DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION OF INDIA (DICGC)

DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION OF INDIA (DICGC)

 The functions of the DICGC are governed by the provisions of 'The Deposit Insurance and Credit Guarantee Corporation Act, 1961' (DICGC Act) and “The Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961” framed by the Reserve Bank of India in exercise of the powers conferred by subsection(3) of Section 50 of the said Act.
 The preamble of the Deposit Insurance and Credit Guarantee Corporation Act,1961 states that it is an Act to provide for the establishment of a Corporation for the purpose of insurance of deposits and guaranteeing of credit.
 The concept of insuring deposits kept with banks received attention for the first time in the year 1948 after the banking crises in Bengal.
 The question came up for reconsideration in the year 1949, but it was decided to hold it in abeyance till the Reserve Bank of India ensured adequate arrangements for inspection of banks.
 Subsequently, in the year 1950, the Rural Banking Enquiry Committee also supported the concept. Serious thought to the concept was, however, given by the Reserve Bank of India and the Central Government after the crash of the Palai Central Bank Ltd., and the Laxmi Bank Ltd. in 1960.
 The Deposit Insurance Corporation (DIC) Bill was introduced in the Parliament on August 21, 1961.After it was passed by the Parliament, the Bill got the assent of the President on December 7, 1961 and the Deposit Insurance Act, 1961 came into force on January1, 1962.
 The Deposit Insurance Scheme was initially extended to functioning commercial banks only. This included the State Bank of India and its subsidiaries, other commercial banks and the branches of the foreign banks operating in India.
 Since 1968, with the enactment of the Deposit Insurance Corporation (Amendment) Act, 1968, the Corporation was required to register the 'eligible cooperative banks' as insured banks under the provisions of Section 13A of the Act.


An eligible co-operative bank means a co-operative bank (whether it is a State co-operative bank, a Central co-operative bank or a Primary co-operative bank) in a State which has passed the enabling legislation amending its Cooperative Societies Act, requiring the State Government to vest power in the Reserve Bank to order the Registrar of Co-operative Societies of a State to windup a co-operative bank or to supersede its Committee of Management and to require the Registrar not to take any action for winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the Reserve Bank of India.
 Further, the Government of India, in consultation with the Reserve Bank of India, introduced a Credit Guarantee Scheme in July 1960. The Reserve Bank of India was entrusted with the administration of the Scheme, as an agent of the Central Government, under Section 17 (11 A)(a) of the Reserve Bank of India Act, 1934and was designated as the Credit Guarantee Organization (CGO) for guaranteeing the advances granted by banks and other Credit Institutions to small scale industries.
 The Reserve Bank of India operated the scheme up to March 31, 1981.
 The Reserve Bank of India also promoted a public limited company on January14, 1971, named the Credit Guarantee Corporation of India Ltd (CGCI).
 The main thrust of the Credit Guarantee Schemes, introduced by the Credit Guarantee Corporation of India Ltd., was aimed at encouraging the commercial banks to cater to the credit needs of the hitherto neglected sectors, particularly the weaker sections of the society engaged in non-industrial activities, by providing guarantee cover to the loans and advances granted by the credit institutions to small and needy borrowers covered under the priority sector.
 With a view to integrating the functions of deposit insurance and credit guarantee, the above two organizations (DIC & CGCI) were merged and the present Deposit Insurance and Credit Guarantee Corporation (DICGC) came into existence on July 15, 1978.
 Consequently, the title of Deposit Insurance Act, 1961was changed to 'The Deposit Insurance and Credit Guarantee Corporation Act, 1961 '.Effective from April 1, 1981, the Corporation extended its guarantee support to credit granted to small scale industries also, after the cancellation of the Government of India's credit guarantee scheme.
 With effect from April 1, 1989, guarantee cover was extended to the entire priority sector advances, as per the definition of the Reserve Bank of India. However, effective from April 1, 1995, all housing loans have been excluded from the purview of guarantee cover by the Corporation.

National Bank of Agriculture and Rural Development (NABARD)

National Bank of Agriculture and Rural Development (NABARD):
 NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
 It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas. In discharging its role as a facilitator for rural prosperity NABARD is entrusted with
1. Providing refinance to lending institutions in rural areas
2. Bringing about or promoting institutional development and
3. Evaluating, monitoring and inspecting the client banks
 Besides this pivotal role, NABARD also:
 Acts as a coordinator in the operations of rural credit institutions
 Extends assistance to the government, the Reserve Bank of India and other organizations in matters relating to rural development
 Offers training and research facilities for banks, cooperatives and organizations working in the field of rural development

 Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development
 Acts as regulator for cooperative banks and RRBs
 Extends assistance to the government, the Reserve Bank of India and other organizations in matters relating to rural development
 Offers training and research facilities for banks, cooperatives and organizations working in the field of rural development
 Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development

Possible indication of Suspicion under PMLA

 Possible indication of Suspicion:
Identity of client

False identification documents
Identification documents which could not be verified within
reasonable time
Non face to face client
Clients in high risk jurisdiction
Doubt over the real beneficiary of the account
 Accounts opened with names very close to other established
business entities
Receipt back of well come kit undelivered at the address given by
the client
Bounced communication
 Frequent change of name, address and bank and demat account
details.

Suspicious Background

Suspicious backgrounds or links with criminals
Multiple Accounts
 Large number of accounts having a common parameters such as
common partners / directors 1 promoters I address I email address /
telephone numbers, introducer or authorized signatory
 Unexplained transfers between such multiple accounts.

Activity in Accounts
 Unusual activity compared to past transactions
 Use of different accounts by client alternatively
 Sudden activity in dormant accounts
 Activity inconsistent with what would be expected fiom declared
income of Client
Nature of Transactions
 Unusual or unjustified complexity
 No economic rationale
Source of funds are doubtful
 Appears to be case of insider trading
Purchases made on own account transferred to a third party through
an off market transactions through DP account
 Transactions reflect likely market manipulations
Suspicious off market transactions

Definitions under PMLA Act 2002

Definitions
Rule 2 of the Prevention of Money-laundering (Maintenance of Records Rules, 2005 lays down following definitions.

Definitions

(1) In these rules, unless the context otherwise requires, -

(a) "Act" means the Prevention of Money-laundering Act, 2002 (15 of 2003);

(b) “client due diligence” means due diligence carried out on a client referred to in clause (ha) of sub-section (1) of section 2 of the Act;

(ba) “Designated Director” means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under Chapter IV of the Act and the Rules and includes—(ba) “Designated Director” means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under Chapter IV of the Act and the Rules and includes—

(i)the Managing Director or a whole-time Director duly authorized by the Board of Directors if the reporting entity is a company,

(ii)the managing partner if the reporting entry is a partnership firm,

(iii)the proprietor if the reporting entity is a proprietorship concern,

(iv)the managing trustee if the reporting entity is a trust

(v)a person or individual, as the case may be, who controls and manages the affairs of the reporting entity if the reporting entity is an unincorporated association or a body of individuals, and

(vi)such other person or class of persons as may be notified by the Government if the reporting entity does not fall in any of the categories above.

 Explanation.—For the purpose of this clause, the terms “Managing Director” and “Whole-time Director” shall have the meaning assigned to them in the Companies Act, 1956 (1 of 1956);

(bb) “Designated Officer” means any officer or a class of officers authorized by a banking company, either by name or by designation, for the purpose of opening small accounts.

(c) “Director” means the Director appointed under sub-section (1) of section 49 of the Act for the purposes of sections 12, 12A and 13 of the Act;

(ca) “non profit organisation” means any entity or organisation that is registered as a trust or a society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a company registered under section 25 of the Companies Act, 1956 (1 of 1956);

(d) “officially valid do(d) “officially valid document” means the passport, the driving licence, the Permanent Account Number (PAN) Card, the Voter’s Identity Card issued by Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, the letter issued by the Unique Identification Authority of India containing details of name, address and Aadhaar number or any other document as notified by the Central Government in consultation with the Regulator:
Provided that where simplified measures are applied for verifying the identity of the clients the following documents shall be deemed to be officially valid documents:—

(a)identity card with applicant's Photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;

(b)letter issued by a gazetted officer, with a duly attested photograph of the person.

(e) "prescribed value" means the value of transaction prescribed under these rules;

(f) “Principal Officer” means an officer designated by a 1[reporting entity];

(fa)“Regulator” means a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the activity of 3[reporting entities or the Director as may be notified by the Government for a specific reporting entity or a class of reporting entities or for a specific purpose;

(faa) “Rules” means the Prevention of Money-laundering(faa) “Rules” means the Prevention of Money-laundering (Maintenance of Records) Rules, 2005;

(fb) “small account” means a savings account in a banking company where—

(i) the aggregate of all credits in a financial year does not exceed rupees one lakh,

(ii) the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand, and

(iii) the balance at any point of time does not exceed rupees fifty thousand.

(g) "suspicious transaction" means a transaction i> 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;



1[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 organisation or those who finance or are attempting to finance terrorism.]

2[(h) “transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof and includes—

(i) opening of an account;

(ii) deposits, 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 nonphysical means;

(iii) the use of a safety deposit box or any other form of safe deposit; (iv) entering into any fiduciary relationship;

(v) any payment made or received in whole or in part of any contractual or other legal obligation;

(vi) any payment made in respect of playing games of chance for cash or kind including such activities associated with casino; and

(vii) establishing or creating a legal person or legal arrangement.]

(2) All other words and expressions used and not defined in these rules but defined in the Act shall have the meaning respectively assigned to them in the Act

Micro, Small and Medium Enterprises (MSME): The Importance in Indian Economy

For a country to grow, the government should actively promote business enterprises. Among business enterprises, the Micro, Small and Medium Enterprises (MSME) deserve special attention. Though MSMEs are small investment enterprises, but their contribution to the Indian economy is very significant.

