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‘Know Your Customer’ or ‘Know Your Client’ (KYC) has become the most talked about pain point across the country!
Read the Article to address Customer Pain Points!
Indian requirements are no different from other countries across the globe!
It is therefore, a responsibility of every law-abiding citizen to understand the genesis of KYC requirements and co-operate with the service providing entities!
“Transaction” referred above means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof and includes –
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The FATF Recommendations
Paris, 16 February 2012
Money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction are serious threats to security and the integrity of the financial system.
The FATF Standards have been revised to strengthen global safeguards and further protect the integrity of the financial system by providing governments with stronger tools to take action against financial crime. At the same time, these new standards will address new priority areas such as corruption and tax crimes.
The revision of the Recommendations aims at achieving a balance:
|FATF Recommendations 2012|
|A||AML/CFT POLICIES AND COORDINATION||E||TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS|
|1||Assessing risks & applying a risk-based approach||24||Transparency and beneficial ownership of legal persons|
|2||National cooperation and coordination||25||Transparency and beneficial ownership of legal arrangements|
|B||MONEY LAUNDERING AND CONFISCATION||F||POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES|
|3||Money laundering offence||Regulation and Supervision|
|4||Confiscation and provisional measures||26||Regulation and supervision of financial institutions|
|C||TERRORIST FINANCING AND FINANCING OF PROLIFERATION||27||Powers of supervisors|
|5||SRII Terrorist financing offence||28||Regulation and supervision of DNFBPs|
|6||SRIII Targeted financial sanctions related to terrorism & terrorist financing||Operational and Law Enforcement|
|7||Targeted financial sanctions related to proliferation||29||Financial intelligence units|
|8||Non-profit organisations||30||Responsibilities of law enforcement and investigative authorities|
|D||PREVENTIVE MEASURES||31||Powers of law enforcement and investigative authorities|
|9||Financial institution secrecy laws||32||Cash couriers|
|Customer due diligence and record keeping||General Requirements|
|10||Customer due diligence||33||Statistics|
|11||Record keeping||34||Guidance and feedback|
|Additional measures for specific customers and activities||Sanctions|
|12||Politically exposed persons||35||Sanctions|
|13||Correspondent banking||G||INTERNATIONAL COOPERATION|
|14||Money or value transfer services||36||International instruments|
|15||New technologies||37||Mutual legal assistance|
|16||Wire transfers||38||Mutual legal assistance: freezing and confiscation|
|Reliance, Controls and Financial Groups||39||Extradition|
|17||Reliance on third parties||40||Other forms of international cooperation|
|18||Internal controls and foreign branches and subsidiaries|
|Reporting of suspicious transactions|
|20||Reporting of suspicious transactions|
|21||Tipping-off and confidentiality|
|Designated non-financial Businesses and Professions (DNFBPs)|
|22||DNFBPs: Customer due diligence|
|23||DNFBPs: Other measures|
|1||Banking Companies||(i)||All Banks including State Bank of India|
|(ii)||Co-operative Banks (State Co-operative Banks, Central Co-operative Banks and Primary Co-operative Banks)|
|(iii)||Regional Rural Banks|
Financial Institution: A Non-Banking Institution carrying on as its business or part of its business any of the following activities:
|(ii)||Chit Fund Companies|
|(iii)||Housing Financing Institutions|
Payment System Operators:
Non-Banking Finance Companies:
|(vii)||Department of Posts|
|(iii)||Intermediary registered by PFRDA|
|(iv)||Recognised stock exchanges|
|Persons carrying on a designated business or profession and such other activities as the Central Government may, by notification, so designate, from time to time||(i)||Person carrying on activities for playing games of chance for cash or kind, and includes such activities associated with casino;|
|(ii)||Inspector-General of Registration (Registration of Properties)|
|(iii)||Real Estate Agent|
|(iv)||Dealer in precious metals, precious stones and other high value goods, as may be notified by the Central Government; (Precious Metal means gold, silver, platinum, palladium or rhodium or such other metal as may be notified by the Central Government)|
|(v)||Person engaged in safekeeping and administration of cash and liquid securities on behalf of other persons, as may be notified by the Central Government; or|
|(vi)||Multi-State Co-operative Society registered under the Multi-State Co-operative Societies Act, 2002|
Note: ‘Person’, wherever mentioned, includes: