KYC enables banks to understand their customers and financial dealings to serve them better. Under banking law, KYC helps banks establish customer identity, obtain information on business/funds, and prevent money laundering. KYC applies when opening accounts, updating information, applying for loans/credit cards/lockers, or investing in mutual funds. Banks must keep customer information confidential, ensure large remittances are from customer accounts, and not pay old checks. Banks must follow risk management policies including customer risk profiles, identification procedures, transaction monitoring, and implement controls like reporting suspicious transactions and record keeping. KYC implementation is mandatory and banks can face penalties for non-compliance.

3. - KYC enables banks
to know/ understand their customers and their
financial dealings to be able to serve them better.

5. Under sec.35(A)
of the Banking
Regulation Act,
1949.


6. • To establish the identity of the customer.
• To ensure that sufficient information is
obtained on the nature of customer's
business and sources of fund for the
purpose of opening the account.
• To prevent banks from being used,
intentionally or unintentionally by criminal
elements for money laundering services.

7. When does
KYC
apply?
Opening a new account.
Updating of informations.
Applying for a loan.
Applying for credit card. Opening a locker facility.
Investing in mutual
fund.

8.  Banks should treat the Informations collected from the
customers confidential.
 Banks should ensure that any remittance of funds above
Rs.50,000 is effected by debit to customers account.
 Banks should not make payment of cheques,drafts,etc if
the customers present it after the period of six months.
 Banks should ensure that the provision of foreign
regulation act,2010, wherever applicable, are strictly
adhered to.

9. CUSTOMER
ACCEPTANCE
POLICY
CUSTOMER
IDENTIFICATION
PROCEDURES
MONITORING
OF
TRANSACTIONS
RISK
MANAGEMENT

10. RISK PROFILE OF DIFFERENT CATRGORIES OF CUSTOMERS:
 Salaried group - LOW RISK
 Businessman - MEDIUM RISK
 Customers operates through agents - HIGH RISK

11. customers are required to submit the following documents :
Identity
proof
Address
proof
Voter's identity card
PAN card
Passport
Driving license
Ration card
Adhar card
Phone bill
Electricity bill
Letter from employer
Bank statement
Ration card

12.  ATTENTION ON LARGE AMOUNT OF DEPOSITS
 EYE ON TRANSACTIONS OF CUSTOMERS

13. Internal control system and internal audit.
 Identification and reporting of suspicious
transactions.
 Record keeping.

14. IMPEMENTATION
IS MANDATORY FAILURE PENALITY DISCLOSE
If a customer does
not corporate