What are MSMEs?

Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 which was notified on October 2, 2006, deals with the definition of MSMEs. The MSMED Act, 2006 defines the Micro, Small and Medium Enterprises based on

the investment in plant and machinery for those engaged in manufacturing or production, processing or preservation of goods and
the investment in equipment for enterprises engaged in providing or rendering of services.
The guidelines with regard to investment in plant and machinery or equipment as defined in the MSMED Act, 2006 are:
Nature of activity of the Enterprise
Investment in plant and machinery excluding land and building for enterprises engaged in manufacturing or production, processing or preservation of goods
Investment in equipment excluding land and building for enterprises engaged in providing or rendering of services (loans up to Rs 1 crore)
Micro
Not exceeding Rs.25.00 Lakhs
Not exceeding Rs.10.00 Lakhs
Small
More than Rs.25.00 lakhs but does not exceed Rs.500.00 lakhs
More than Rs.10.00 lakhs but does not exceed Rs.200.00 lakhs
Medium
More than Rs.500.00 lakhs but does not exceed Rs.1000.00 lakhs
More than Rs.200.00 lakhs but does not exceed Rs.500.00 lakhs
Note: The investment in plant and machinery is the original cost excluding land and building and other items specified by the Ministry of Small Scale Industries vide its notification no. S.O. 1722 (E) dated 05.10.2006.

List of enterprises that are engaged in providing or rendering services
The illustrative lists of enterprises that are engaged in providing or rendering services are:

Small road and water transport operators (original investment in vehicles up to Rs.200.00 lacs under Priority sector)
Retail trade (with credit limits not exceeding Rs.20.00 lakhs)
Small business (whose original cost price of the equipment used for the purpose of business does not exceed Rs.20.00 lakhs
Professional and self-employed persons (whose borrowing limits do not exceed Rs.10.00 lakhs of which not more than Rs.2.00 lakhs should be for working capital requirements except in case of professionally qualified medical practitioners setting up of practice in semi-urban and rural areas, the borrowing limits should not exceed Rs.15.00 lakhs with a sub-ceiling of Rs.3 lakhs for working capital requirements)
Significance of MSMED Act 2006
With the enactment of MSMED Act 2006, the paradigm shift that has taken place is the inclusion of services sector in the definition of Micro, Small and Medium Enterprises, apart from extending the scope to Medium Enterprises.

Share of MSMEs in India
The Micro, Small and Medium Enterprises occupies a strategic importance in terms of output (about 45% of manufacturing output), exports (about 40% of the total exports) and employment (about 69 million persons in over 29 million units throughout the country) based on the Planning Commission, 2012. It is observed worldwide that as income increases the share of the informal sector decreases and that of the formal SME sector increases.

Worldwide Trends in SME Sector
Japan – SMEs employ 70% of the wage earners and contribute 55% of the value added.
Thailand – SMEs employ 60.7% of the population while contributing 38% to the GDP.
China – SMEs contribute to over 68% of the exports – in the last 20 years created more SMEs than the total number of SMEs in Europe and the US combined.
Note: In China, an industrial SME is defined as having up to 2,000 employees, while a small business has less than 300 employees and a medium sized business has employees between 301 and 2,000.

What is the Importance and role of MSMEs in Indian Economy?

To generate large scale employment
In India, capital is scarce and labor abundant. MSMEs are thought to have lower capital-output and capital-labour ratios than large-scale industries, and therefore, better serve growth and employment objectives. The MSME sector in India has grown significantly since 1960 – with an average annual growth rate of 4.4% in the number of units and 4.62% in employment (currently employing 30 million). Not only do MSMEs generate the highest employment per capita investment, they also go a long way in checking rural-urban migration by providing people living in isolated areas with a sustainable source of employment.

To sustain economic growth and increase exports
Non-traditional products account for more than 95% of the MSME exports (dominating in the export of sports goods, readymade garments, plastic products etc.). Since these products are mostly handcrafted and hence eco-friendly, there exists a tremendous potential to expand the quantum of MSME led exports. Also, MSMEs act as ancillary industries for Large Scale Industries providing them with raw materials, vital components and backward linkages e.g. large scale cycle manufacturers of Ludhiana rely heavily on the MSMEs of Malerkotla which produce cycle parts.

Making Growth Inclusive
MSMEs are instruments of inclusive growth which touch upon the lives of the most vulnerable and marginalized. For many families, it is the only source of livelihood. Thus, instead of taking a welfare approach, this sector seeks to empower people to break the cycle of poverty and deprivation. It focuses on people’s skills and agency. However, different segments of the MSME sector are dominated by different social groups.

The Twelfth Plan has listed the following as the objectives for the MSME sector
Promoting competitiveness and productivity in the MSME space.
Making the MSME sector innovative, improving technology and depth.
Enabling environment for promotion and development of MSMEs.
Strong presence in exports.
Improved managerial processes in MSMEs.
Evolution and Performance of the MSME Sector in India
Pre-Liberalization
During the post-Independence period, small firms were expected to play an important role in the development process, especially in absorbing surplus labor and achieving an equitable income distribution. This is the traditional stylized role assigned to small industries.
At the beginning of the industrialization process, flexibility in production and the ability to offer differentiated products allow smaller firms to grow rapidly.
Later, large-scale firms come to dominate the size distribution, making up a greater share of output, employment, and value-added because of scale economies, managerial efficiency, better access to finance and infrastructure, and a favorable tariff structure.
Post-Liberalization
The growth rate of MSME, on an average, has declined considerably in terms of units and even employment but has improved marginally in terms of output and exports, in the post-liberalization period compared to the pre-liberalization period.
This could be probably due to – (a) With the threat of competition, new MSME units would not have come up as significantly in the liberalization period as compared to the pre-liberalization period (b) The new MSME units that came up after liberalization may have been much more capital intensive than those that have come up in the past – with some proportions of the existing MSME units having modernized themselves to rely less on labour and also to take advantage of developments in the global market (c) Unable to face the competition some MSMEs exited the market, thereby affecting MSME employment and output initially.
However, though it appears that the MSME growth performance (in terms of employment, output, and exports) might have suffered initially but it has been able to recover impressively subsequently in the decade of 2000s.
The share of the registered MSMEs in India’s GDP more than doubled during this period and its share in total organized sector employment increased to 34% during the same period. Although the share of registered MSME exports declined sharply initially, it bounced back to 12% in 2006-07.
The improved economic health of registered MSME sector is reflected in another parameter i.e. industrial sickness. Sickness in the registered MSME sector has declined both absolutely and relatively. This may be the outcome of improvements in management deficiencies, insufficient financial control, research and development, obsolete technology, inadequate demand, shortage of raw materials, infrastructure bottlenecks, etc.
There are two more issues concerning MSME performance:
Ancillarisation – the promotion of inter-firm linkages between large firms and MSME through subcontracting and ancillarisation in both public and private sectors has been an important dimension of India’s MSME policy. Any growth of ancillarisation and sub-contracting would be advantageous to the MSME sector by way of assured marketing, covered technical assistance, finance, and supply of raw materials and training. During this period the percentage of ancillary units increased from 5 percent. Note that however a significant proportion of MSME subcontracting and ancillarisation are informal in nature. The growing inter-firm linkages, formal as well as informal, would have benefited the economic performance of MSME sector.
The degree of internationalization – world over, an export strategy has been the primary foreign market entry mode adopted by MSMEs in their internationalization efforts – this has been observed in the Indian context as well. At the national level, several factors contributed to the increasing trend of MSME internationalization like – structural shift in the composition of MSME exports from traditional to non-traditional items, modes of entry such as MNCs and e-Commerce etc.
Policy Towards Small-Scale Industries


