PRESENTATION

ON
KYC NORMS
AND
ANTI MONEY LAUNDERING
PRESENTED BY-
DENISH MANDALIYA
POOJA BHANDARI
BHAVESH BHESANIYA
HITESH DHOLAKIYA
 EMERGENCE OF KYC…

The main purpose of KYC norms was to restrict money laundering

and terrorist financing, when it was introduced in late the 1990s in the
United States.

The US government turned it very strict after 9/11 and all regulations
were finalized before 2002 for KYC.

The US has made changes in its major legislations -- Bank Secrecy

Act, USA Patriot Act etc, to make KYC norms really effective for the
banking sector.

Taking a leaf out of the US book, the Reserve Bank of India too
directed all banks to implement KYC guidelines for all new accounts
in the 2nd half of 2002.
CONTINUE…

For existing accounts, imposing KYC norms was a little difficult, so

the RBI issued guidelines for the same at the end of 2004.

In order to prevent identity theft, identity fraud, money laundering,

terrorist financing, etc, the RBI had directed all banks and financial
institutions to put in place a policy framework to know their
customers before opening any account.

This involves verifying customers' identity and address by asking

them to submit documents that are accepted as relevant proof.
 WHAT IS KYC… ?

“KYC (Know Your Customer) is a framework for banks which

enables them to know or understand the customers and their
financial dealings to be able to serve them better.

All banks have been advised by the RBI to follow certain “KYC
Guidelines”.
 OBJECTIVES OF KYC…

 To enable the Bank to have positive identification of its

relationship

 Is in the interest of customers to safeguard their hard earned

money

 To prevent or identify theft, fraud, money laundering or

terrorist financing.
 WHEN DOES KYC APPLY (REQUIRED)…?

KYC will be carried out at the following stages:

 Opening a new account

 In respect of accounts where documents as per current KYC
standards have not been submitted
 Opening a Locker Facility where these documents are not available
with the Bank for all the Locker facility holders
 When the Bank feels it necessary to obtain additional information
from existing customers based on conduct of account
 When there are changes in the signature, mandate holders,
beneficial owners etc.
 For non-account holders approaching the Bank for high
value one-off transactions like Drafts, Remittances etc.
Proof needed from customers regarding KYC

RBI mandates three proofs to be collected from customers:

Photograph

Proof of identity

Proof of address

These are to be submitted by the customer both at the time

of opening of account as well as at the time of change of
address.
 For verification of photo and proof of identity, any of the
following documents can be presented…

Towards Name proof Photo Identification

1. Passport
2. Voter’s Identity Card
3. PAN Card
4. Driving Licence
5. Govt. /Defence ID card *
6. ID cards of reputed employers *
7. Letter from a recognised public authority or public servant
verifying the identity and residence of the customer*

* Subject to the satisfaction of the officer authorizing the opening of the account
 Towards address proof

1. Telephone Bill
2. Bank account statement
3. Income/Wealth tax assessment order
4. Credit Card Statement
5. Electricity Bill
6. Ration Card
7. Letter from employer*

* Subject to the satisfaction of the officer authorizing the opening of the account