RBI/2011-12/598
RPCD.CO RRB.RCB. AML.BC.No. 82/03.05.33(E)/2011-12
June 11, 2012
The Chairmen / CEOs of all State and Central Co-operative Banks and Regional Rural Banks
Dear Sir,
Know Your Customer (KYC)/Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) Guidelines – Unique Customer Identification Code (UCIC) for banks’ customers in India
The Reserve Bank of India has been, from time to time, issuing guidelines on KYC/AML/CFT measures. The increasing complexity and volume of financial transactions necessitate that customers do not have multiple identities within a bank, across the banking system and across the financial system. This can be achieved by introducing a unique identification code for each customer. In this regard, a Working Group constituted by the Government of India has proposed the introduction of unique identifiers for customers across different banks and Financial Institutions for setting up a centralized KYC Registry. While setting up such a system for the entire financial system is likely to take quite some time, banks can make an immediate beginning in this regard by having such identification code for their own customers.
2. In this regard, please refer to paragraphs 86 and 87 (extracts enclosed) of Monetary Policy Statement 2012-13 announced on April 17, 2012 on Unique Customer Identification Code for banks’ customers in India. While some banks already use UCICs for their customers by providing them a relationship number, etc., other banks have not adopted this practice. All State and Central Co-operative Banks and Regional Rural Banks are, therefore, advised to initiate steps for allotting UCIC to all their customers while entering into any new relationships for individual customers to begin with. Similarly, existing individual customers may also be allotted unique customer identification code by end-May 2013.
3. The UCIC will help banks to identify customers, track the facilities availed, monitor financial transactions in a holistic manner and enable banks to have a better approach to risk profiling of customers. It would also smoothen banking operations for the customers.
Yours faithfully
(C.D.Srinivasan)
Chief General Manager
Monetary Policy Statement 2012-13
Unique Customer Identification Code for Banks’ Customers in India
86. Availability of a unique customer identification code (UCIC) will help banks to identify a customer, track the facilities availed, monitor financial transactions in various accounts, improve risk profiling, take a holistic view of customer profile and smoothen banking operations for the customer. While some of the Indian banks have already developed UCIC, there is no unique number to identify a single customer across the organisation in many banks. In this regard, the Government of India has already initiated some measures as a working group constituted by them has proposed the introduction of unique identifiers for customers across different banks and financial institutions. While such a system for the entire financial system is desirable, it is likely to take quite some time for a complete roll out. As a first step, banks are advised:
– to initiate steps to allot UCIC number to all their customers while entering into any new relationships in the case of all individual customers to begin with. Similarly, existing individual customers may also be allotted unique customer identification code by end-April 2013.
87. Detailed guidelines in this regard will be issued separately.
If the government was/is at all serious to check: a whole lot of money laundering to and fro from the country; a huge amount of black money floating around in the economy and stashed abroad; security threatening terrorist funding through illegal multi-channels; avoidance of tax paying on a large scale by the smug citizens etc. — than this is the way to go. However, the question arises whether the government is serious enough to do the needful in due time? Or will it take decades or dangerous meltdown of the economy to force an early enforcement of such measures? Concerned view is that the government may prove wanting in the matter. Such measures now being regarded have been there in practice in advanced countries for a long long time for the Indian government to have studied and followed way back, but for some unfathomable reason it seems to have escaped the attention of Indian authorities as usual. We love to move at snail’s pace and as such the much touted reforms by our government become out of synchronisation with the fast changing times, having either outlived their utility or hopelessly proved a failure in our particular circumstances