Banks not carrying out customer due diligence: RBI

In the wake of alleged money laundering cases, the Reserve Bank of India (RBI) investigation observed that banks were not carrying out customer due diligence as required under KYC norms while selling third party products. At the same time, it proposed a set of measures based on the investigation report already submitted.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
Real-time Stock quotes, portfolio, LIVE TV and more.
GeStepAhead SME Special
moneycontrol.com

Home » News » Business

May 03, 2013, 03.12 PM | Source: Moneycontrol.com

Banks not carrying out customer due diligence: RBI

In the wake of alleged money laundering cases, the Reserve Bank of India (RBI) investigation observed that banks were not carrying out customer due diligence as required under KYC norms while selling third party products. At the same time, it proposed a set of measures based on the investigation report already submitted.

Like this story, share it with millions of investors on M3

Banks not carrying out customer due diligence: RBI

In the wake of alleged money laundering cases, the Reserve Bank of India (RBI) investigation observed that banks were not carrying out customer due diligence as required under KYC norms while selling third party products. At the same time, it proposed a set of measures based on the investigation report already submitted.

Post Your Comments

Share Cancel

Moneycontrol Bureau

In the wake of alleged money laundering cases, the Reserve Bank of India (RBI) investigation observed that banks were not carrying out customer due diligence as required under KYC norms while selling third party products. At the same time, it proposed a set of measures based on the investigation report already submitted.

The investigation, according to the RBI annual policy statement , has underscored the need for better regulatory compliance by banks as well. The central bank will issue draft guidelines on wealth management services offered by banks by end-June, 2013. Wealth management services (WMS) generally include referral services, investment advisory services (IAS) and portfolio management services (PMS). Detailed guidelines will be issued by end-June 2013.

Key RBI measures in terms of KYC/AML: 

  1. Carry out customer due diligence as required under extant KYC/AML/CFT guidelines wherever third party products are sold as agents.
  2. Mmaintain details of third party products sold and related records for a period and in the manner as prescribed in the KYC/AML/CFT guidelines
  3. File Cash Transaction Reports (CTRs) or Suspicious Transaction Reports (STRs) wherever required, under the extant KYC/AML/CFT guidelines while marketing and distributing third party products as agents.
Other measures:

  1. To ensure segregation of the marketing function from the approval/transactional process at bank branches;
  2. To ensure that its employees do not receive cash/non-cash incentives directly from insurance companies, mutual funds and other third party product providers;
  3.  To have a board approved policy to avoid mis-selling and conflict of interest in marketing and distribution of own or third party financial products.

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
Banks not carrying out customer due diligence: RBI

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login