- May 2014
- December 2013
Ruby Jacob, 13 Jul 2013
Cash transaction services, gold coins sale and third-party services like insurance, mutual funds sales offered by banks, to walk-in customers who are not account holders, will get stricter. RBI has issued directions for banks to have proper customer acceptance policy and customer identification procedures.
Quoting PAN is mandatory for cash transactions exceeding Rs 50,000. Even if it is a single transaction or a series of connected transactions valuing Rs 50,000 banks are required to capture PAN of the customer and also verify that it is not a dummy one. If it appears that a cash transaction is being broken into a series to keep it below Rs 50,000 so as to avoid scrutiny, banks are required to quote PAN in each transaction and consider filing a Suspicious Transaction Report of the Financial Intelligence Unit (FIU) of the government. In the absence of PAN Form 60/61 is to be filled by the customer. This rule applies to DD, gold coins sale and also third party bank products like mutual funds and insurance policies.
Walk-in customers should expect stricter dealings from now for high value DDs and remittances. Next you approach a bank, where you are not an account holder, they might make you undergo identification requirements relating to PAN and address for availing DD facility or even making use of their mutual fund distribution, insurance sales activities.
Banks are required to maintain records of your third party products dealing through them for the period specified in the guidelines. Many financing activities of terrorists groups worldwide and money laundering activities are carried out through third party products in banks to avoid being detected.
Foreign remittances of customers too will draw closer scrutiny as per international Anti Money Laundering (AML) standards and Combating of Financing of Terrorism (CFT) guidelines.
Several banks were found flouting KYC/AML/CFT norms in recent investigations by RBI. These were first bought to spotlight by the now famous Cobrapost exposures involving top banks a few months ago.