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.

Documents needed for verification of various types of clients:

Documents needed for verification of various types of clients:

1. individuals: (a) One certified copy of an 'officially valid document' containing details of his identity
and address One recent photograph and such other documents including in respect of the nature
of business and financial status of the client as may be required by the banking company or the
financial institution or the intermediary. Photograph need not be submitted by a client who does
not have account-based relationship. Officially valid document means the passport, the driving
licence, the Permanent Account Number (PAN) Card, the Voter's Identity Card issued by the
Election Commission of India or any other document as may be required by the banking
company, or financial institution or intermediary. The Narega card and Adhar card issued by
UIDAI will also be officially valid documents.

2. Company: Certificate of incorporation; Memorandum and Articles of Association; A resolution from the
Board of Directors and power of attorney granted to its managers, officers or employees to transact on
its behalf; and an officially valid document in respect of managers, officers or employees holding an
attorney to transact on its behalf.

3. Partnership Firm: Registration certificate; Partnership deed; and an officially valid document in
respect of the person holding an attorney to transact on its behalf.

4. Trust Documents: Registration certificate; Trust deed; and an officially valid document in respect of the
person holding an attorney to transact on its behalf.

5. Association of Persons (ADP) or Body of Individuals (BOI):Resolution of the managing body of such
association or body of individuals; Power of attorney granted to him to transact on its behalf; an
officially valid document in respect of the person holding an attorney to transact on its behalf; and
such information as may be required by the banking company or the financial institution or the
intermediary to collectively establish the legal existence of such an association or body of
individuals.

Customer Identification Requirements – Indicative Guidelines

Trust/Nominee or Fiduciary Accounts
There exists the possibility that trust/nominee or fiduciary accounts can be used to
circumvent the customer identification procedures. The branches should determine whether
the customer is acting on behalf of another person as trustee/nominee or any other
intermediary. If so, branches shall insist on receipt of satisfactory evidence of the identity of
the intermediaries and of the persons on whose behalf they are acting, as also obtain details
of the nature of the trust or other arrangements in place. While opening an account for a
trust, branches should take reasonable precautions to verify the identity of the trustees and
the settlors of trust (including any person settling assets into the trust), grantors, protectors,
beneficiaries and signatories. Beneficiaries should be identified when they are defined. In the
case of a 'foundation', steps should be taken to verify the founder managers/ directors and
the beneficiaries, if defined.

Accounts of companies and firms
Branches need to be vigilant against business entities being used by individuals as a ‘front’ for
maintaining accounts with banks. Branches should examine the control structure of the entity,
determine the source of funds and identify the natural persons who have a controlling
interest and who comprise the management. These requirements may be moderated
according to the risk perception e.g. in the case of a public company it will not be necessary to
identify all the shareholders. But at least promoters, directors and its executives need to be
identified adequately.

Client accounts opened by professional intermediaries
When the branch has knowledge or reason to believe that the client account opened by a
professional intermediary is on behalf of a single client, that client must be identified.
Branches may hold 'pooled' accounts managed by professional intermediaries on behalf of
entities like mutual funds, pension funds or other types of funds. Branches should also
maintain 'pooled' accounts managed by lawyers/chartered accountants or stockbrokers for
funds held 'on deposit' or 'in escrow' for a range of clients. Where funds held by the
intermediaries are not co-mingled at the branch and there are 'sub-accounts', each of them
attributable to a beneficial owner, all the beneficial owners must be identified. Where such
accounts are co-mingled at the branch, the branch should still look through to the beneficial
owners. Where the bank rely on the 'customer due diligence' (CDD) done by an intermediary, it
shall satisfy itself that the intermediary is regulated and supervised and has adequate
systems in place to comply with the KYC requirements.

