2. Vision Statement:
To be the leading financial services provider,
partnering with our customers for a more
prosperous and secure future
We are a team of committed professionals,
providing innovative and efficient financial
solutions to create and nurture long-term
relationships with our customers. In doing so, we
ensure that our shareholders can invest with
confidence and trust in us.
3. Know Your Customer – KYC enables banks to
know/understand their customers and their
financial dealings to be able to serve them
better and prudently manage the risks of
Money Laundering and Financing of
CDD-CUSTOMER DUE DILIGENCE
4. KYC/Customer due diligence is an on-going process for prudent banking
practices, therefore the banks are encouraged to:-
Set up a compliance unit with a full time Head.
Set up a system to monitor the accounts and transactions on a regular basis.
Update customer information and records at reasonable intervals.
Chalk out plan of imparting suitable training to the staff of bank periodically.
Maintain proper records of customer identifications and clearly indicate, in
Monitor and check unusually large cash transactions, especially those which are
out of character/ inconsistent with the history.
5. Why kyc?
When does kyc apply?
Are kyc requirements new?
(i) Attested photocopy of national identity card or passport of the
(ii) In case the NIC does not contain a photograph, the bank should
also obtain, in addition to NIC, any other document such as
driver’s license etc that contains a photograph.
(iii) In case of a salaried person, attested copy of his service card, or
any other acceptable evidence of service, including, but not limited
to a certificate from the employer.
(iv) In case of illiterate person, a passport size photograph of the new
account holder besides taking his right and left thumb impression
on the specimen signature card.
Attested photocopies of identity cards of all partners.
Attested copy of “Partnership Deed” duly signed by all partners of
Attested copy of Registration Certificate with Registrar of Firms.
In case the partnership is unregistered, this fact should be clearly
mentioned on the Account Opening form.
Authority letter, in original, in favor of the person authorized to
operate on the account of the firm.
9. Money laundering is the process whereby the
proceeds of crime are transformed into
ostensibly legitimate money or other assets
10. FATF-FINANCIAL ACTION TASK
31 Countries are involved INDIA being one
They came out with recommendation:
Good governance of financial institutions.
Integrity of financial institutions.
11. AML-ANTI MONEY LAUNDERING
PML-PREVENTION OF MONEY
FIU-FINANCIAL INTELLIGENCE UNIT
Set up by each government to keep the track of the
suspicious accounts.(FINANCE MINSTRY)
STR-SUSPICIOUS TRANSCATION REPORT
SCC-SPECIAL CATEGORY CLIENTS
NCCT-NON COOPERATIVE COUNTERIES &
12. HSBC Bank USA Failed to Provide Adequate Staffing and
Other Resources to Maintain an Effective AML Program
HSBC Bank USA Failed to Conduct Due Diligence on HSBC
HSBC Bank USA Failed to Adequately Monitor Wire
13. Change in Leadership and increase in resources. The Bank
hired a new leadership team. In 2011, the Bank spent more
than $244 on its compliance program. The Bank substantially
increased the personnel in its compliance function from 92
full time employees and 25 consultants in 2010 to 880 full
time employees and 267 consultants as of May 2012
Exiting high risk business lines. The Bank exited the
Banknotes business and ended 109 high risk business
Claw Backs. The Bank ‘clawed back’ compensation from
senior company executives.
Banking is defined as accepting for the purpose of lending and investment, deposit of
money from the public repayable on demand and withdraw by cheque , draft order or
An official appointed to investigate individual ‘s complaint
against maladministration especially that of public authorities.
16. Delay and failure in providing necessary banking services and products
like debit cards.
Levying additional charges for the products without informing the
Refusal / delay in accepting payment towards the taxes
Non adherence to the RBI guidelines in the matter of credit and debit cards
Non compliance of interest rates as per guidelines of RBI
Non observance of any other directions or instructions of RBI from time to
Non acceptance of loan application without furnishing valid reasons
Delays in sanction or non observance of prescribed time schedule for
disposal of loan applications
17. The BCSBI would plan, evolve, prepare, develop, promote and publish
voluntary comprehensive codes and standards for banks for providing fair
treatment to their customers.
The proposal for setting up the BCSBI was based on the recommendation
made by the Committee on Procedures and Performance Audit on Public
Services (Tara pore Committee), in its Report No.6 dealing with
Benchmarking, ISO Certification and Performance Audit.
The BCSBI would function as an independent and autonomous watch dog
to monitor and to ensure that the banking codes and standards voluntarily
adopted by banks are adhered to, in true spirit by banks in delivering the
services, as promised, to their customers
18. Basel is the round of deliberations by central bankers from
around the world, and in 1988, the Basel Committee on
Banking Supervision (BCBS) in Basel, Switzerland, published
a set of minimum capital requirements for banks.
This is also known as the 1988 Basel Accord, and was
enforced by law in the Group of Ten (G-10) countries in 1992.
A new set of rules known as Basel II was later developed with
the intent to supersede the Basel I accords.
19. In 1988, the Basel I Capital Accord was created.
The general purpose was to:
1. Strengthen the stability of international
2. Set up a fair and a consistent international
banking system in order to decrease competitive
inequality among international banks.
20. Basel – II norms are based on 3 pillars:
Minimum Capital – Banks must hold capital against
8% of their assets, after adjusting their assets for risk
Supervisory Review – It is the process whereby
national regulators ensure their home country banks
are following the rules.
Market Discipline – It is based on enhanced disclosure
21. Basel – III norms aim to:
Improving the banking sector's ability to
absorb shocks arising from financial and
Improve risk management and governance
Strengthen banks' transparency and
22. In the Basel – II accord, Credit Risk, Market Risk
and Operational Risks were recognized.
Under Basel – II, Credit Risk has three approaches
namely, standardized, foundation internal ratings-based
(IRB), and advanced IRB
Operational Risk has measurement approaches like
the Basic Indicator approach, Standardized approach
and the Advanced Measurement approach.
Better Capital Quality
Notas do Editor
To prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. helps in identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information.
Opening a new account. Opening a subsequent account where documents as per current KYC standards have not been submitted while opening the initial account. 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 the account.
No ! KYC requirements have always been in place and Banks have been taking KYC documents in accordance with the guidelines issued by SBP from time to time. SBP has revisited the KYC guidelines in the context of the recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering Measures and Combating Financing of Terrorism and enhanced the KYC Standards in line with International benchmarks. The Financial Action Task Force (FATF) was established in July 1989 by a Group of Seven (G-7) Summit in Paris, initiated to examine and develop measures to combat money laundering
Customer identification means identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information. Banks need to obtain sufficient information necessary to establish, to their satisfaction, the identity of each new customer whether regular or occasional, and the purpose of the intended nature of banking relationship.
Customer acceptance-Every bank should develop a clear Customer Acceptance Policy laying down explicit criteria for acceptance of customers.( no a/c’s opened on benami name, nature of business activity, location of customer and his clients, mode of payments, volume of turnover, social and financial status etc. to enable categorisation of customers into low, medium and high risk (banks may choose any suitable nomenclature viz. level I, level II and level III). Customers requiring very high level of monitoring, e.g. Politically Exposed Persons (PEPs) may, if considered necessary, be categorised even higher)
a/c’s monitoring- Banks can effectively control and reduce their risk only if they have an understanding of the normal and reasonable activity of the customer so that they have the means of identifying transactions that fall outside the regular pattern of activity.
Risk mgmt- The Board of Directors of the bank should ensure that an effective KYC programme is put in place by establishing appropriate procedures and ensuring their effective implementation. It should cover proper management oversight, systems and controls, segregation of duties, training and other related matters. Responsibility should be explicitly allocated within the bank for ensuring that the bank’s policies and procedures are implemented effectively.
All reasonable efforts shall be made to determine true identity of every prospective customer. The following minimum set of documents must be obtained from various types of customers/ account holder(s).
National industrial credit bank