Prevention of Money-laundering Act, 2002 (15 of 2003)

Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby
makes the following amendments to the Prevention
of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the
Procedure and Manner of Maintaining and Time for
Furnishing Information and Verification and Maintenance of Records of the Identity of the
Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005,
namely::-
1. (1)These rules may be called the Prevention of Moneylaundering
(Maintenance of Records of the Nature and Value of



Transactions, the Procedure and Manner of Maintaining and Time for Furnishing
Information and Verification and Maintenance of Records of the Identity of the Clients of the
Banking Companies, Financial
Institutions and Intermediaries) Third Amendment Rules, 2010.
(2) They shall come into force on the date of their publication in the Official
Gazette.
2. In the Prevention of Money-laundering (Maintenance of Records of the Nature
and Value of Transactions, the Procedure and Manner of



Maintaining and Time for Furnishing Information and Verification and Maintenance of
Records of the Identity of the Clients of the Banking
Companies, Financial Institutions and Intermediaries) Rules, 2005, -
(a) in rule 2,-
(i) after clause (b), the following clause shall be inserted, namely:-
“(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”.
(ii) in clause (d), for the words “the Election Commission of India or
any other document as may be required by the banking company or financial institution or
intermediary”, the words “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 Reserve Bank of
India or any other document as may be required by the banking companies, or financial
institution or intermediary” shall be substituted;
(iii) after clause (fa), the following clause shall be inserted, namely:-
“(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”.
(b) In rule 9, after sub-rule (2), the following sub-rule shall be inserted, namely:-
“(2A) Notwithstanding anything contained in sub-rule (2), an individual who desires to
open a small account in a banking company may be allowed to open such an account
on production of a self-attested photograph and affixation of signature or thumb print,
as the case may be, on the form for opening the account.
Provided that –

(i) the designated officer of the banking company, while opening the small account,
certifies under his signature that the person opening the account has affixed his
signature or thumb print, as the case may be, in his presence;
(ii) a small account shall be opened only at Core Banking Solution linked banking
company branches or in a branch where it is possible to manually monitor and ensure
that foreign remittances are not credited to a small account and that the stipulated limits
on monthly and annual aggregate of transactions and balance in such accounts are not
breached, before a transaction is allowed to take place;
(iii) a small account shall remain operational initially for a period of twelve months,
and thereafter for a further period of twelve months if the holder of such an account
provides evidence before the banking company of having applied for any of the
officially valid documents within twelve months of the opening of the said account, with
the entire relaxation provisions to be reviewed in respect of the said account after
twenty four months.
(iv) a small account shall be monitored and when there is suspicion of money
laundering or financing of terrorism or other high risk scenarios, the identity of client
shall be established through the production of officially valid documents, as referred to
in sub rule ( 2) of rule 9"; and
(v) foreign remittance shall not be allowed to be credited into a small account unless
the identity of the client is fully established through the production of officially valid
documents, as referred to in sub-rule (2) of rule 9.”