Though MSMEs were recognised as important for employment generation and equitable distribution of income from the earliest days of Indian Independence, it appears that the objectives of policies stressing the role of MSMEs are not being realised.
Since independence in 1947, especially since the late 1950s, development has been wide-ranging, both in terms of programs and regions. Policy measures included inter-alia fiscal concessions, subsidized and directed bank credit, and technical and marketing support, along with reservations of products for exclusive production by the MSME sector.
These policy measures were in tune with the other policies such as the domestic investment and foreign trade policies that became more restrictive over the years.
Since the mid-1980s there has been a gradual turnaround in policy, including reforms in the tax system and liberalization of import policy.
The shift in MSME policy emphasis from protection to the promotion of competitiveness began with the introduction of an exclusive policy for MSME in 1991. Since then, the policy support in the 1990s and early 2000s has been large to enable the MSMEs to overcome key challenges to their performance and growth, namely, finance, technology, and marketing, among others.
To operate these programs and to monitor their progress, new agencies and institutions have been set up, and the existing ones strengthened at the national, regional, state, and lower levels. There is also a special bank for MSMEs – SIDBI. The SSIs have their own associations and are also represented in the national and state level associations of large-scale industries.
Evaluation of the Reservation Policy
The policy of reserving products for exclusive manufacture in the small-scale sector was started in 1967 with forty-seven items; the list of reserved items rose to 873 in 1984.
The number of items on the reserved list for the SSI sector was brought down to 836 by 1989.
The pace of reforms accelerated after 1991: average tariff rates have been steadily lowered, quantitative restrictions have been removed, and domestic investment policies have been liberalized.
Over time, the number of items on the reserved list has also been reduced and stands at 605 in 2005.
With liberalization, since all the items on the reserved list can now be imported, MSMEs face competition from foreign enterprises even though large scale industries in India cannot produce these products.
The Censuses of the SSIs also suggest that the policy of reserving goods for production by SSIs has not been very effective. The number of units making reserved products was small compared to the overall size of the MSME sector, and the reserved products account for a small share of the total value of output in the MSME sector.
Also, it appears that the export performance of India may have suffered because of the reservation policy. Most growing economies witness a changing structure of exports, with a high growth of exports of labour-intensive and resource-based industries. The export structure of India has not changed much in the last two decades, and this may be because many commodities in the potential high-growth category come under the reserved list.
What are the challenges of MSME?
Most of the unregistered MSMEs would predominantly comprise micro enterprises, particularly confined to rural India, operating with obsolete technology, limited access to institutional finance etc. And there is a need to transform the huge unregistered MSME into registered MSME.
Need to improve the competitiveness of the overall MSME sector.
Access to technology.
IPR related issues.
Design as a market driver.
Wasteful usage of resources/manpower.
Energy inefficiency and associated high cost.
Low ICT usage.
Low market penetration.
Quality assurance/certification.
Standardization of products and proper marketing channels to penetrate new markets.
The definition for MSMEs must be updated – considering inflation and availability of better technologies since the last change in 2006.
Recent Initiatives
As part of the National Manufacturing Competitiveness Programme (NMCP) – 10 specific initiatives were taken to enhance the competitiveness of the entire value chain of the MSME sector.
Limited Liability Partnership (LLP) Act, 2008 was introduced to enable early corporatization of MSMEs and tap the capital market for fund raising. Accordingly, MSME platforms are created in BSE and NSE in 2012.
To develop a roadmap for the development and promotion of MSMEs, a task force was created by the Prime Minister of India in 2009. The Task Force, which comprised, among others, six specific theme-based sub-groups (on credit, marketing, infrastructure, technology, skill development, exit policy, labor, and taxation) submitted its report in 2010 suggesting: (1) Immediate policy measures (2) Medium-term institutional measures (3) Legal and regulatory structures to create a conducive environment for entrepreneurship and growth of MSMEs.
The Inter-Ministerial Committee for Accelerating Manufacturing in Micro, Small and Medium Enterprises made recommendations on – (a) the promotion of start-ups (b) facilitating operation and growth (covering credit, technology, and marketing) (c) closure and exit (d) labour laws and regulations.
These policy initiatives are clear and consistent, aimed at transforming the ecosystem for the MSMEs sector by influencing: (1) Birth (encouraging Start-Ups) (2) Operations and growth (by simplifying laws and regulations, and facilitating their access to credit. Better technology and dynamic markets, apart from skilled labour and reliable infrastructure) (3) Orderly and easy exit
Thus, the emerging focus of India’s MSME policy aims at covering the entire lifecycle of MSMEs to ensure a healthy, vibrant and competitive MSME sector.
Summary
The guidelines with regard to investment in plant and machinery or equipment as defined in the MSMED Act, 2006 are:

Financial Intelligence Unit – India (FIU-IND)

Financial Intelligence Unit – India (FIU-IND)

Financial Intelligence Unit – India (FIU-IND) was set by the Government of India in 2004 as
the central national agency responsible for receiving, processing, analyzing and disseminating
information relating to suspect financial transactions. FIU-IND is also responsible for
coordinating and strengthening efforts of national and international intelligence, investigation
and enforcement agencies in pursuing the global efforts against money laundering and related
crimes. FIU-IND is an independent body reporting directly to the Economic Intelligence
Council (EIC) headed by the Finance Minister.

Functions of FIU-IND

The main function of FIU-IND is to receive cash/suspicious transaction reports, analyse them
and, as appropriate, disseminate valuable financial information to intelligence/enforcement
agencies and regulatory authorities . The functions of FIU-IND are:
Collection of Information: Act as the central reception point for receiving Cash
Transaction reports (CTRs) and Suspicious Transaction Reports (STRs) from various
reporting entities.
Analysis of Information: Analyze received information in order to uncover patterns

of transactions suggesting suspicion of money laundering and related crimes.
Sharing of Information: Share information with national intelligence/law
enforcement agencies, national regulatory authorities and foreign Financial
Intelligence Units.
Act as Central Repository: Establish and maintain national data base on cash
transactions and suspicious transactions on the basis of reports received from
reporting entities.
Coordination: Coordinate and strengthen collection and sharing of financial
intelligence through an effective national, regional and global network to combat
money laundering and related crimes.
Research and Analysis: Monitor and identify strategic key areas on money
laundering trends, typologies and developments.


Organisational Set-up
FIU-IND is a multi disciplinary body headed by a Director. Personnel in this Unit are being
inducted from different organizations namely Central Board of Direct Taxes (CBDT), Central
Board of Excise and Customs (CBEC), Reserve Bank of India (RBI), Securities Exchange
Board of India (SEBI), Department of Legal Affairs and Intelligence agencies
.
Authorities at FIU-IND

According to Section 48 of the Prevention of Money Laundering Act, 2002
there shall be the following classes of authorities for the purposes of this Act, namely:-
(a) Director or Additional Director or Joint Director,
(b) Deputy Director,
(c) Assistant Director, and
(d) such other class of officers as may be appointed for the purposes of this Act
.
Appointment of Authorities

As per Section 49 of the Prevention of Money Laundering Act, 2002:
(1) The Central Government may appoint such persons as it thinks fit to be authorities for the
purposes of this Act.
(2) Without prejudice to the provisions of sub-section (1), the Central Government may
authorise the Director or an Additional Director or a Joint Director or a Deputy Director or an
Assistant Director appointed under that sub-section to appoint other authorities below the
rank of an Assistant Director.
(3) Subject to such conditions and limitations as the Central Government may impose, an
authority may exercise the powers and discharge the duties conferred or imposed on it under
this Act.


Director and officers subordinate to him deemed to be public servants


Section 40 of the Prevention of Money Laundering Act, 2002 declares the Chairperson,
Members and other officers and employees of the Appellate Tribunal, the Adjudicating
Authority, Director and the officers subordinate to him shall be deemed to be public servants
within the meaning of section 21 of the Indian Penal Code, 1860 (45 of 1860).


Powers of the Director
Section 13 of the Prevention of Money Laundering Act, 2002 confers following powers on
the Director to ensure compliance:
(1) The Director may, either of his own motion or on an application made by any authority,
officer or person, call for records referred to in sub-section (1) of section 12 and may make
such inquiry or cause such inquiry to be made, as he thinks fit.
(2) If the Director, in the course of any inquiry, finds that a banking company, financial
institution or an intermediary or any of its officers has failed to comply with the provisions
contained in section 12, then, without prejudice to any other action that may be taken under
any other provisions of this Act, he may, by an order, levy a fine on such banking company
or financial institution or intermediary which shall not be less than ten thousand rupees but
may extend to one lakh rupees for each failure.
(3) The Director shall forward a copy of the order passed under sub-section (2) to every
banking company, financial institution or intermediary or person who is a party to the
proceedings under that sub-section.

Powers of authorities regarding summons, production of documents and to give
evidence:
Section 50 of the Prevention of Money Laundering Act, 2002 confers following powers of
summons, production of documents and to give evidence etc.:
(1) The Director shall, for the purposes of section 13, have the same powers as are vested in a
civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect
of the following matters, namely:-
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any officer of a banking company,
financial institution or a company, and examining him on oath;
(c) compelling the production of records;
(d) receiving evidence on affidavits;
(e) issuing commissions for examination of witnesses and documents; and
(f) any other matter which may be prescribed
(2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director
shall have power to summon any person whose attendance he considers necessary whether to
give evidence or to produce any records during the course of any investigation or proceeding
under this Act.
(3) All the persons so summoned shall be bound to attend in person or through authorised
agents, as such officer may direct, and shall be bound to state the truth upon any subject
which they are examined or make statements, and produce such documents as may be

required.
(4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial
proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, 1860 (45 of
1860).
(5) Subject to any rules made in this behalf by the Central Government, any officer referred
to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit,
any records produced before him in any proceedings under this Act:
Provided that an Assistant Director or a Deputy Director shall not -
(a) impound any records without recording his reasons for so doing; or
(b) retain in his custody any such records for a period exceeding three months, without
obtaining the prior approval of the Director.
Assistance from other authorities for enforcement of the Act


