The risk to the customer shall be assigned on the following basis:
i. Low Risk (Level I):
Individuals (other than High Net Worth) and entities whose identities and sources of wealth can
be easily identified and transactions in whose accounts by and large conform to the known profile
may be categorized as low risk. The illustrative examples of low risk customers could be salaried
employees whose salary structures are well defined, people belonging to lower economic strata of
the society whose accounts show small balances and low turnover, Government Departments andGovernment owned companies, regulators and statutory bodies etc. In such cases, only the basic
requirements of verifying the identity and location of the customer shall be met.
ii. Medium Risk (Level II):
Customers that are likely to pose a higher than average risk to the bank may be categorized as
medium or high risk depending on customer’s background, nature and location of activity, country
of origin, sources of funds and his client profile etc; such as:
a) Persons in business/industry or trading activity where the area of his residence or place of
business has a scope or history of unlawful trading/business activity.
b) Where the client profile of the person/s opening the account, according to the perception of
the branch is uncertain and/or doubtful/dubious.
iii. High Risk (Level III):
The branches may apply enhanced due diligence measures based on the risk assessment, thereby
requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the
sources of funds are not clear. The examples of customers requiring higher due diligence may
include
a) Non Resident Customers,
b) High Net worth individuals
c) Trusts, charities, NGOs and organizations receiving donations,
d) Companies having close family shareholding or beneficial ownership
e) Firms with ‘sleeping partners’
f) Politically Exposed Persons (PEPs) of foreign origin
g) Non-face to face customers, and
h) Those with dubious reputation as per public information available, etc.
i. Low Risk (Level I):
Individuals (other than High Net Worth) and entities whose identities and sources of wealth can
be easily identified and transactions in whose accounts by and large conform to the known profile
may be categorized as low risk. The illustrative examples of low risk customers could be salaried
employees whose salary structures are well defined, people belonging to lower economic strata of
the society whose accounts show small balances and low turnover, Government Departments andGovernment owned companies, regulators and statutory bodies etc. In such cases, only the basic
requirements of verifying the identity and location of the customer shall be met.
ii. Medium Risk (Level II):
Customers that are likely to pose a higher than average risk to the bank may be categorized as
medium or high risk depending on customer’s background, nature and location of activity, country
of origin, sources of funds and his client profile etc; such as:
a) Persons in business/industry or trading activity where the area of his residence or place of
business has a scope or history of unlawful trading/business activity.
b) Where the client profile of the person/s opening the account, according to the perception of
the branch is uncertain and/or doubtful/dubious.
iii. High Risk (Level III):
The branches may apply enhanced due diligence measures based on the risk assessment, thereby
requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the
sources of funds are not clear. The examples of customers requiring higher due diligence may
include
a) Non Resident Customers,
b) High Net worth individuals
c) Trusts, charities, NGOs and organizations receiving donations,
d) Companies having close family shareholding or beneficial ownership
e) Firms with ‘sleeping partners’
f) Politically Exposed Persons (PEPs) of foreign origin
g) Non-face to face customers, and
h) Those with dubious reputation as per public information available, etc.
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