Provisions under Anti Money Laundering Act

3(a).1

Objective

Implementation of the following norms in the Post Offices:

Know Your Customers (KYC)Customer Due Diligence (CDD) • For the purpose of implementations of provisions on

prevention of Money laundering Act 2002 & CFT, MOF Department of Economic affairs (Budget division) has formulated the Prevention of money laundering & combating of financing Terrorism in small savings schemes. The above norms are to be applied in Post Office transactions.

3(a).2

Know your customer

• Three risk categories defined

• Norms for each category spelt out.

3(a).3

Three risk categories : Know your customer

Risk Category Accounts opened upto amount / Certificate purchased upto amount / Balance in all accounts and savings certificates upto

Low Risk Up to Rs.50,000

Medium Risk Exceeding Rs.50,000 and up to Rs.10 lakh

High Risk Exceeding Rs.10 lakh and balance in all accounts and certificate does not

exceed Rs 10 lakh

3(a).4

Low Risk : Norms- Three risk categories : Know your customer

1.8.5

Low RiskAccounts opened upto amount / Certificate purchased upto amount / Balance in all accounts and savings certificates upto amount below Rs.50000/-

Norms Proof

Photograph 1 Recent Photographs (2 in case of EDBO)

Identity proof Any one of the following :Electoral Photo identity card, Ration card with photograph, Passport, Driving License, POSB identity card, PO ID card, Govt. Identity card, (PPO, BPL, Job card), Aadhar Card (UIDAI), Identity card issued by schools and colleges.

Address proof Any one of the following :Electoral Photo identity card, Bank/POSB-PB/Current electricity bill/telephone bill (Not more than 3 months old), certificate from any public authority including area postman GDS or BPM, letter issued by UIDAI

Medium Risk : Norms- Three risk categories : Know your customer

1.8.6

Medium Risk Accounts opened upto amount / Certificate purchased upto amount / Balance in all accounts and savings certificates upto amount between Rs.50000/- to Rs.10 lakhs

Norms Proof

Photograph 1 Recent Photographs (2 in case of EDBO)

Identity proof Any one of the following :Mandatory : PAN or Declaration in Form 60/61Electoral Photo identity card, Ration card with photograph, Passport, Driving License, POSB identity card, PO ID card, Govt. Identity card, (PPO, BPL, Job card), Aadhar Card (UIDAI), Identity card issued by schools and colleges.POSB identity card, Govt. Identity card, (PPO, BPL, Job card), PAN card

Address proof Any one of the following :Electoral Photo identity card, Bank/POSB-PB/Current electricity bill/telephone bill (Not more than 3 months old), certificate from any public authority including area postman GDS or BPM, letter issued by UIDAI

High Risk : Norms- Three risk categories : Know your customer

1.8.7

High Risk Accounts opened upto amount / Certificate purchased upto amount / Balance in all accounts and savings certificates upto amount above Rs.10 lakhs

Norms ProofPhotograph 1 Recent Photographs

(2 in case of EDBO)

Identity proof Any one of the following :Mandatory : PAN or Declaration in Form 60/61Electoral Photo identity card, Ration card with photograph, Passport, Driving License, POSB identity card, PO ID card, Govt. Identity card, (PPO, BPL, Job card), Aadhar Card (UIDAI), Identity card issued by schools and colleges.POSB identity card, Govt. Identity card, (PPO, BPL, Job card), PAN card

Address proof Any one of the following :Electoral Photo identity card, Bank/POSB-PB/Current electricity bill/telephone bill (Not more than 3 months old), letter issued by UIDAI

Additional requirement

Copy of source of funds is necessary

Note : If interest on SCSS is exceeding Rs.10000 in a year and declaration in form 15G & 15H is not given , PAN Card is mandatory

FAQs Minors - If account/certificate holder is minor, norms are

applicable to guardians Joint Holders- In case of joint holders , norms are applicable to

all joint account/certificate holders KYC documents already submitted - Customer who have

already submitted KYC documents in any purchase, need not to submit these again. Account number/purchase application number through which KYC documents were given earlier to be mentioned. Note : Name and address of the customer should match with earlier KYC Documents.

Deposit is made through agent - The agent should attest all KYC documents. In case of direct investment, self attestation or attestation by Gazetted Officer is required.

3(a).8

FAQs Minors - If account/certificate holder is minor, norms are applicable

to guardians Joint Holders- In case of joint holders , norms are applicable to all

joint account/certificate holders KYC documents already submitted - Customer who have already

submitted KYC documents in any purchase, need not to submit these again. Account number/purchase application number through which KYC documents were given earlier to be mentioned. Note : Name and address of the customer should match with earlier KYC Documents. The Supervisor to pass the remarks “KYC documents already submitted vide A/C No./Regn. No.___dated____”

Deposit is made through agent - The agent should also attest all KYC documents. In case of direct investment, self attestation or attestation by Gazetted Officer is required.

