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PROVISIONS UNDER ANTI MONEY LAUNDERING ACT

Objective
For the purpose of implementations of provisions on prevention of Money laundering Act, MOF Department of Economic affairs (Budget division) has formulated the Know Your Customers (KYC)/Customer Due Diligence (CDD) norms for Prevention of money laundering & combating of financing Terrorism in small savings schemes. We have to be apply these provisions in the Post offices in compliance of the provisions of Act.

Know your customer norms


Three risk categories:1. Low Risk:- Accounts opened/Certificate purchased with initial deposit below Rs.50,000. 2. Medium Risk:- Accounts opened/Certificate purchased with initial deposit between Rs.50,000 to Rs.10 lakh. 3. High Risk:- Accounts opened/Certificate purchased with initial deposit above Rs.10 lakh.

Know your customer norms


Accounts opened/Certificate purchased with initial deposit below Rs.50,000. 1. 2 Recent Photographs (3 in case of EDBO) 2. Identity proof :-(PAN NOT MANDATORY)- Any one from:- Electoral Photo identity card, Ration card, Passport, Driving License, POSB identity card, Govt. Identity card, (PPO, BPL, Job card) 3. Address proof- Any one from:- Electoral Photo identity card, Bank/POSB PB, Current electricity bill/telephone bill, certificate from any public authority including area postman GDS or BPM.

Know your customer norms


Accounts opened/Certificate purchased with initial deposit between Rs.50,000 and Rs.10 lakh. 1. 2 Recent Photographs (3 in case of EDBO) 2. Identity proof :-(PAN or Declaration in Form 60/61 MANDATORY) and Any one from:- Electoral Photo identity card, Ration card, Passport, Driving License, POSB identity card, Govt. Identity card, (PPO, BPL, Job card) 3. Address proof- Any one from:- Electoral Photo identity card, Bank/POSB PB, Current electricity bill/telephone bill.

Know your customer norms


Accounts opened/Certificate purchased with initial deposit above Rs.10 lakh. 1. 2 Recent Photographs (3 in case of EDBO) 2. Identity proof :-(PAN or Declaration in Form 60/61 MANDATORY) and Any one from:- Electoral Photo identity card, Ration card, Passport, Driving License, POSB identity card, Govt. Identity card, (PPO, BPL, Job card) 3. Address proof- Any one from:- Electoral Photo identity card, Bank/POSB PB, Current electricity bill/telephone bill. 4. Copy of source of funds and physical verification of address before opening of account.

If account/certificate holder is minor, norms are applicable to guardians In case of joint holders , norms are applicable to all joint account/certificate holders Customer who have already submitted KYC documents in any purchase, need not to submit these again. Mention account number/purchase application number through which KYC documents were given earlier. Name and address of the customer should match with earlier KYC Documents.

NOTES

Record keeping
ACCOUNTS In HOs- KYC documents (including received from EDBOs or Sos )should be attached with Account Opening Forms and kept in guard files. In SOs- For SB/TD/PPF KYC documents should be attached with Account Opening Form and sent to HO and for RD/MIS/SCSS kept in guard files. In BOs :- KYC Documents should be attached with account opening form and sent to Account Office.

Record keeping
CERTIFICATES In HOs- KYC documents (including received from EDBOs) should be attached with Purchase Application Forms and kept in guard files. In SOs- KYC documents should be attached with Purchase Application Forms and kept in guard files. In BOs :- KYC Documents should be attached with Purchase Application form and sent to Account Office.

Record keeping
Photos One photo should be pasted in Passbook and other attached with Account Opening form. In case of SOs and EDBOs, one photo should be pasted in SS Book. Attestation:- If deposit is made through agent, the agent should attest all KYC documents. In case of direct investment, self attestation or attestation by Gazetted Officer is required. BPM/SPM/APM to attest photograph from photo ID proof.

Record keeping
Preservation: Record relating of all transactions should be preserved for 10 years. All Purchase Applications alongwith KYC documents should be preserved for 10 years after discharge. At the time of closure of account, account opening form alongwith KYC documents should be attached with closure voucher and transferred to SBCO. SBCO should preserve all record related to transactions for 10 years.

Reporting of transactions
Category (Cash Transaction) All cash transactions exceeding 1000000/All cash transactions in series which are less than 1000000/- at a time but are integrated & total exceeds 1000000/- in a month Method of monitoring Prepare list & send to Head of Division on 3rd of following month. Head of the Division to Circle by 5th Head of the Circle to Principal officer at Directorate by 8th

Category (Suspected Transaction)


Cash is accepted & Forged or counterfeit currency notes used or forgery of Security or documents Any attempted transaction of Forged or counterfeit currency notes used or forgery of Security or documents Suspected transaction

Method of monitoring
Prepare list & send to Head of Division on next working day. Head of the Division to Circle by next working day of receipt from PO Head of the Circle to Principal officer at Directorate by next working day of receipt from Head of the Division.

Definition of Suspicious transaction


A transaction including an attempted transaction, whether or not made in cash which, to a person acting in good faith (i) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the schedule to the Act regardless of the value involved: or (ii) appears to be made in circumstances of unusual or unjustified complexity: or (iii) appears to have no economic rationale or bonafide purpose: or (iv) give rise to a reasonable ground of suspicion that involve financing of the activities relating to terrorism; Transaction includes deposit, w/d, exchange or transfer of funds in whatever currency, whether in cash or in cheque payment order or other instruments or by electronic or other physical means.

Instructions for existing Accounts/Certificates (only in case of suspicion)


EXISTING ACCOUNTS Types of measures to be taken Procedure

KYC

In case of difference in Sign., transfer of account and revival of silent accounts, all KYC documents are to be collected Same as prescribed for new accounts/certificates. Same as prescribed for new accounts/certificates Report be sent immediately as prescribed for new customer

Record keeping Reporting Suspected transaction

Penalty
In case of non-implementation of AML/CFT norms, a penalty from Rs.10,000 to Rs. 1,00,000 can be imposed under PML Act and rules in addition to disciplinary action.