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 empowered and
required to assist the authorities in the enforcement of this Act, namely:-
(a) officers of the Customs and Central Excise Departments;
(b) officers appointed under sub-section (1) of section 5 of the Narcotic Drugs and
Psychotropic Substances Act, 1985 (61 of 1985);
(c) income-tax authorities under sub-section (1) of section 117 of the Income-tax Act, 1961
(43 of 1961);
(d) officers of the stock exchange recognised under section 4 of the Securities Contracts
(Regulation) Act, 1956 (42 of 1956);
(e) 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);
(f) officers of Police;
(g) officers of enforcement appointed under sub-section (1) of section 36 of the Foreign
Exchange Management Act, 1973 (40 of 1999);
(h) 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);
(i) officers of any other body corporate constituted or established under a Central Act or a
State Act;
(j) 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.
Agreements with foreign countries
Section 56 of the Prevention of Money Laundering Act, 2002 provides for agreements with
foreign countries to facilitate exchange of information with them:
(1) The Central Government may enter into an agreement with the Government of any
country outside India for-
(a) enforcing the provisions of this Act;
(b) exchange of information for the prevention of any offence under this Act or under the
corresponding law in force in that country or investigation of cases relating to any offence
under this Act.
and may, by notification in the Official Gazette, make such provisions as may be necessary
for implementing the agreement.
(2) The Central Government may, by notification in the Official Gazette, direct that the
application of this Chapter in relation to a contracting State with which reciprocal
arrangements have been made, shall be subject to such conditions, exceptions or
qualifications as are specified in the said notification.
Disclosure of information
Section 66 of the Prevention of Money Laundering Act, 2002 provides for disclosure of
information to other officers, authority or body:
The Director or any other authority specified by him by a general or special order in this
behalf may furnish or cause to be furnished to-
(i) any officer, authority or body performing any functions under any law relating to
imposition of any tax, duty or cess or to dealings in foreign exchange, or prevention of illicit
traffic in the narcotic drugs and psychotropic substances under the Narcotic Drugs and
Psychotropic Substances Act, 1985 (61 of 1985); or
(ii) such other officer, authority or body performing functions under any other law as the
Central Government may, if in its opinion it is necessary so to do in the public interest,
specify by notification in the Official Gazette in this behalf, any information received or
obtained by such Director or any other authority, specified by him in the performance of
their functions under this Act, as may, in the opinion of the Director or the other authority so
specified by him, be necessary for the purpose of the officer, authority or body specified in
clause (i) or clause (ii) to perform his or its functions under that law.
Recovery of fines
Section 69 of the Prevention of Money Laundering Act, 2002 refers to recovery of fines.
Where any fine imposed on any person under section 13 or section 63 is not paid within six
months from the day of imposition of fine, the Director or any other officer authorised by him
in this behalf may proceed to recover the amount from the said person in the same manner as
prescribed in Schedule 11 of the Income-tax Act, 1961 (43 of 1961) for the recovery of
arrears and he or any officer authorised by him in this behalf shall have all the powers of the
Tax Recovery Officer mentioned in the said Schedule for the said purpose.
The new network, called FINnet (Financial Intelligence Network), is a technology-based
secure platform for bringing together investigative and enforcement agencies to collect,
analyse and disseminate valuable financial information for combating money laundering and
related crimes.

Restriction on Civil Court Jurisdiction

Section 41 of the Prevention of Money Laundering Act, 2002 says that no civil court shall
have jurisdiction to entertain any suit or proceeding in respect of any matter which the
Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this
Act to determine and no injunction shall be granted by any court or other authority in respect
of any action taken or to be taken in pursuance of any power conferred by or under this Act."
Appeal to Appellate Tribunal
Section 26 of the Prevention of Money Laundering Act, 2002 deals with appeal to Appellate
Tribunal.
(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an
order made by the Adjudicating Authority under this Act, may prefer an appeal to the
Appellate Tribunal.
(2) Any banking company, financial institution or intermediary aggrieved by any order of the
Director made under sub-section (2) of section 13, may prefer an appeal to the Appellate
Tribunal.
(3) Every appeal preferred under sub-section (1) or sub-section (2) shall be filed within a
period of forty-five days from the date on which a copy of the order made by the
Adjudicating Authority or Director is received and it shall be in such form and be
accompanied by such fee as may be prescribed:
Provided that the Appellate Tribunal may, after giving an opportunity of being heard,
entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that
there was sufficient cause for not filing it within that period.
(4) On receipt of an appeal under sub-section (1), or sub-section (2), the Appellate Tribunal
may, after giving the parties to the appeal an opportunity of being heard, pass such orders
thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.
(5) The Appellate Tribunal shall send a copy of every order made
Right of Appellant

Section 39 of the Prevention of Money Laundering Act, 2002 provides for the right of the
appellant.
(1) A person preferring an appeal to the Appellate Tribunal under this Act may either appear
in person or take the assistance of an authorised representative of his choice to present his
case before the Appellate Tribunal.
Explanation - For the purposes of this sub-section, the expression "authorized
representative" shall have the same meaning as assigned to it under sub-section (2) of
section 288 of the Income Tax Act, 1961.
(2) The Central Government or the Director may authorise one or more authorised
representatives or any of its officers to act as presenting officers and every person so
authorised may present the case with respect to any appeal before the Appellate Tribunal.
Appeal to High Court
Section 42 of the Prevention of Money Laundering Act, 2002 provides for appeal to High
Court:
“Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal
to the High Court within sixty days from the date of communication of the decision or order
of the Appellate Tribunal to him on any question of law or fact arising out of such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by
sufficient cause from filing the appeal within the said period, allow it to be filed within a
further period not exceeding sixty days.
Explanation.-For the purposes of this section, "High Court" means-
(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or

< carries on business or personally works for gain; and
(ii) where the Central Government is the aggrieved party, the High Court within the
jurisdiction of which the respondent, or in a case where there are more than one respondent,
any of the respondents, ordinarily resides or carries on business or personally works for gain.
Offences which can be seen by Special Courts
Section 44 of the Prevention of Money Laundering Act, 2002 provides for trial by Special
Courts:
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of
1974),-
a. the schedule offence and the offence punishable under section 4 shall be tried only by the
Special Court constituted for the area in which the offence has been committed;
Provided that the Special Court , trying a schedule offence before the commencement of this
Act, shall continue to try such scheduled offence, or
b. a Special Court may, upon a complaint made by an authority authorised in this behalf
under this Act take cognizance of the offence for which the accused is committed to it for
trial.
(2) Nothing contained in this section shall be deemed to affect the special powers of the
High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of
1974) and the High Court may exercise such powers including the power under clause (b)
of sub-section (1) of that section as if the reference to "Magistrate" in that section includes

also a reference to a "Special Court" designated under section 43.

KYC AML Terms

AML Anti-Money Laundering
BM Branch Manager
BDD Basic Due Diligence
CAP Customer Acceptance Program
CBI Central Bureau of Investigation
CBS Core Banking Solution
CCR Counterfeit Currency Report
CRCM Customer Risk Categorisation Model
CDD Customer Due Diligence
CIP Customer Identification Program
CRO Customer Relationship Officer
CTR Cash Transaction Report
DCCB District Central Cooperative Bank
EDD Enhanced Due Diligence
FATF Financial Action Task Force
FIU-IND Financial Intelligence Unit - India
HNI High Net Worth Individual
HUF Hindu Undivided Family
IBA Indian Banks’ Association
KYC Know Your Customer
ML Money Laundering
NRI Non-Resident Indian
PACS Primary Agricultural Cooperative Societies
PEP Politically Exposed Person
PIO Person of Indian Origin
PMLA Prevention of Money Laundering Act 2002
PMLR Prevention of Money Laundering Rules 2005
PO Principal Officer
RBI Reserve Bank of India
RRB Regional Rural Banks
NABARD National Bank for Agriculture and Rural Development
NAFSCOB National Federation of State Cooperative Banks
NRI Non Resident Indian
NSDL National Securities Depository Limited
NTR Non-Profit Organisation Transaction Reports
SA Staff Assistant
SCB State Cooperative Banks
SDD Simplified Due Diligence
STR Suspicious Transaction Report
UAPA Unlawful Activities Prevention Act
UN United Nations
UNSCR United Nation Security Council Resolution

Official valid documents full details along with RBI amended circuler number

The Reserve Bank of India (RBI) has made linking of national biometric ID Aadhaar to bank accounts mandatory as part of it's updated 'Know Your Customer (KYC)' guidelines.

This, however, will be subject to the final decision of the Supreme Court on making of Aadhaar mandatory, RBI said in a circular late last night.

Till now, an Officially Valid Document (OVD) for address proof together with Permanent Account Number (PAN) issued by the Income Tax department and a recent passport size photograph were the key KYC documents.

But in the amended Customer Due Diligence (CDD) procedure, RBI said, "The Aadhaar number, the PAN or Form No. 60" need to be obtained from an individual who is eligible for applying for the biometric ID.

Sources said that the move will facilitate a trusted environment for banking services.

The RBI has done away with sections relating to the use of other OVD by banks for address and identity proof.

For residents of Jammu and Kashmir, Assam or Meghalaya, who do not submit Aadhaar or proof of application of enrolment for Aadhaar, the bank may obtain a "certified copy of an OVD containing details of identity and address and one recent photograph," RBI said.

OVD means the passport, the driving licence, Voter's Identity Card issued by the Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, letter issued by the National Population Register containing details of name and address.

RBI said Aadhaar number shall not be sought from individuals who are not residents.

"From an individual who is not eligible to be enrolled for an Aadhaar number, or who is not a resident, the following shall be obtained: PAN or Form No. 60, one recent photograph and a certified copy of an OVD containing details of identity and address."

In case the OVD furnished by the customer does not contain updated address, utility bill of not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill), property or municipal tax receipt, pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, and letter of allotment of accommodation from employer issued by State Government or Central Government Departments may be considered, RBI said.

RBI said the KYC norms have been updated following the government's decision to update the 'Prevention of Money Laundering' (PML) rules in June 2017.

The government had last month extended the date for submission of Aadhaar details for existing bank account holders indefinitely.

A date would be notified after the final judgement in the petition challenging Aadhaar being heard before the Supreme Court, the government had said.

"The revised Master Direction is in accordance with the changes carried out in the PML Rules vide Gazette Notification GSR 538 (E) dated June 1, 2017, and thereafter and is subject to the final judgment of the Hon'ble Supreme Court," RBI said while updating its master direction on know your customer norms.

According to the Aadhaar Act, a person who is residing in India for more than 180 days is eligible for applying for an Aadhaar number.

Reference ::
http://www.newindianexpress.com/nation/2018/apr/21/aadhaar-seeding-must-for-bank-accounts-under-kyc-norms-rbi-1804588.html

RBI Master circular ::

https://m.rbi.org.in//Scripts/BS_ViewMasDirections.aspx?id=10292

Finally

OVDs::

There are only 5 OVDs as per latest RBI Circular.
1.Passport
2.Driving license.
3.NREGA Card.
4.Voter ID.
5. ID issued by population authority with photo and address.

