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Published by Prathmesh Gharat

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Published by: Prathmesh Gharat on Mar 03, 2011
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This KYC policy of PJSB Ltd. Is framed and approved by the board of directors Meeting Dated13/10/2005.by resolution no.13 and implemented from 1 dec2005RBI has advised to follow customer identification procedure for opening of accounts and monitoringtransaction of suspicious nature for purpose of reporting it to appropriate authorityThese KYC guideline have been revised in context of recommendations made by financial action taskforce(FAFT) on anti money laundering (AML)standards and on combating financing of terrorismThese KYC guideline and subsequent instruction were followed by Bank but not in total so thereforethere was a need to form the policySCOPE OF POLICY
To prevent the bank being used by the criminal element for money laundering activities
nderstand the customer and there financial dealing to manage there risk prudentlyKEY ELEMENTS OF THE POLICY
Customer acceptance policy
Customer identification procedures
Monitoring of transactions
Risk management  1)
STOMER ACCEPTANCE POLICYThe objectives of customer acceptance policy area)
To ensure that no account is opened in anonymous or fictitious nameb)
To ensure correct local residential address and native place address of the customer andhis client and verification thereof c)
To ensure that identify /legal existence of new customer is established before acceptinghim as customerd)
To ensure that person is not engaged in suspicious activities and the account is not usedfor the money laundering activitiese)
Not to open an account and close an existing account where the bank is unable to verifyor identify the and obtain the document required as per risk categorization due to nonco-operation of the customer or non reliability of data furnished to the bankf)
The decision to close the suspicious account may be taken at reasonably higher levelafter giving due notice to the customer explaining the reason for such decision 2)IDENTIFICATION OF C
To identify the existence of customer the Bank should rely on the following documentsAccount of individual I.
PAN cardIII.
Voters identity cardIV.
Driving licenceV.
Identity card /electricity bill/telephone billVI.
Letter from recognized publicauthority or public servant verifyingthe identity and residence of thecustomer to satisfaction of the bankIn case the bank is unable to verify or obtain the documents required as per riskcategorization due to non co-operation of customer the bank should not open anaccount
I) Residential Address Proof 
Correct permanent address of persons who have approached the bank should be ensured byobtaining any one document  (i)  Telephone Bill  (ii)  Bank Account Statement  (iii)  Letter from anyrecognized public authoity  (iv)  Electricity Bill  (v)  Ration Card/Voters ID  (vi)  Letter from employer(subject to satisfaction of the bank certifled copies should be kept with the bank duly verified with theoriginals.The opening of new account should be authorized by Branch Manager/Branch in-Charge.  Inabsence of Branch Manager/Branch-in-Charge, next senior official/supervisor should authorize openingof account.  No cheque book should be issued unless all procedures and formalities are completed.2 (ii)
Introduction of opening new Account
As far as possible the person giving introduction should be of some standing and he should havean operative account for at least one year with minimum balance as per banks requirement.b)
Accounts should not be opened on introduction by person having small and marginal balanceswith non-satisfactory/no operation in the accounts provided Bank satisfy with the introducerIdentity.c)
Where the introducer is not a customer of bank then he should be personally present whileintroducing the account or he should sign in presence of official of bank and a remark to thateffect should be made.d)
In case party is unable to provide an introduction satisfactorily as stated above, it must beincumbent upon him to provide sufficient proof of his antecedents before the account is opened(such as Employment Antecedents, Educational Antecedents, Banking Antecedents, Maritalantecedents Photo identity etc.)e)
For proprietorship account, even though proprietor is introduced, the business dealing and pastrecords, business premises, registration under Shop & Establishment Act, Sales tax and incomeTax Assessemetn year etc.  should be inquired into and a remark should be made in the account
opening form.  Care should be taken to ensure that the account is not opened only to encashDemand Drafts, Pay Orders, Cheques of similar tenor, with ulterior motive.2 (iii)
Obtaining of Photographs
Bank should obtain two recent colour photographs of each of the constituent at the time of opening account and the account should not be opened without a meeting between bankofficial and customer.b)
Photograph of the person authorized to operate the account should also be obtgained.c)
In case of joint accounts and partnership accounts, photographs of all depositors and partnersshould be obtained.d)
In case of deposits in the names of minors, photograph of both guardian and minor should beobtained along with age proof of minors.e)
Signature across the photograph and all signatures on account opening form should be signedunder seal by the officials of the branch.f)
No separate photograph need be obtained for each category of deposit.All the time of opening an account in order to know whether photograph is already with thebranch, the applications of different type of deposit accounts should be properly referred to oneanother mentioning the related account number in the application form.  Photographs forsaving Bank Accounts and Current Accounts should be obtained compulsorily and should bereferred to other category of accounts.2 (iv)
Categorisation of Customers.
Based on parameters of risk perception in terms of nature of business activity, location of customer andhis clients, mode of payments, volume of turnover, social and financial status etc.  customers should becategorized into low, medium and high risk.  For the convenience it can be termed as Level I, Level II,Level III respectively.  Customers requiring high level of monitoring are to be classified as PoliticallyExposed Persons-Level IV done at the end of financial year.
Low Risk Customers
Level I)
Individuals residing/employed within the vicinity of branch and debit or credit summations peryear do not exceed Rs. 2.00 lakh.
Salary Earners Accounts.
Medium Risk Customers
Level II)
Individual account with debit or credit per year exceeds Rs. 2.00 lakh.  For new accounts thismay be ascertained with a meeting with the customer.
Those who reside outside the vicinity of the branch.
All proprietorship and partnership accounts irrespective of area and turnover.
Accounts of Companies and Firms : Branches need to be vigilant and examine the controlstructure of entity, determine the source of funds and identify the natural persons who have

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