Accounts of Politically Exposed Persons(PEPs) resident outside India
Politically exposed persons are individuals who are or have been entrusted with prominent
public functions in a foreign country, e.g., Heads of States or of Governments, senior
politicians, senior government/judicial/military officers, senior executives of state-owned
corporations, important political party officials, etc. Branches should gather sufficient
information on any person/customer of this category intending to establish a relationship and
check all the information available on the person in the public domain. Branches should verify
the identify of the person and seek information about the sources of funds before accepting
the PEP as a customer. The branches should seek prior approval of their concerned Zonal
Heads for opening an account in the name of PEP.

Accounts of non-face-to-face customers
With the introduction of telephone and electronic banking, increasingly accounts are being
opened by banks for customers without the need for the customer to visit the bank branch. In
the case of non-face-to-face customers, apart from applying the usual customer identification
procedures, there must be specific and adequate procedures to mitigate the higher risk
involved. Certification of all the documents presented shall be insisted upon and, if necessary,
additional documents may be called for. In such cases, branches may also require the first
payment to be effected through the customer's account if any with another bank which, in
turn, adheres to similar KYC standards. In the case of cross-border customers, there is the
additional difficulty of matching the customer with the documentation and the branches might
have to rely on third party certification/introduction. In such cases, it must be ensured that
the third party is a regulated and supervised entity and has adequate KYC systems in place.
Correspondent Banking
a) Correspondent banking is the provision of banking services by one bank (the
'correspondent bank') to another bank (the 'respondent bank'). These services may include
cash/funds management, international wire transfers, drawing arrangements for demand
drafts and mail transfers, payable-through-accounts, cheques clearing, etc. The bank while
entering into any kind of correspondent banking arrangement shall gather sufficient
information to understand fully the nature of the business of the correspondent/respondent
bank. Information on the other bank’s management, major business activities, level of
AML/CFT compliance, purpose of opening the account, identity of any third party entities that
will use the correspondent banking services, and regulatory/supervisory framework in the
correspondent's/respondent’s country shall be of special relevance. Similarly, the bank shall
also ascertain from publicly available information whether the other bank has been subject to
any money laundering or terrorist financing investigation or regulatory action. Such
relationships shall be established only with the prior approval of the Board. The Board may in
the alternative delegate powers in this regard to a committee headed by the Chairman/CEO of
the bank and lay down clear parameters for approving such relationships. Proposals
approved by the Committee should invariably be put up to the Board at its next meeting for
post facto approval. The responsibilities of each bank with whom correspondent banking
relationship is established should be clearly documented. In the case of payable-through-
accounts, the correspondent bank should be satisfied that the respondent bank has verified
the identity of the customers having direct access to the accounts and is undertaking ongoing
'due diligence' on them. The bank shall also ensure that the respondent bank is able to provide
the relevant customer identification data immediately on request.
b) Bank shall not enter into a correspondent relationship with a 'shell bank'. A Shell bank is a
bank which is incorporated in a country where it has no physical presence and is unaffiliated
to any regulated financial group. “Shell banks” are not permitted to operate in India. Bank
shall also guard against establishing relationships with respondent foreign financial
institutions that permit their accounts to be used by “shell banks”. The Bank shall move
cautiously while continuing relationships with respondent banks located in countries with poor
KYC standards and countries identified as 'non-cooperative' in the fight against money
laundering policies and procedures in place and apply enhanced 'due diligence' procedures for
transactions carried out through the correspondent accounts

Classification of risk under customer acceptance policy

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.

Master Circular on Know Your Customer (KYC)