However, Aadher and PAN or form 60. are Mandatory documents.

General banking bits

General banking  bits

1. A customer Mr Sharma had credit balance 40,000 in his saving ac and also had an OD ac with
overdue Debit balance of 20,000.Bank debits his saving account and adjusts OD ac. The bank is
said to have exercised Right of: Set-off
2. A Minor has extended Guarantee to a loan. It can be ratified by whom? It cannot be ratified by
any one.
3. A savings account becomes inoperative when it not operated for: 2 years
4. A term deposit of a HUF has become due. At the time of renewal, the Karta of HUF informs that
he has become Senior Citizen. What rate of interest will be given on term deposit? : Normal
interest rate. No benefit of senior citizen to be given
5. Additional interest is paid to senior citizens on which time FD: All fixed deposits (may vary from
bank to bank)
6. After Nomination in an account, what is the status of the nominee?: Trustee of legal heirs
7. An account of a customer can be closed in normal course on the request of the customer.
What are the other methods for closing account of a customer – (a) By negotiation; (b) As per
provisions of law; (c) After notice to customer in respect of undesirable accounts: Ans is C
8. An Illiterate person is generally not allowed to open which account – saving, term deposit,
recurring deposit, small account, Current Account: Current account.
9. As per RBI guidelines, Demand draft of Rs 50,000 and above should be issued against : by debit
to account but not against cash
10. As per RBI guidelines, minimum amount of deposit to open BSBDA account is: NIL
11. As per Sukanya Samridhi Account (SSA) the tenure of deposit is for years from the date of
opening of the account: 21 years
12. Bank is not required to produce original book of records but true copy can be submitted when
court has demanded as per which act? a) Civil procedure code b) Registration act c) B.R. Act d)
RBI act e) Banker Books Evidence Act.
13. Banker Customer relationship for deposits is ____: Debtor – Creditor.
14. Banker customer relationship in Safe Custody: Bailee Bailor.
15. Banker customer relationship in standing instruction: Agent – Principal
16. Bankers prefer Saving Deposits than Term deposits. Why?: Because cost of deposits for SB is
less.
17. Banks can decide interest rates of NRI, NRO or Term Deposits: Yes
18. Banks can raise what type of deposits?: Term and Demand Deposits
19. Banks should have the responsibility of currency management entrusted to a nodal official of the
rank not less than that of a General Manager and will be accountable for the obligations cast
upon currency chests by the Reserve Bank.
20. BC work as : Bank’s Agent
21. Business Correspondent can be identified by whom?: BDO,Post Master, Head of Village
Panchayat, other BC.
22. Business correspondents for banking for : serving weaker sections of society
23. Call money deposit is part of the sector : Organised sector
24. Complaints under Consumer forum should be dealt with within (Where no testing of commodities
is required) : 90 days.
25. Customer OD A/c has overdrawn Rs 2000/-. Saving A/c has balance Rs 3000. The bank adjusts
the OD A/c by which right: Set off.
26. DD of Rs.50000/- in cash : not allowed
27. Death claim settlement in how many days?: 15 days
28. Deposits held in Joint accounts; b) Corporate Deposits; c)
Inter-Bank deposit; d) Deposits of HUFs: Ans is Inter-Bank deposits.
29. Deposits which are not claimed for__years are required to be transferred by banks to
RBI: 10 years
30. DICGC cover is available in which of the following cases a) Credit balance in Cash Credit Account
b) Overdue Deposit c) Deposit of Government Department?: A & B
31. Differential rate of interest can be paid on fixed deposit if single deposit is for: Rs.1.00 crore
and above
32. Direct Tax Code will replace which of the following – Income Tax Act, Corporate Tax Act: Income
Tax Act.
33. Encashment of FOR with interest - payment can be made in cash if it is less than Rs 20000
34. Financial Inclusion means: providing banking services at affordable cost to the poor/distressed.
35. FULL FORM OF CASA? : CURRENT ACCOUNT & SAVING ACCOUNT
36. Garnishee order is not applicable to: a) Savings b) Current c) FD d) CC/OD with debit
balance: CC/OD with debit balance.
37. Govt. has decided to demonetize all the coins of paise 25 and below w.e.f. 30-6-2011.
38. How much amount can be deposited in a small account in a financial year?: Rs one lac
39. How much amount can be withdrawn from a small account in a month?: Rs 10,000
40. If in Garnishee Order no amount is mentioned, what should the bank do? Full amount to be
attached.
41. If payment of Rs 20000/- is made in cash in case of FDR what is the penalty: equal to the
amount paid
42. Illiterate account holder, how many witness for nomination: two
43. In Basic Savings Bank Deposit Account in all their accounts taken together and the total credit in
all the accounts taken together is not expected to exceed _____ in a year has been simplified to
enable those belonging to low income groups without documents of identity and proof of
residence to open banks accounts: 1,00,000/-.
44. In case Fixed Deposits account the rate of interest fixed by whom: Board of Directors of
respective bank.
45. In case of a/c transfer, with in how many days the address proof has to be submitted in the
transferee branch? Six Months
46. In case of an illiterate customer, process of nomination requires witnesses by how many
persons?: Thumb impression requires 2 witnesses.
47. In case of Deposit Insurance whether it mandatory or not: It is Mandatory for all banks.
48. In case of Deposit Insurance, Insurance premium is paid to DICGC by bank and depositor in
which ratio?: Entirely by bank.
49. In case of insurance of deposits by DICGC, premium is paid by: Bank. 100% of the premium
is paid by the bank and not by depositor.
50. In case of insurance of deposits by DICGC, what is the premium sharing ratio between bank and
depositor?: 100% of insurance premium is paid by the bank.
51. In case of Minor what is wrong? Minor can make himself liable for his actions.
52. IN CASE OF TRANSFER OF ACCOUNT, WITHIN HOW MANY DAYS, THE ACCOUNT HOLDER
SHOULD ADVISE NEW ADDRESS?: TWO WEEKS
53. In how many years of no transaction does a saving and current account become inoperative? :
two years
54. In Limited liability Partnership what is the liability of partner?: Amount agreed to be
contributed by partner at the time of joining partnership.
55. In saving accounts, interest is calculated on the basis of: daily product basis.
56. In Senior Citizen Saving Scheme account, who can be joint account holder?:Spouse

57. In small accounts as per RBI- No min. balance, nil/minimal charges etc
58. In small accounts monthly withdrawals to be upto- Rs.10000/-
59. Insurance of deposit is done by DICGC up to: Rs 1 lac per depositor per bank.
60. Interest rate on Saving Deposit is decided by : Banks individually
61. Interest rate on Savings accounts: Not regulated by RBI
62. Max amt for tax saver FD: Rs 150000
63. Maximum amount of deposit in Tax Saving Scheme of the bank can be: Rs 1,50,000
64. Maximum deposit for allocating a locker: 3 year advance rent plus locker breaking charges
65. Maximum period of NRE deposit: Bank Discretion.
66. Minimum and Maximum amount that can be deposited in PPF account is _____: Minimum Rs.
500/- & Maximum Rs. 1.50 lacs.
67. Minimum Lock in period for Tax saver FDR: 5 Years
68. Minimum Maturity Period for Certificate of Deposit is : 7 days
69. Missing person treated as having expired if missing for: 7 years
70. No Frills Accounts are opened for: Financial Inclusion
71. No of digits in Aadhar : 12
72. Non Resident (External) fixed deposit is normally accepted for a period of (a) 1 year to 3 year
(b) 1year to 5 year (c) 1 year to 4 year (d) 1 year to 7 year (e) 6 months to 3 year: 1 year to 3
year (As per RBI it is minimum 1 year and maximum bank discretion)
73. OD in PMJDY account upto: Rs. 5,000/-.
74. On a cheque presented for payment, amount is written in words but all other items are written in
Regional Language. What should the bank do?: Pay the cheque
75. Pensioner account can be opened jointly with? Spouse as Either of Survivor or Former or
Survivor.
76. Rate of Interest in Sukanya Samridhi Account for 2015-16: 9.20% & 8.6% FOR 2016-17
77. Relation between bank and judgment debtor: debtor & creditor.
78. Safe custody of Articles comes under which Act: Indian Contract Act.
79. Star series note can be issued in denomination of Rs 100 also. (earlier only Rs 10, 20 & 50)
80. Super senior citizen after: 80 years of age
81. The balance in the account is Rs 15000. A cheque of Rs 30000 was sent for collection. Before it
is realized a cheque for Rs 20000 has been presented for payment. What should the bank do –
(a) Return with reason effects not yet cleared. Present again; (b) Pay the cheque; (c) Return
with reason exceeds arrangement; (d) Return with reason Refer to Drawer; (e) Return with
reason Insufficient Funds: Insufficient Funds
82. The minimum & maximum period of certificate of deposit is : 7 days, 12 months
83. There is a credit balance in the saving account and there is a overdraft in the current account
amounting to Rs 555. Both accounts are in the same name. Bank wants to adjust credit balance
of saving bank account towards payment of overdraft. As per which right, bank can do this?:
Right of Set Off.
84. Under Sukanya Samridhi Account (SSA) the maximum period upto which the deposits can be
made is for ___ years from the date of opening of the account: 14 years
85. Under Sukanya Samridhi Account (SSA) the minimum amount of deposit is Rs 1,000 and Under
Sukanya Samridhi Account (SSA), the bank account will be opened for a girl child upto the age
of: 10 years
86. Under Sukanya Samridhi Account (SSA), the current rate of interest on deposits is which is the
highest amongst all other Govt. Saving Schemes: 9.20% & 8.6% FOR 2016-17
87. What are the Service charges for using ATMs of other banks for balance enquiries: Rs.20 for
Financial & Rs. 10 for Non- Financial upto 5 transactions ( 3 at Metros)
88. What documents are required for opening a small account?: Self attested photo and address
89. What is the bankers-customer relationship in case of deposits? Debtor – Creditor
90. What is the distance criteria for office of Business Correspondent?: The distance between the
place of business of a retail outlet/sub-agent of BC and the base branch should ordinarily not
exceed 30 kms in rural, semi-urban and urban areas and 5 kms in metropolitan centers.
91. What is the maximum amount of loan that can be granted against FCNR deposit? No limit.
92. What is the periodicity of review of risk classification of customers?: Every six months
93. What is the rate of interest payable on an overdue FD for overdue period if customer demands
payment and does not renew the same?: Saving Bank Rate
94. What is the special feature of Basic banking Account? Account can be opened with nil or very
small amount and there are no requirement of minimum balance.
95. What type of account can be opened in the name of NRI jointly with residents? NRO /NRE/FCNR

