By FAISAL KAMRAN

KNOW YOUR
CUSTOMER
(CUSTOMER OR ENHANCED
DUE DILIGENCE)
KYC REQUIREMENTS
• Account Holder ID
• NTN
• Funds Transfers
• Investment / Security Purchase
• Compliance Program
 KYC OBJECTIVES
• Facilitate Compliance
• Facilitate Safe & Sound Practices
• Decrease the Likelihood of Abuse
• Protect the Reputation of the Bank
• Timely Detection of Suspicious Activity
• Reduce Risk of Seizure or Forfeiture
CONTENTS OF KYC
PROGRAM
• Vary Based on Institution's Size
and Complexity
• Nature and Extent of Activities
• Levels of Risk
• Delineate Appropriate
Documentation Requirements
 CONTENTS OF KYC
PROGRAM
[continued]

• Understand Intended Relationship

• True Identity of Customers
• Source of Funds
• Monitoring Activity
• Suspicious Activity Reporting
 CUSTOMER
IDENTIFICATION PROCESS
• Satisfactorily Establish Identity
• Extent of Identification Process
• Best Documents for Verifying
Identity
• Introductions or Referrals
• Necessary Information – Minimum
Threshold
NATURAL PERSON
Examine and Record
Primary Identification
• CNIC
• Drivers License
• Passport
• Any other ID
• Registration Card
NATURAL PERSON [continued]

Record Primary Information

• Name and Address
• National Tax Number
• Foreign ID Number
• Date of Birth
• Phone Numbers
• Bank References
NATURAL PERSON [continued]

Examine and Record Secondary

Identification
• Credit Card
• Employer Card
• Union Card
• Voter Registration
• School ID
 NATURAL PERSON [continued]

Verifying Information
• Physical Observation • Telephone Book
• Call Backs • Contacts
• Third Party Checks • Credit Reports
• Verification Services
 BUSINESS ENTITY
Establish True Identity
• Verify and Record Evidence of Legal
Status
• Verify Information About Business
• Verify and Record ID of Principals
• Verify Information on Principals
REVIEW-EXAMINATION
CONSIDERATIONS
• Internal Controls
• Account Opening Procedures
• Management Information and
Monitoring Systems
• Compliance With Laws and
Regulations.
INTERNAL AUDIT
CATEGORIES OF
CUSTOMER RISK

• Type of Customer
• Products and Services
• Geographical Locations
TYPE OF CUSTOMER
• Cash Intensive
• NBFC Activities
• Financial Services
– Money Transmitters
– Currency Exchangers
– Cash Cheques
• Non-Resident Accounts
• Professional Service Providers
PRODUCTS & SERVICES
• Private Banking
• Offshore Activity
• Money Transfers
• Monetary Instrument Sales
 KYC FACILITATES
SUSPICIOUS ACTIVITY
REPORTING
• Detection
• Timely Reporting
• Controlling Risk
– Reputation
– Compliance
– Civil & Criminal Liability
– Penalties
Thanks