WITH the Prevention of Money Laundering (Amendment) Act, 2009 (No 21 of 2009) coming into force from June 1, the RBI has advised all NBFCs to maintain records of clients for a period of 10 years from the date of transaction. The NBFCs will have keep records of the Identity of the Clients, both domestic or international, which will permit reconstruction of individual transactions so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity.
However, records pertaining to the identification of the customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, PAN card, utility bills etc.) obtained while opening the account and during the course of business relationship would continue to be preserved for at least 10 years after the business relationship is ended as required under Rule 10.
RBI has further issued detailed guidelines on Customer Due Diligence (CDD) measures to be made applicable to Politically Exposed Person (PEP) and their family members or close relatives. It is further advised that in the event of an existing customer or the beneficial owner of an existing account, subsequently becoming a PEP, NBFCs (including RNBCs) should obtain senior management approval to continue the business relationship and subject the account to the CDD measures as applicable to the customers of PEP category including enhanced monitoring on an ongoing basis.
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CIRCULAR ON ABOVE
RBI/2009-10/ 219
DNBS(PD). CC 163/03.10.042/ 2009- 10 November 13, 2009
All Non-Banking Financial Companies, Residuary Non-Banking Companies
Dear Sir,
Know Your Customer (KYC) Guidelines / Anti-Money Laundering (AML) Standards `
1. Please refer to the Master Circular No. 151 dated July 01, 2009 on the captioned subject. All NBFCs (including RNBCs) are advised to take note of modifications to the above circular as under:
Accounts of Politically Exposed Persons (PEPs)
2. Detailed guidelines on Customer Due Diligence (CDD) measures to be made applicable to Politically Exposed Person (PEP) and their family members or close relatives are contained in Annex II to the Master Circular No.151/03.10. 42/2009-10 dated July 1, 2009. It is further advised that in the event of an existing customer or the beneficial owner of an existing account, subsequently becoming a PEP, NBFCs (including RNBCs) should obtain senior management approval to continue the business relationship and subject the account to the CDD measures as applicable to the customers of PEP category including enhanced monitoring on an ongoing basis.
Principal Officer
3. NBFCs (including RNBCs) have been advised in Para 10 of Annex I to the above said Master Circular dated July 1, 2009 that NBFCs (including RNBCs) should appoint a senior management officer to be designated as Principal Officer and the role and responsibilities of the Principal Officer have been detailed therein. With a view to enable the Principal Officer to discharge his responsibilities, it is advised that the Principal Officer and other appropriate staff should have timely access to customer identification data and other CDD information, transaction records and other relevant information. Further, NBFCs (including RNBCs) should ensure that the Principal Officer is able to act independently and report directly to the senior management or to the Board of Directors.
Yours faithfully,
(A. Narayana Rao)
Chief General Manager In-Charge