(earlier only NRO)
96. What type of activity can be performed by Business Correspondent - (a) processing and
submission of applications to banks; (b) disbursal of small value credit, (c) recovery of principal /
collection of interest (iv) collection of small value deposits: All of these
97. When a person wants to open an account with a bank but does not have proof of identification
and address, what type of account can be opened?: Small account
98. When Letter of Administration issued: When the person dies without leaving the Will- Intestate.
99. Whether “WILL” has to be registered? Not required.
100. Which form is used for cancellation of nomination in deposit accounts?: DA -2
101. Which is not a proof of Identity?: Ration card.
102. Which is the most important document for opening a Trust Account?: Trust Deed
103. Which of the following forms will be used for allowing exemption to a depositor aged 61 years
: Form 15 H
104. Which of these rates are periodically reviewed by RBI?: Repo rate, Bank rate, but not Savings
Bank Rate.
105. While opening account, a bank, in addition to observing various provisions of Indian Contract
Act should also – exercise utmost care and attention; look at profitability from account; exercise
due diligence: Due diligence
106. While opening the account with a bank, prospective customer is required to submit – PAN No
or Form 60 or 61
107. Who are eligible for preferential rate of interest under NRE deposits: a) Staff b) Senior citizen
c) Staff cum Senior Citizen d) none of these?: None of these
108. Who can do nomination in the account of a Minor?: Can be done by guardian not by
minor
109. Who of the following can exercise nomination – HUF, limited company, trust, Partnership firm,
sole proprietorship firm?: Sole Proprietorship firm.

Partnership,Companies TDS related bits

Partnership
1. A document was executed by three partners in different dates. When shall the limitation period
start?: The limitation period will start from the last date i.e. when the document was executed by
the last partner
2. A minor who was admitted to the benefits of partnership has become major. Within how much
period, he has to decide to remain partner in the firm or not?: within 6 months of attaining
majority or 6 months of knowing that he is the partner in the firm whichever is later.
3. A partnership firm conducting business other than the banking business has more than 100
members as partners. Whether this is allowed?: Such association is called illegal association as
per Companies Act
4. Account payee crossing defined in:-Not defined any where
5. HUF cannot be partner in a Partnership firm: HUF does not have any legal entity.
6. Implied authority of a partner does not allow ______ singly? Settle a dispute relating to thebusiness of the firm thru arbitration.
7. In Limited Liability Partnership account, who are not eligible for becoming partners: a) HUF b)
Minor c) body corporate?: Ans: a & b
8. Outstanding in a CC account is Rs.2.00 lakhs. One of the partner died and the operations were
continued in the account by the bank inspite of notice of the death given to the bank. Later
2.50 lakh deposited and 1 lakh was withdrawn? What is liability of legal heirs of the deceased
partner: NIL as per Claytons rule.
9. Position of minor on attaining the majority: He has to give public notice within 6 months on
attaining majority as to whether he wants to become partner or not. If he remains silent it is
presumed that he has accepted to become the partner and he will be liable for all transactions
since he was admitted for the benefit of the partnership firms.
10. Reasons for avoiding advance to Un-Registered Partnership Firm: Firm can not sue against
anyone for recovery of its debts but anyone can sue against the firm.
11. The consequence of non registration of Partnership - firm cannot sue others for its dues.
12. The liabilities of partners in Partnership is: Joint and several
13. Who can not be full fledged partner: Minor
14. Who cannot become a partner in a firm as per supreme court judgment HUF




firm as per supreme court judgment HUF
Companies
1. A bank cannot acquire either as owner or as pledgee shares in a company more than:. 10 % of
paid capital of the company or 10% of the•paid up capital and reserves of the bank, whichever is
lower.
2. A limited company has registered office at Chennai whereas loan has been raised from bank
branch at Mumbai. The charge will be registered with the ROC at: Chennai
3. A private limited company with Registered office at Bangalore has raised loan from a branch
located at Mumbai. For creating equitable mortgage, title deeds can be deposited at: Mumbai,
Kolkatta, Chennal or any other notified place.
4. Board of Directors want to borrow money in excess of paid up capital and reserves of the
company: can be done through a resolution passed by shareholders in the general meeting
5. CIN in case of a company indicates: Corporate Identity Number.
6. Company is in liquidation, funds are at the disposal of : Liquidator
7. For formation of a company, Registrar of Companies will issue : certificate of incorporation
8. In the case of IPO, the company is required to allot shares or make refund within: 30 days of the
closure of the issue in case of fixed price public issues; 15 days in case of book built issues and
15 days in case of right issues
9. Objectives for which a company has been formed are given in: Memorandum of Association
10. On repayment of_debt of a company, satisfaction of charge shbuld be filed with ROC within: 30
days
11. The Articles of Association mention that the minimum quorum for passing a resolution is 5
directors. However a resolution is received which was signed by four directors only with a
request to open the current account: All the 5 Directors should sign the resolution for opening
of the account
12. The legal liability to file charges with ROC in case of lending to a Company is that of ______:
Borrowing Company
13. What is the Doctrine of Ultra Vires in the context of a limited company?: Any act by the directors
beyond the object of the company is considered ultra vires the company and company is not
bound by such act.
14.When a company is financed against the security of hypothecation or mortgage of its movable
property, the company is required to file particulars of charge with: Registrar of Companies
RTI
1. As per Right to Information Act (RTI), in how much time the information is to be provided to the
person seeking the information: 30 days.
2. In case of RTI, information related to life and liberty has to be provided within: 48 hrs.
3. While disposing-off the request under RTI Act, PIO is required to mention clearly the time limit of
_____ and address of the Appellate Authority to the complainant: 30 days.
TRUST
1. 1. You are maintaining current account in the name of the Trust. You receive notice of death of
one of the trustees. After this notice, a cheque signed by the deceased trustee is presented for
payment. What should the bank do?: Cheque may be paid, if otherwise in order.
2. A Trust Deed is silent about loans by the trust. The trustee approaches for a loan. Under these
circumstances what should the bank do?: No loan can be raised
1. E TDS - 26Q (tax deduction other salaries) to be filed for the month of September, before: 15th
October (Statement of TDS to be submitted within 15 days from close of quarter)
2. In case of payment of rent on property, tax is deducted at source when the payment of rent is
likely to be more than Rs 180,000 per annum. The rate of TDS in case of rent payable to an
individual or HUF is: 10%
3. In which type of fixed Deposits Account TDS not deducted: NRE and FCNR(B) only.
4. Penalty for non submission e-TDS : Rs. 200 per day
5. Quarterly statement for TDS on salary should be submitted on form 24-Q within: 15days of the
close of the quarter
6. Tax is not deducted at source in respect of which of the following income – (a) Interest on Bank
deposits (b) Rent on land and building (c) Brokerage (d) Dividend paid by listed company:
Dividend paid by listed company (However Dividend u/s 2(22)(e) is taxable for shareholder and
thus TDS rate on such dividend is 10%
7. TDS collected to be deposited with the Income Tax Deptt within: 7th day of succeeding month
during which it is collected.
8. TDS deducted for interest amt: above Rs 10,000/-.
9. TDS deduction on interest more than 20,000/- under IT Act : Sec. 194A
10. TDS not deposited in time. What is the interest payable?: _Bank to pay the amount with interest
© 1.5% per month simple.
11. A customer aged 66 years has a term deposit in your branch. He does not want the TDS to be
deducted, which declaration form will you ask him to submit: 15-H
12. Citizen below 60yrs is required to fill which forms for non deduction of tax at source in case
interest credited or likely to be credited on FD in a financial year is more than Rs 10,000 –
15G/15H/Form 60/Form 61: 15G

QUESTION BANK ON DEPOSITS & MISC.

