Customer Classification
In order to determine the appropriate information and documentation that must be collected,
all the customers at the bank are classified into distinct constitution types and categories
within them.
1 Constitution
The information required from the customer is based on the customer type of the
account holder and is referred to as the constitution. The following constitution types
are applicable to the Bank:
− Individuals: All accounts opened by individuals or groups acting in an
individual capacity (e.g. Joint Accounts, Hindu Undivided Family) are present
in this category.
− Business Entities: Accounts of specific corporate entities, separate and
distinct from the individuals who finance it.
− Financial Institutions: Institutions that provide financial services to its
members or clients including private, public and co-operative sector banks as
well as non-banking institutions such as money-services businesses and chit
funds.
− Government, Government Agency or Entity: Any permanent or nonpermanent
organization in the machinery of the government including
departments, ministries and other types of public bodies.
− Trust: Trusts are classified into two types - Public trusts that are generally
formed for charitable and religious purposes and are not intended for
commercial activities while private trusts generate income for specified
beneficiaries.
− Non Profit Organizations: Non-profit organizations or charities can be
registered as trusts, societies or a private limited non-profit company under
Section 25 of the Companies Act. These exist independently of the
government, are self-governed, produce benefits for individuals or groups
outside the membership of the organization and are prohibited from
disbursing monetary residual to members. Religious organizations are set up
primarily for religious purposes and must be registered with the Income Tax
Department.
− Societies and Associations: A society or an association is an institution
owned by its members in that the funds are raised from membership and are
then used to provide common services to all the members of the organization.
Based on these definitions, a particular customer could fit into one or more
constitutions listed above but will hold the same customer risk categorisation value
from a KYC, AML and CFT compliance standpoint.
2 Categories
All the categories for the constitutions can be broadly grouped under individual and
entity constitution types as listed below:
2.1 Individuals
The constitution type individual consists of the following sub-categories:
Non-Resident Indian: A Non-Resident Indian (NRI) is an Indian citizen who resides
out of India for employment, business or other reasons for an uncertain duration of
stay. NRI accounts may provide for special tax and repatriation benefits due to the
status of the account holder.
Foreign National: A foreign national is an individual not of Indian nationality but
currently residing in the country for various purposes.
Persons of Indian Origin: A person of Indian origin is an individual who is not a
citizen of India but has Indian ancestry and has obtained a valid PIO card.
Minor: A minor account is an account created and operated in the name of a minor
(under the age of 18) and represented by a guardian or custodian. Upon the minor
attaining majority, the right of the guardian to operate the account shall cease.
Staff: Account created and operated by current or past employees of the bank.
Hindu Undivided Family: The Hindu Undivided Family (HUF) is a joint family
consisting of members descending from a common ancestor. A senior member is
designated as the ‘Karta’ responsible for managing the account for the HUF.
Single: Any Indian citizen above the age of 18 and not falling under any of the
categories listed above account is considered a single account holder.
Joint: A joint account type is created in the combined name of all the depositors,
each of whom acting in his or her own individual capacity. A joint account can be
created between any number of Individual, Minor, Staff and NRI constitution types.
2.2 Entities
Each constitution in the entity section consists of obvious categories as listed below:
Business Entities
− Proprietorship
− Private Limited Company
− Partnership
− Co-operative
− Public Limited Company
− Joint Hindu Family Business
− Limited Liability Partnership
Financial Institutions
− Private Banks
− Public Sector Banks
− Regional Rural Banks
− State Co-operative Banks
− District Co-operative Banks
− Urban Co-operative Banks
− Money Service Businesses
− Non-Banking Financial Company
Government, Government Agency or Entity
− State Government
− Central Government
− State Government Undertaking
− Government of India Undertaking
− Government Authorities, Autonomous & Regulatory Bodies
− Liquidator
− Local Bodies
Trusts
− Public
− Private
Non Profit Organizations
− Trust
− Society
− Section 25 Company
− Unregistered Entity
Societies and Associations
− Registered
− Unregistered
In order to determine the appropriate information and documentation that must be collected,
all the customers at the bank are classified into distinct constitution types and categories
within them.