Mandatory : “KYC documents Verified and attached” needs to be written by the Supervisor on account opening form or purchase application

1.8.9

Record keeping : Documents

1.8.10

Post Office POSB Accounts Certificates

HO KYC documents (including those received from EDBOs should be attached with Account Opening Forms or kept in guard files

KYC documents (including received from EDBOs) should be attached with account opening or purchase application forms and kept in guard files.

SO RD/MIS/SCSS should be kept with account opening form or purchase application

SB/TD/PPF KYC documents should be kept in guard files.

KYC documents should be attached with account opening or purchase application forms and kept in guard files.

BO KYC Documents should be attached with account opening form and sent to Account Office.

KYC Documents should be attached with account opening or purchase application form and sent to Account Office.

Record keeping : Documents

1.8.11

Post Office POSB Accounts and Certificates Attestation

HO Photo attached with Account Opening form or purchase application

APM to Attest photograph from ID proof.

SO Photo should be pasted in the SS Book (In case of SB/TD/PPF). In other cases i.e. RD/MIS/SCSS, pasted in A/C opening form .

SPM to Attest photograph from ID proof.

BO Two. One photo should be pasted in the SS Book and one in account opening form.

BPM to Attest photograph from ID proof.

Note : In case of SCSS two photographs are mandatory i.e. one for application form and another for Passbook

Record keeping : Preservation

1.8.12

Record relating of all transactions to be preserved by SBCO 5 years

All Purchase Applications along with KYC documents 5 years after discharge.

At the time of closure of account, account opening form along with KYC documents should be attached with closure voucher and transferred to SBCO

Reporting of transactionsCategory (Cash Transaction) Method of monitoring

All cash transactions exceeding 10,00,000/-Prepare list & send to :

•Head of Division on 3rd of following month.•Head of the Division to Circle by 5th •Head of the Circle to Principal officer at Directorate by 8th

All cash transactions in series which are less than 10,00,000/- at a time but are integrated & total exceeds 10,00,000/- in a month

Category (Suspected Transaction) Method of monitoring

Cash is accepted & Forged or counterfeit currency notes used or forgery of Security or documents

Prepare list & send to :•Head of Division on next working day.•Head of the Division to Circle by next working day of receipt from PO •Head of the Circle to Principal officer at Directorate by next working day of receipt from Head of the Division.

Any attempted transaction of Forged or counterfeit currency notes used or forgery of Security or documents

Suspected transaction

3(a).12

Definition of Suspicious transaction

• A transaction including an attempted transaction, whether or not made in cash which, to a person acting in good faith-(i) gives rise to a reasonable ground of suspicion that it

may involve proceeds of an offence specified in the schedule to the Act regardless of the value involved: or

(ii) appears to be made in circumstances of unusual or unjustified complexity: or

(iii) appears to have no economic rationale or bonafide purpose: or

(iv) give rise to a reasonable ground of suspicion that involve financing of the activities relating to terrorism;

(v) Transaction includes deposit, w/d, exchange or transfer of funds in whatever currency, whether in cash or in cheque , payment order or other instruments or by electronic or other physical

means.

3(a).13

Instructions for existing Accounts/Certificates (only in case of suspicion)

EXISTING ACCOUNTS

Types of measures to be taken

Procedure

KYC A printed notice will be handed over to the depositor / messenger at the time of next transaction (deposit / withdrawal) after receipt of this SB Order

In case of RD accounts opened through agents, the ID and Address proof should also be attested by agent concerned

CDD/KYC documents are also required to be taken in the existing accounts in case of Transfer of account, revival of silent account or when depositor’s signatures not matched with existing specimen

1.8.15

Instructions for existing Accounts/Certificates (only in case of suspicion)

EXISTING ACCOUNTS

Types of measures to be taken

Procedure

KYC Depositors or certificate holders to be served notice to furnish KYC. If he does not furnish KYC upto 3rd transaction, 4th transaction will not be allowed.

In case of fresh investment, the photocopy of existing passbook, certificate to be enclosed with application form

Transfer / revival of account to be allowed only if he furnishes the KYC

Transfer of maturity amount to be allowed only if he furnishes the KYC

If the existing account is closed, fresh KYC are to be taken

1.8.16

Instructions for existing Accounts/Certificates (only in case of suspicion)

EXISTING ACCOUNTS

Types of measures to be taken

Procedure

KYC In case of prospective customer living with relative, the customer should give ID proof and address proof of relative followed by relative’s self-declaration that prospective customer stays with him

In case the depositor does not co-operate in furnishing KYC, the matter should be reported to Divisional Supdt. who will order closure of this A/C and inform depositor of taking such decision.

Record keeping Same as prescribed for new accounts/certificates

Reporting Same as prescribed for new accounts/certificates

Suspected transaction

Report be sent immediately as prescribed for new customer

1.8.17

Penalty

• In case of non-implementation of AML/CFT norms, a penalty from Rs.10,000 to Rs. 1,00,000 can be imposed under PML Act and rules in addition to disciplinary action.

3(a).15