1) To open account for close relatives of low risk customers e.g. wife, son, daughter and parents etc.
who live with their husband, father / mother and son respectively, the _____ bills which are in the
name of close relatives can be accepted: (Utility)
2) For risk categorization of customers, the IBA has provided a _____ model containing several
parameters: (Hybrid)
3) Several parameters under risk categorization matrix on which accounts are being rated are
Customer Type, Customer Profession, Type of Business, Product Code, Account Status, Account
Vintage and ____: (Balance)
4) All customer profiles/accounts of NRIs, HNIs, PEPs, NGOs, Trusts, Co-operative Societies, HUF,
Exporters, Importers and Accounts having Beneficial Owners are to be invariably categorized as
_____: (High Risk)
5) Branches should categorize _____ and unclaimed deposits as High Risk at the time of blocking the
account itself: (Blocked accounts)
6) Accounts of dealers in Jewellery, gold/silver/billions, diamonds and other precious metals/stones
are to be categorized under ____: (High Risk)
7) Under vintage parameter, newly opened CASA accounts which have not completed ____ months
are to be classified as High Risk except Staff, ex-staff, Pensioners, Small accounts, financial
inclusion and Basic savings bank accounts: (6)
8) Penalty of not less than _____ extended upto one lakh rupees may be levied by RBI on any of the
employees for non-compliance of KYC/AML/CFT guidelines: (Rupees ten thousand)
9) Transactions using forged or counterfeit Indian Currency notes are to be reported under _____:
(Counterfeit Currency Report (CCR)).
10) Attempted transactions by customers are to be reported under _____ even if the transactions are
not completed by customers irrespective of the amount: (Suspicious Transactions Report
(STR)
11) Records of transactions to be maintained for at least ten years from _____, instead of ten years
from the date of cessation of transactions, and records pertaining to identification of the customer
and his address to be preserved for at least ten years after the business relationship are ended:
(The date of transaction)
12) Accounts of Trusts/Charities/Organizations, receiving foreign funding should be opened after
permission of Ministry of Home Affairs. Such accounts are treated as ____: (High Risk)
13) In case of High Net Worth Individuals the Average balance is maintained in SB/NRE SB is ____:
(Rs.2.00 lakh and above)
14) In case of High Net Worth Individuals the balance should be maintained in Term Deposit,
Domestic/NR is ____: (Rs.10.00 lakh and above)
15) In case of High Worth Net Individuals the balance of _____ and above should be maintained in
CA: (Rs.5.00 lakh)
16) Individuals enjoying fund based limits/term loans exceeding ____ are considered High Net worth
Individuals.(Rs.30.00 lakh)
17) Individuals with Salary credit of _____and above in a Super saving salary A/c are categorized as
HNI’s. (Rs.25,000/-)
Limited Liability Partnership
1) LLP is a ___ corporate form entity, combining the features of existing partnership firms and
limited liability companies: (Hybrid)
2) LLP is a body corporate & ____ entity separate from its partners: (Legal)
3) ____ or more persons can form a LLP whereas there is no upper limit on the number of partners
in an LLP. (Two)
4) _____and ____ cannot become a partner in LLP: (HUF, Minor)
5) LLP needs to be registered with . (Registrar of Companies)
6) The authorized signatories in LLP are called as ____: (Designated Partners)
7) In case where one or more partners are Body Corporate/Ltd Company , they should be
represented by their authorized signatory backed by ________of respective companies, certified
copy of which should be submitted to the bank. (resolution)
8) LLP cannot be converted into ______: (Company or Partnership firm)
9) A Private Company and an Unlisted Public Company can be converted into an LLP as per the
provisions of ___ Act: (LLP Act)
10) A partnership firm may be converted into an LLP in accordance with the provisions of the ___
schedule of LLP Act. (Second)
11) In case of credit facilities extended to LLP’s, the guarantee agreement shall contain a clause to the
effect that guarantee will continue notwithstanding the number of partners falling below ___.
(Two)
12) In case of change in constitutionof LLP due to Retirement/Death/Insolvency/Insanity of partners
, an LLP with more than ___ partners will continue to exist. (Two)
MISC
13) An NBFC-MFI is a non-deposit taking NBFC (other than a company licensed under Section 25 of
the Indian Companies Act, 1956) in which minimum net owned funds shall be _____ ` and not
less than 85% of its net assets shall be in the nature of Qualifying assets: (5 Crores)
14) For NBFC-MFIs registered in the North Eastern Region of the country, the minimum NOF
requirement shall stand at ____: (2 crore)
15) _____ are defined as total assets other than cash and bank balances and money market
instruments: (Net Assets)
16) Bank to obtain 10% of the limit as collateral security by way of Bank deposits for loans more
than ____ to NGO-mFIs/NBFC-mFIs: (Rs.1 crore)
17) The maximum amount of Housing finance to members of SHGs is Rs ___ per member:
(Rs.75000)
18) As per Damodaran Committee recommendation, there should be a ____________________ for
grievance redressal in every branch. (Chief Customer Service Officer CCSO).
19) The aggrieved party can approach CCSO if his complaint issue remains unresolved even after ___
month of filing complaint. (One)

20) The CCSO will resolve the grievances with in ___ days. (30)
21) The internal Ombudsman is retired ________ from other bank who has a vast experience in the
operations of the Banking Industry. (Chief General Manager)
22) Standing Committee on Customer Services is recommended by ______
and may be chaired by CMD orED and including non officials as its
members. (CPPAPS-Committee on Procedures and Performance Audit of Public Services).
23) Branch level Customer Service Committee should include customers especially ____. (Senior
Citizens)
24) Branch Level Committee should submit ____ reports to standing Committee on Customer Service.
(quarterly)
25) The CCSO will resolve the internal banking grievances within ____ days: (30)
26) As per RBI guidelines, banks are required to put in place various policies for customer service
which include Comprehensive Deposit Policy, ______ Collection Policy,______ Compensation
Policy and Grievances Redressal Policy. (Cheque;Customer)
27) Govt. of India has accepted ___________ as National Calender with effect from 22-03-1957. An
instrument written in Hindi having date as per Saka Samvat calendar is a valid instrument. (SAKA
SAMVAT)
28) With respect to Payment of Interest on Fixed Deposits If deposit is less than ____ months,
interest should be paid for the actual number of days, reckoning the year as 365 days: (3
months)
29) An account holder already enjoying credit facilities with any bank is not permitted by RBI to open
current account in some other bank and _____ is required from the existing bank for opening
current account in any other bank: (NOC)
30) In case of encashment of draft, Banks can permit encashment of drafts upto Rs _____ on the
basis of passport and postal identification. (25,000)
31) Banks should make atleast ____ of new ATM s installed as TALKING ATMs with Braille Key Pads:
(1/3rd)
32) Duplicate Draft in lieu of lost draft upto and including ____ may be issued without seeking non
payment advice: (5000)
33) Time frame for collection of cheques drawn on State Capitals/Major Cities / Other locations is to
be ____days respectively. (7/10/14)
34) Payment for interest for delays in Bills is ________(SB rate + 2%)
35) As per the recommendations of Goiporia committee the dishonoured Cheque is to be returned
within ___ hours. (24)
36) If instruments are lost in transit/Clearing by the Paying Banker, the onus
of such loass lies with the collecting banker and not the .
(Account Holder)
37) Where Lockers have remained un-operated for more than ____ years for medium risk customers
and ____ year for high risk customer, banks should contact the customer and advise him to
operate or surrender the locker, even if rent is paid regularly: (3,1)
38) With regard to guidelines for payment for interest for delays in bills, Time Limit for settlement of
Death Claim is not to be more than ___days. (15)
39) Banks should issue duplicate drafts within a _____ from the receipt of request. (Fortnight)