Master Circular on Know Your Customer (KYC) norms/Anti-Money Laundering (AML)
standards/Combating Financing of Terrorism (CFT)/Obligation of banks and financial
institutions under Prevention of Money Laundering Act, (PMLA), 2002.
A. Purpose
Banks and financial institutions (FIs) have been advised to follow certain customer identification
procedure for opening of accounts and monitor transactions of suspicious nature for the purpose
of reporting the same to appropriate authority. These ‘Know Your Customer’ (KYC) guidelines
have been revisited in the context of the recommendations made by the Financial Action Task
Force (FATF) on Anti Money Laundering (AML) standards and on Combating Financing of
Terrorism (CFT). Detailed guidelines based on the recommendations of FATF and the paper
issued on Customer Due Diligence (CDD) for banks by the Basel Committee on Banking
Supervision (BCBS), with suggestions wherever considered necessary, have been issued.
Banks/FIs have been advised to ensure that a proper policy framework on ‘Know Your Customer’
and Anti-Money Laundering measures is formulated and put in place with the approval of their
Boards.
A list of circulars issued from time to time in this regard which are consolidated in this Master
Circular is given in Annex – III
B. Application
(i) The instructions, contained in the Master Circular, are applicable to All India Financial
Institutions, all Scheduled Commercial Banks (including RRBs), Local Area Banks,/ All Primary
(Urban) Co-operative Banks /State and Central Co-operative Banks. (ii) These guidelines are
issued under Section 35A of the Banking Regulation Act, 1949 and Rule 9(14) of Prevention of
Money-Laundering (Maintenance of Records) Rules, 2005. Any contravention thereof or noncompliance
shall attract penalties under Banking Regulation Act. The objective of KYC/AML/CFT
guidelines is to prevent banks/FIs from being used, intentionally or unintentionally, by criminal
elements for money laundering or terrorist financing activities. KYC procedures also enable
banks/FIs to know/understand their customers and their financial dealings better and manage
their risks prudently.
1. Introduction
The objective of KYC/AML/CFT guidelines is to prevent banks/FIs from being used, intentionally
or unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC
procedures also enable banks/FIs to know/understand their customers and their financial dealings
better and manage their risks prudently.
2. Definitions
2.1 Customer
For the purpose of KYC Norms, a ‘Customer’ is defined as a person who is engaged in a financial
transaction or activity with a reporting entity and includes a person on whose behalf the person
who is engaged in the transaction or activity, is acting.
2.2 Designated Director
“Designated Director" means a person designated by the reporting entity (bank, financial
institution, etc.) to ensure overall compliance with the obligations imposed under chapter IV of the
PML 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 entity 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
2.3 “Officially valid document” (OVD)
OVD means the passport, the driving licence, the Permanent Account Number (PAN) Card, the
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 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.
(i) Provided that where ‘simplified measures’ are applied for verifying the identity of the clients the
following documents shall be deemed to be OVD:
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.(ii) Provided further that where ‘simplified measures’ are applied for verifying for the
limited purpose of proof of address the following additional documents are deemed to be OVDs :.
a) Utility bill which is not more than two months old of any service provider (electricity, telephone,
post-paid mobile phone, piped gas, water bill);
b) Property or Municipal Tax receipt;
c) Bank account or Post Office savings bank account statement;
d) Pension or family pension payment orders (PPOs) issued to retired employees by Government
Departments or Public Sector Undertakings, if they contain the address;
e) Letter of allotment of accommodation from employer issued by State or Central Government
departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial
banks, financial institutions and listed companies. Similarly, leave and license agreements with
such employers allotting official accommodation; and
f) Documents issued by Government departments of foreign jurisdictions and letter issued by
Foreign Embassy or Mission in India.
2.4 Person
In terms of PML Act a ‘person’ includes:
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether
incorporated or not,
(vi) every artificial juridical person, not falling within any one of the above persons (i to v), and
(vii) any agency, office or branch owned or controlled by any of the above persons (i to vi).

