Page 144 - DMGT303_BANKING_AND_INSURANCE

Unit 7: KYC Norms and Anti Money Laundering

2. All customers not falling under the category of .................................... Risks are to be classified Notes
under Low Risk category.
3. Risk in various accounts will be based on: (I) ......................................., (II) Type of products
and services availed by the customer, and (III) Country where the customer is domiciled.
4. ........................................ will be classified into three risk categories namely High, Medium
and Low, and Negligible based on the risk perception.
5. The technological advancements have helped money launderers to adopt innovative means
and move funds faster across continents making .......................................... action much more
difficult.

7.3 Monitoring of Transactions

Monitoring of transactions will be conducted taking into consideration the risk profile of the
account. Special attention will be paid to all complex, unusually large transactions and all
unusual patterns, which have no apparent logical or visible lawful purpose. Transactions that
involve large amounts of cash inconsistent with the normal and expected activity of the customer
will be subjected to detailed scrutiny.
After due diligence at the appropriate level in the Bank, transactions of suspicious nature and/
or any other type of transaction notified under PML Act, 2002 will be reported to the appropriate
authority and a record of such transactions will be preserved and maintained for a period as
prescribed in the Act.
Branches would be maintaining a close watch on cash transactions (whether deposits or
withdrawals) of Rs. 10 lakh and above in all deposit and loan accounts and recording the same
separately in the prescribed register. Besides, the branches would also be reporting all cash
transactions of Rs. 10 lakh and above with full details to their controlling offices through a
periodical statement, on fortnightly basis. The controlling offices would scrutinize the same
and, if required, make enquiries from the branches in case the cash deposit/withdrawal is not in
consonance with the known profile of the customer and follow up with the branches till logical
end. In case, the controlling offices find that the report is in order, no further action would be
taken and the designated officer in RO/ZO would close the report.

Risk Management

Concurrent/Internal Auditors shall specifically check and verify the application of KYC/AML
procedures at the branches and comment on the lapses observed will be put up before the Audit
Committee of the Board at quarterly intervals. The Principal Officer designated by the Bank in
this regard will have an important responsibility in managing oversight and coordinating with
various functionaries in the implementation of KYC/AML policy.

Did u know? Branches would used to reporting all cash transactions of Rs. 10 lakh and
above with full details to their controlling offices through a periodical statement, on
fortnightly basis.

Action Points

1. Customer education: The Banks should spread awareness on KYC, Anti-Money Laundering
measures and the rationale behind them amongst the customers.

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