Provisions under Anti Money Laundering Act

1. Provisions under Anti Money Laundering Act

2. 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, 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. Know your customer • Three risk categories defined • Norms for each category spelt out.

4. Three risk categories : Know your customer

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

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

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

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. • 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.

9. Record Keeping: Know your customer • Record keeping and preservation of documents assumes very high significance in this exercise. • How the documents collected for accounts and certificates of various risk categories should be handled • Preservation of records

10. Record keeping : Documents

11. Record keeping : Documents

12. Record keeping : Preservation

13. Reporting of transactions

14. 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 • give rise to a reasonable ground of suspicion that involve financing of the activities relating to terrorism; • 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.

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

16. RemittancesDomestic/International

17. 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, MOF Department of Economic affairs (Budget division) has formulated the Prevention of money laundering & combating of financing Terrorism in money remitance. The above norms are to be applied in Post Office transactions.

18. Four risk categories : Know your customer

19. Low Risk : Norms- Four risk categories : Know your customer

20. Medium Risk : Norms- Four risk categories : Know your customer

21. High Risk : Norms- Four risk categories : Know your customer

22. Very High Risk : Norms- Four risk categories : Know your customer

23. Record keeping

24. Reporting of transactions

25. 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.