Types of risks

Major Types of Risks
Operational Risk human errors, technical faults, infrastructure breakdown, faulty
systems and procedures or lack of internal controls
Operational risk can be controlled by:
a. providing state of art systems and specified contingency
plans,
b. disaster control procedures, and sufficient back-up
arrangements for man and machine,
c. A duplication process at a different site (mirroring).
Exchange Risk on account of fluctuations in exchange rates and/or when
mismatches occur in assets/ liabilities and receivables/payables
Credit Risk arises due to inability or unwillingness of the counter party to meet
the obligations at maturity of the underlying transaction. Credit risk is
further classified into pre-settlement risk and settlement risk.
Pre-settlement risk: failure of the counter party before maturity of
the contract thereby exposing the other party to cover the
transaction at the ongoing market rates. This entails the risk of only
market differences and is not an absolute loss for the bank
Settlement risk: risk of failure of the counter party during the
course of settlement, due to the time zone differences, between the
two currencies to be exchanged.One party to a foreign exchange
transaction could pay out the currency it sold but not received the
currency it bought. This principal risk in the settlement of foreign
exchange transaction is variously called foreign exchange
settlement risk or temporal risk or Herstatt risk( after failure of
Bankhaus Herstat of Germany in 1974)
Methods to mitigate settlement risk are:
a. applying credit lines (limits) to each counter party to reduce
the risk.
b. settlement systems, operating on a single time basis, as also
on real-time gross settlement basis, are put in place.
c. time zone differences could be eliminated, if the global books
are linked to a single time zone, say GMT closing.
Liquidity Risk Potential for liabilities to drain from the bank at a faster rate than
assets. The mismatches in the maturity patterns of assets and
liabilities give rise to liquidity risk.
When a party to a foreign exchange transaction is unable to meet its
funding requirement or execute a transaction at a reasonable price,
it creates Liquidity Risk
It is also the risk of the party not being able to exit or offset positions
quickly at a reasonable price.In a deal of US dollar purchase against rupee, if the party selling US
Dollar is short of funds in the nostro account, then it may not be
possible for him to generate/borrow or buy USD to fund the USD
account. Liquidity risk is said to have arisen.
Liquidity risk mitigation is done by:
a. control the mismatches between maturities of assets and
liabilities
b. fixing limits for maturity mismatches and reduce open
positions
Gap Risk/Interest
Rate Risk
arises due to adverse movement of interest rates or interest rate
differentials
If the purchase and sale take place for different value, while the
bank may
completely stand hedged on exchange front, it creates a mismatch
between its assets and liabilities referred to as GAP
These gaps are to be filled by the bank by paying/receiving
appropriate forward differentials. These forward differentials are in
turn a function of interest rates and any adverse movement in
interest rates would result in adverse movement of forward
differentials thus affecting the cash flows on the underlying open
gaps or mismatches. Therefore, it is the risk arising out of adverse
movements in implied interest rates or actual interest rate
differentials
Interest rate risk also occurs when different bases of interest rates
are applied to assets and corresponding liabilities.
Volatility in interest rates is due to:
a. The increasing capital flows in the global financial markets
b. the economic disparities between nations and the increased
use of interest rates as a regulatory tool for macro- economic
controls
Mitigation of interest rate risk is done by:
a. undertaking appropriate swaps, or
b. matching funding actions or
c. through appropriate risk mitigating interest rate derivatives
Market Risk due to adverse movement of market variables when the players are
unable to exit the positions quickly
Legal Risk On account of non-enforceability of contract against a counter party.Legal risk also includes compliance and regulations related risks,
arising out of non-compliance of prescribed guidelines or breach of
governmental rules, leading to wrong understanding of rules and
penalties by the enforcing agencies.
Systemic Risk possibility of a major bank failing and the resultant losses to counter
parties reverberating into a banking crisis.
Country Risk
/Political Risk
counter party situated in a different country unable to perform its
part of the contractual obligations despite its willingness to do so
due to local government regulations or political or economic
instability in that country.
A country giving very high returns is generally:
a. Faces high country risk
b. Not too many countries or instutions are ready to invest in
that country. Hence they try to attract these institutions by
giving high returns
Sovereign Risk sub-risk in the overall country risk in that certain state-owned entities
themselves quoting their sovereign status claim immunity from any
recovery proceedings of fulfillment of any obligations they had
originally agreed to.
Sovereign risk can be reduced by
a. inserting disclaimer clauses in the documentation
b. making the contracts and the sovereign counter parties
subject to a third country jurisdiction