The document discusses Know Your Customer (KYC) norms and their importance. It begins by stating the session objectives of explaining the significance of KYC norms and why banks need to comply with them. It then provides examples of identity theft, credit card fraud, and money laundering to illustrate the risks banks face and why KYC procedures are necessary to prevent illicit transactions, money laundering, and terrorist financing. The document emphasizes that KYC norms issued by the Reserve Bank of India are aimed at arresting these criminal activities. It also notes exceptions for "no frills" accounts that have stricter limits on balances and credit amounts.

2. Session Objectives
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After this session you will be able to…
• Explain the significance of KYC Norms.
• State the reasons banks need to comply with KYC Norms.

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Know Your Customer
Designed by Lexiconn 311/08/2019
Hi, I wish to
open a savings
account in
your bank.
Ma’am you need
to fill out a form.
And submit your
address and
identity proofs
What is KYC?

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Where is KYC?
KYC guidelines are issued Under the section 35(A) of the
Banking Regulation Act by the Reserve Bank of India
Read them

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Why KYC?
On 22 February, Raj Sharma, a Mumbai-based
marketing professional, received an SMS from his
bank. It read that a transaction for Rs. 50,000 had
taken place through his credit card. Raj later realised
that his credit card has been stolen. After thorough
police investigation his perpetrator was arrested
under the section 420.
Read the scenario

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Why KYC?
As per the Deloitte Indian Banking Fraud Survey report published in April 2015
Banks are most susceptible to the following three fraud risks
Internet banking and ATM fraud
e-banking (credit card, debit card etc.)
Identity theft

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Why KYC?
RBI has advised banks to make the Know Your Customer (KYC)
procedures mandatory.
Illicit Transactions Money Laundering Terrorist Financing
Fund proceedings carried out through stolen credit/debit cards, counterfeit cheque
etc… to cheat the account holder and the bank.

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Activity - I
Task:
• Download the given handout.
• Read the different types of frauds.
• Discuss what steps will you take against them.
• Share your answers with the class.
Objective: Explain the different types of common frauds
Time: 20 Mins Type: Individual

9. 1. Collect all possible evidence. For example, details like
number from which you received the call. Also, the date
and time on which the call was received.
2. Block all your debit or credit cards immediately and get a
replacement.
3. Inform the bank about the phishing call.
4. Report a complaint to the cyber crime cell.
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Answer
Steps to take against fraudulent callers

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Why KYC?
RBI has advised banks to make the Know Your Customer (KYC)
procedures mandatory.
Illicit Transactions Money Laundering Terrorist Financing
Act of obtaining money from illegal sources and disguising them as legitimate.

11. ACTIVITY - II
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Task:
• Read about the various reasons that led to the downfall
of Kingfisher Airlines here.
• Discuss how banks are being used in such frauds
Objective: Explain the different aspects of a money laundering case
Time: 60 Mins Type: Individual/Group

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Why KYC?
RBI has advised banks to make the Know Your Customer (KYC)
procedures mandatory.
Illicit Transactions Money Laundering Terrorist Financing
Act of funding terrorist activities.

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Why KYC?
This statistics are reported by the State Department of United States in the year 2012

14. Why KYC?
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In order to arrest these criminal activities, it is imperative that
banks follow the KYC Norms
However!

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No Frill Accounts
Balances of customers holding these
accounts cannot exceed Rs. 50,000
(FDR/CA/SB) taken together.
Also, their total credit summation in
all the accounts taken together
cannot exceed Rs. 1 Lakh in a year.

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Quick Summary

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18. • Any Questions
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