Pensioner

Ø Small a/c

Ø BSBDA

Ø GOVT. department

Ø Regulators (RBI, SEBI, IRDA etc.)

Ø Statutory authority

Ø NOTE :  Risk classification to be reviewed every 6 months

Ø Component of KYC policy :

Ø Customer identification

Ø Customer acceptance policy

Ø Risk classification

Ø Monitoring of txns

Ø Monitoring of txns & reporting to F.I.U :

Ø C.T.R (cash txn. Report) it is sent monthly within 15 days from close of the month

Ø Cash receipt in a month in an account more than 10 lakh.

Ø Cash payment in an account in a month more than Rs 10 lakh.

Ø Individual txns. Below Rs 50,000/- will not be separately.

Ø S.T.R (suspicious txn report) to be send within 7 days from confirmation of suspicion

Ø C.C.R ( counterfeit currency report) send monthly within 15 days from close of the month

Ø Preservation of record :

Ø Documents taken for opening of a/c upto 5 yearsfrom close of account

Ø Txn. Reported to F.I.U : upto 5 years from date of txn

Ø Saving bank account :

Ø Banks prefer CASA deposits because cost of funds is low

Ø Interest rate on saving bank deposits decided by bank

Ø Interest rate will be paid quarterly

Ø Bank can pay differential interest rate if saving deposit is more than 1,00,000/-

FOR DETAILS THEN GO TO FOLLOWING LINKS

KYC GUIDE LINE AND RULES BY RBI