Details of AML/ KYC Norms
Sharmaji : Hello Vinodji, how are you?
Vindoji : Hello Sharmaji, I am doing well, thank you. How can I help you today?
Sharmaji : I would like to understand the Know Your Customer (KYC) and Anti Money Laundering (AML) procedures in details. Would you be able to guide me?
Vindoji : Certainly. The KYC and AML Norms are followed by all Banks & Housing Finance Companies to prevent themselves from being used intentionally or unintentionally by criminal elements for Money Laundering Activities. Also, they need to know and understand their customers as well as their financial dealings for Risk Management.
Sharmaji : I understand. Please tell me more about Money Laundering.
Vindoji : Money Laundering is any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources. In layman terms “Conversion of Black money into White”.
Sharmaji : How do the Banks & Housing Finance Companies get to know their customers?
Vindoji : The Banks & Housing Finance Companies follow a Client Identification Procedure. They verify the identity of their customers using reliable and independent source of documents, data or information. The necessary documents and information are taken to verify the customer’s identity, current and permanent address, nature of business and financial status. They also maintain records of the identity of customer as per the regulatory requirement. Further, Ongoing Monitoring of Transactions such as unusual transactions, cash transactions and suspicious transactions is also an essential element of effective KYC procedure.
Sharmaji : What are the documents required to be obtained from the customer for KYC compliance?
Vindoji : For Photo Id Proof any one of the following is required:
1. PAN Card
3. Voters ID Card
4. Driving License
5. Aadhar Card
For Residence Proof any one of the following is required:
1. Utility bill such as Telephone Bill, Electricity Bill, Piped Gas Bill and Post Paid Mobile Bill
2. Ration Card
3. Letter from Employer
4. Bank Statement / Passbook with address
5. Valid Rent Agreement
6. Sale Deed
Sharmaji : Thank you Vinodji for your guidance.