1 Constitution
The information required from the customer is based on the customer type of the
account holder and is referred to as the constitution. The following constitution types
are applicable to the Bank:
− Individuals: All accounts opened by individuals or groups acting in an
individual capacity (e.g. Joint Accounts, Hindu Undivided Family) are present
in this category.
− Business Entities: Accounts of specific corporate entities, separate and
distinct from the individuals who finance it.
− Financial Institutions: Institutions that provide financial services to its
members or clients including private, public and co-operative sector banks as
well as non-banking institutions such as money-services businesses and chit
funds.
− Government, Government Agency or Entity: Any permanent or nonpermanent
organization in the machinery of the government including
departments, ministries and other types of public bodies.
− Trust: Trusts are classified into two types - Public trusts that are generally
formed for charitable and religious purposes and are not intended for
commercial activities while private trusts generate income for specified
beneficiaries.
− Non Profit Organizations: Non-profit organizations or charities can be
registered as trusts, societies or a private limited non-profit company under
Section 25 of the Companies Act. These exist independently of the
government, are self-governed, produce benefits for individuals or groups
outside the membership of the organization and are prohibited from
disbursing monetary residual to members. Religious organizations are set up
primarily for religious purposes and must be registered with the Income Tax
Department.
− Societies and Associations: A society or an association is an institution
owned by its members in that the funds are raised from membership and are
then used to provide common services to all the members of the organization.
Based on these definitions, a particular customer could fit into one or more
constitutions listed above but will hold the same customer risk categorisation value
from a KYC, AML and CFT compliance standpoint.
2 Categories
All the categories for the constitutions can be broadly grouped under individual and
entity constitution types as listed below:
2.1 Individuals
The constitution type individual consists of the following sub-categories:
Non-Resident Indian: A Non-Resident Indian (NRI) is an Indian citizen who resides
out of India for employment, business or other reasons for an uncertain duration of
stay. NRI accounts may provide for special tax and repatriation benefits due to the
status of the account holder.
Foreign National: A foreign national is an individual not of Indian nationality but
currently residing in the country for various purposes.
Persons of Indian Origin: A person of Indian origin is an individual who is not a
citizen of India but has Indian ancestry and has obtained a valid PIO card.
Minor: A minor account is an account created and operated in the name of a minor
(under the age of 18) and represented by a guardian or custodian. Upon the minor
attaining majority, the right of the guardian to operate the account shall cease.
Staff: Account created and operated by current or past employees of the bank.
Hindu Undivided Family: The Hindu Undivided Family (HUF) is a joint family
consisting of members descending from a common ancestor. A senior member is
designated as the ‘Karta’ responsible for managing the account for the HUF.
Single: Any Indian citizen above the age of 18 and not falling under any of the
categories listed above account is considered a single account holder.
Joint: A joint account type is created in the combined name of all the depositors,
each of whom acting in his or her own individual capacity. A joint account can be
created between any number of Individual, Minor, Staff and NRI constitution types.
2.2 Entities
Each constitution in the entity section consists of obvious categories as listed below:
Business Entities
− Proprietorship
− Private Limited Company
− Partnership
− Co-operative
− Public Limited Company
− Joint Hindu Family Business
− Limited Liability Partnership
Financial Institutions
− Private Banks
− Public Sector Banks
− Regional Rural Banks
− State Co-operative Banks
− District Co-operative Banks
− Urban Co-operative Banks
− Money Service Businesses
− Non-Banking Financial Company
Government, Government Agency or Entity
− State Government
− Central Government
− State Government Undertaking
− Government of India Undertaking
− Government Authorities, Autonomous & Regulatory Bodies
− Liquidator
− Local Bodies
Trusts
− Public
− Private
Non Profit Organizations
− Trust
− Society
− Section 25 Company
− Unregistered Entity
Societies and Associations
− Registered
− Unregistered
No comments:
Post a Comment