KYC AML RECOLLECTED

KYC AML 1. Cash receipt or cash payment of more than Rs 10 lakh are reported to FIU on CTR statement which should be sent to FIU within _____ from the close of the month: 15 days. 2. Suspicious Transaction report is sent to FIU within: 7 days from confirmation of suspicion. 3. In case of transactions carried out by a non-account based customer, that is a walk-in customer, where the amount of transaction is equal to or exceeds rupees whether conducted as a single transaction or several transactions that appear to be connected, the customer's identity and address should be verified: fifty thousand 4. As per KYC norms, banks are required to periodical update data. In respect of High risk customers, full KYC exercise will be required to be done at least every: two years 5. As per KYC norms, for how much period banks are required to preserve records in respect of photograph and proof of address or identity?: 5 years from date of close of account 6. As per KYC norms, in the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within: two weeks of such a change 7. As per KYC norms, risk classification of customers should be reviewed in every: 6 Months 8. Banks are required to FIU, cash transactions which are integrally connected to each other and total amount of receipt or total amount of payment in a month is more than: Rs 10 lac 9. Cash Transaction Report (CTR) in respect of cash receipt or cash payment of more than Rs 10 lac is to be sent to Director – FIU. What is the periodicity of the report – Fortnightly, Monthly, Quarterly, half yearly: Monthly, within 15 days of the close of the month. 10. FIR to be filed if number of Counterfeit notes in a single deposit is: 5 or above 11. If a customer does not comply with KYC requirements despite repeated reminders by banks, banks should impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts after ____ months notice followed by a reminder for further period of ____months. If the accounts are still KYC non-compliant after _____months of imposing initial ‘partial freezing’ banks may disallow all debits and credits from/to the accounts, rendering them inoperative: 3, 3, 6 months. 12. In a cash deposit made by a customer, one piece of counterfeit note is detected. What should the bank do - (i) It should be impounded and acknowledgement to be issued(ii) Should be destroyed (iii) Should be returned back: It should be impounded and acknowledgement to be issued to depositor signed by cashier. 13. In case of counterfeit notes received in a deposit by a person with bank, FIR is not lodged and only a monthly consolidated report is sent if counterfeit notes in one remittance is up to: 4 14. In case of Non-KYC compliant customer, after how much time notice, account should be freezed?: 3 months notice 15. In respect of Low Risk customers, KYC norms relating to obtaining photograph and proof of address and ID should be applied once in: 10 Years 16. In respect of Medium Risk customers, KYC norms relating to obtaining photograph and proof of address and ID should be applied once in: 8 Years 17. Process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean") is called: Money Laundering 18. RBI has allowed banks to accept at least _____ of the documents prescribed by RBI as activity proof by a proprietary concern, for opening a bank account in respect of a sole proprietary firm: One 19. What is the Risk category of Trust account High/Low/medium risk?: High Risk 20. When in case of deposit of cash over counter, two counterfeit notes are detected by bank, what should the bank do – (a) To be returned to customer, (b) impounded immediately, (c) call the police, (d) destroy it: impound immediately and issue acknowledgement to tender signed by the cashier 21. While opening bank account, as per KYC norms, what another document is taken by bank in addition to proof of ID?: proof of address ( Both can be same also) 22. Relaxation in KYC norms is permitted if the depositor undertakes that the balance outstanding in his account will not be more than and credits in a financial year will not exceed . Rs 50,000; Rs 100,000 23. Why KYC guidelines have been issued by RBI under section 35 A of the Banking Regulation Act: To prevent Money Laundering - 24. The terms used for hiding money to avoid tax is : Money laundering 25. Money laundering: conversion of illegal money into legal through banking channels. 26. For the purpose of KYC rules any addition & modification on which recommendation: Financial Action Task Force 27. Risk type for customer having political exposed person: High Risk 28. As per KYC Guidelines, Records of transactions to be maintained for at least ten years from the dateof transaction, instead of _________from the date of cessation of transactions, and records pertaining to identification of the customer and his address to be preserved for at least ten years after the business relationship is ended: ten years 29. A customer who does not complete all KYC norms, what type of account is opened for him? No Frill account in which cannot be more than Rs.50000 and credits in the Financial Year cannot be more than Rs.100000. 30. There were three cash withdrawals of Rs 5.80 lac ,Rs 4.90 lac & 0.25 lacs from an account in a month. Which of these transactions is/are will be reported to Financial Intelligence Unit as part of CTR? Cash withdrawals of Rs 5.8 lac and Rs 4.9 lac. 31. Under Prevention of Money Laundering Act, banks are required to preserve records relating to opening the account for how much period?: 10 years from date of closure of account. 32. Which of the following is not the key element of KYC policy a) Customer Acceptance Policy; b) Customer Identification Procedures; c) Monitoring of Transactions; d) Risk Management e) Customer Awareness Policy: Ans is E i.e. Customer Awareness Policy. 33. On whose recommendations, KYC norms came into force? (a) Goiporia Committee (b) Ghosh Committee (c) FATF: Ans is FATF 34. Under KYC Norms, Documents relating to opening the account like proof of address and identity and photograph should be taken again at what interval? (a) once in 10 years for low risk customer (b) once in 8 years for medium risk customers (c) once in 1 year for high risk customers (d) Both (a) and (b): Ans is (d) 35. Record of cash receipt and payment under KYC to be maintained if cash receipt or payment in a single day from one account is more than Rs 10 lakh. 36. For Low Risk customers, periodical up-dation of KYC data: Once in 10 years.

CENTRAL KYC RECORDS REGISTRY (CKYCR) TEMPLATE FOR KYC & REPORTING REQUIREMENTS UNDER FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)/ COMMONREPORTING STANDARDS (CRS)

OPERATIONALISATION OF CENTRAL KYC REGISTRY (CKYCR) AND KYC NORMS FOR FOREIGN
PORTFOLIO INVESTORS (FPIS)
RBI has made (July 8, 2016) the following amendments in KYC directions:
1. Customer Due Diligence Procedure and sharing KYC information with Central KYC Records Registry
(CKYCR): Regulated Entities shall capture the KYC information for sharing with the CKYCR, as required by
the revised KYC templates prepared for ‘individuals’ and ‘Legal Entities’ as the case may be. Government of
India has authorised the Central Registry of Securitisation Asset Reconstruction and Security Interest of India
(CERSAI), to act as, and to perform the functions of the CKYCR vide notification dated November 26, 2015.
The ‘live run’ of the CKYCR would start with effect from July 15, 2016 in phased manner beginning with new
‘individual accounts’. Accordingly, REs shall take the following steps:
1. In the first phase, Scheduled Commercial Banks (SCBs) may upload the KYC data with CERSAI, in
respect of new individual accounts opened on or after July 15, 2016.
2. REs other than SCBs may also participate in the live run of CKYCR from July 15, 2016.
3. Those REs which are not yet ready to join CKYCR
process immediately, shall take steps to prepare their systems for uploading the KYC data in respect of
new individual accounts so that the same is complete as soon as possible in a time bound manner.
4. REs shall prepare a plan for uploading the data in respect of existing individual accounts and include
the same in their KYC Policy.
5. Operational Guidelines (version 1.1) for uploading the KYC data have been released by CERSAI.
Further, ‘Test Environment’ has also been made available by CERSAI for the use of REs.
(b) KYC documents for eligible Foreign Portfolio Investors under Portfolio Investment Scheme PIs under
PIS have been revised
CENTRAL KYC RECORDS REGISTRY (CKYCR) TEMPLATE FOR KYC & REPORTING
REQUIREMENTS UNDER FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)/ COMMON REPORTING STANDARDS (CRS) As per notification dated July 7, 2015, Government has amended the
Prevention of Money Laundering (Maintenance of Records) Rules, 2005, (Rules), for setting up of the
Central KYC Records Registry (CKYCR). The proposed CKYCR would receive, store, safeguard and
retrieve the KYC records in digital form of a client. The KYC records received and stored by the CKYCR
could be retrieved online by any reporting entity across the financial sector for the purpose of establishing
an account based relationship. In order to facilitate collating and reporting the KYC data to the proposed
CKYCR, templates have been finalised in consultation with other regulators and CBDT (separate for
individuals and legal entity). RBI has advised banks (November 26, 2015) to be in readiness to share the
KYC data with the CKYCR once the CKYCR is notified by the Government. In case of opening of 'Small
Accounts', only personal details together with the photograph, signature/thumb impression and selfcertification
document should be obtained. Salient excerpts from the Govt notification are given below:
1. "Central KYC Records Registry" means a reporting entity, substantially owned and controlled by the
Central Government, and authorised by that Government through a notification in the Official Gazette to
receive, store, safeguard and retrieve the KYC records in digital form of a client.
2. "Know Your Client (KYC) Identifier" means the unique number or code assigned to a client by the
Central KYC Records Registry;
3. "Know Your Client (KYC) records" means the records, including the electronic records, relied upon by a
reporting entity in carrying out client due diligence.
4. "last KYC verification or updation" means the last transaction made by a reporting entity in the Central
KYC Records Registry by which the KYC records of a client were recorded, changed or updated by a
reporting entity;'
5. Officially valid document means and includes the letter issued by the Unique Identification Authority of
India or National Population Register containing details of name, address.
6. Every reporting entity shall within three days after the commencement of an account-based relationship
with a client, file the electronic copy of the client's KYC records with the Central KYC Records Registry.
The Central KYC Records Registry shall process the KYC records received from a reporting entity for deduplicating
and issue a KYC Identifier for each client to the reporting entity, which shall communicate the
KYC Identifier in writing to their client.
7. Where a client, submits a KYC Identifier to a reporting entity, then such reporting entity shall retrieve
the KYC records online from the Central KYC Records Registry by using the KYC Identifier and shall not
require a client to submit the same KYC records or information or any other additional identification
documents or details, unless — (i) there is a change in the information of the client as existing in the
records of Central KYC Records Registry; (ii) the current address of the client is required to be verified;
(iii) the reporting entity considers it necessary in order to verify the identity or address of the client, or to
perform
enhanced due diligence or to build an appropriate risk profile of the client. A reporting entity after obtaining
additional or updated information from a client as above shall as soon as possible furnish the updated
information to the Central KYC Records Registry which shall update the existing KYC records of the client
and the Central KYC Records Registry shall thereafter inform electronically all reporting entities who have
dealt with the concerned client regarding updatation of KYC record of the said client. The reporting entity
which performed the last KYC verification or sent updated information in respect of a client shall be
responsible for verifying the authenticity of the identity or address of the client.
8. A reporting entity shall not use the KYC records of a client obtained from the Central KYC Records
Registry for purposes other than verifying the identity or address of the client and shall not transfer KYC
records or any information contained therein to any third party unless authorized to do so by the client or
by the Regulator or by the Director;
9. Every reporting entity shall at the time of commencement of an account-based relationship identify its
clients, verify their identity, obtain information on the purpose and intended nature of the business
relationship. A reporting entity may rely on a third party subject to the conditions that the reporting entity,
within two days, obtains from the third party or from the Central KYC Records Registry records or the
information of the client due diligence carried out by the third party.
10. Functions and obligations of the Central KYC Records Registry:
(a) shall be responsible for storing, safeguarding and retrieving the KYC records and making such records
available online to reporting entities or Director;
(b) shall take all precautions necessary to ensure that the electronic copies of KYC records are not lost,
destroyed or tampered with and that sufficient back up of electronic records are available at all times at an
alternative safe and secure place;
(c) shall provide information only to the reporting entities which are registered with it on payment of fees
as specified by the Regulator;
11. Every reporting entity shall maintain the physical copy of records of the identity of its clients after
filing the electronic copy of such records with the Central KYC Records Registry.
12. Clarification / Guidelines on filling 'Personal Details' section in templates: Name should be stated with
Prefix (Mr/Mrs/Ms/Dr/etc.). The name should match the name as mentioned in the Proof of Identity
submitted failing which the application is liable to be rejected. Either father's name or spouse's name is to
be mandatorily furnished. In case PAN is not available father's name is mandatory.
13. Clarification / Guidelines on filling 'Proof of Identity [Poll' section: If driving license number or
passport is provided as proof of identity then expiry date is to be mandatorily furnished. Mention
identification / reference number if 'Z- Others (any document notified by the central government)' is
ticked.