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ANTI MONEY LAUNDERING

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					     Provisions under
Anti Money Laundering Act
                               Objective

    Implementation of the following norms in the Post
    Offices:

 Know Your Customers (KYC)
 Customer Due Diligence (CDD)



•   For the purpose of implementations of provisions on prevention of Money
    laundering Act, MOF Department of Economic affairs (Budget division) has
    formulated the Prevention of money laundering & combating of financing
    Terrorism in small savings schemes. The above norms are to be applied in Post
    Office transactions.
          Know your customer

• Three risk categories defined

• Norms for each category spelt out.
  Three risk categories : Know your customer
Risk Category       Accounts opened/Certificate
                    purchased with initial deposit



  Low Risk                below Rs.50,000


Medium Risk        between Rs.50,000 to Rs.10 lakh


  High Risk               above Rs.10 lakh
  Low Risk : Norms- Three risk categories : Know your
                                customer

Low Risk Accounts opened/Certificate purchased with initial deposit
                       below Rs.50,000
      Norms                                        Proof
    Photograph                             2 Recent Photographs
                                            (3 in case of EDBO)

  Identity proof      Any one of the following :
                      Electoral Photo identity card, Ration card, Passport, Driving
                      License, POSB identity card, Govt. Identity card, (PPO, BPL, Job
                      card).
                      Note: PAN not mandatory.
  Address proof       Any one of the following :
                      Electoral Photo identity card, Bank/POSB PB, Current
                      electricity bill/telephone bill, certificate from any public
                      authority including area postman GDS or BPM.
  Medium Risk : Norms- Three risk categories :
                       Know your customer

Medium Risk Accounts opened/Certificate purchased with initial
          deposit between Rs.50,000 to Rs.10 lakh
    Norms                                        Proof
  Photograph                            2 Recent Photographs
                                         (3 in case of EDBO)

 Identity proof     Any one of the following :
                    Mandatory : PAN or Declaration in Form 60/61
                    Electoral Photo identity card, Ration card, Passport, Driving
                    License, POSB identity card, Govt. Identity card, (PPO, BPL, Job
                    card).


 Address proof      Any one of the following :
                    Electoral Photo identity card, Bank/POSB PB, Current
                    electricity bill/telephone bill.
    High Risk : Norms- Three risk categories : Know
                             your customer

High Risk Accounts opened/Certificate purchased with initial deposit
                        above Rs.10 lakh
       Norms                              Proof
    Photograph                            2 Recent Photographs
                                           (3 in case of EDBO)
   Identity proof     Any one of the following :
                      Mandatory : PAN or Declaration in Form 60/61
                      Electoral Photo identity card, Ration card, Passport, Driving
                      License, POSB identity card, Govt. Identity card, (PPO, BPL, Job
                      card).
   Address proof      Any one of the following :
                      Electoral Photo identity card, Bank/POSB PB, Current
                      electricity bill/telephone bill.

    Additional        Copy of source of funds and physical verification of address
                      before opening of account.
   requirement
                          FAQs
 Minors - If account/certificate holder is minor, norms are
  applicable to guardians
 Joint Holders- In case of joint holders , norms are applicable
  to all joint account/certificate holders
 KYC documents already submitted - Customer who have
  already submitted KYC documents in any purchase, need not
  to submit these again. Account number/purchase application
  number through which KYC documents were given earlier to
  be mentioned. Note : Name and address of the customer
  should match with earlier KYC Documents.
 Deposit is made through agent - The agent should attest all
  KYC documents. In case of direct investment, self attestation
  or attestation by Gazetted Officer is required.
    Record Keeping: Know your customer
• Record keeping and preservation of
  documents assumes very high significance in
  this exercise.
  – How the documents collected for accounts and
    certificates of various risk categories should be
    handled
  – Preservation of records
              Record keeping : Documents
Post Office   POSB Accounts                Certificates

    HO        KYC documents (including     KYC documents (including received from
              those received from EDBOs    EDBOs) should be attached with Purchase
              or SOs )should be attached   Application Forms and kept in guard files.
              with Account Opening Forms
              and kept in guard files.

    SO        For SB/TD/PPF KYC           KYC documents should be attached with
              documents should be         Purchase Application Forms and kept in
              attached with Account       guard files.
              Opening Form and sent to
              HO and for RD/MIS/SCSS kept
              in guard files.


    BO        KYC Documents should be      KYC Documents should be attached with
              attached with account        Purchase Application form and sent to
              opening form and sent to     Account Office.
              Account Office.
        Record keeping : Documents
Post Office         POSB Accounts and Certificates                Attestation


   HO         One photo should be pasted in Passbook and APM to Attest photograph
              other attached with Account Opening form.  from ID proof.




   SO         One photo should be pasted in the Passbook   SPM to Attest photograph
              and one in the SS Book                       from ID proof.


   BO         One photo should be pasted in the Passbook   BPM to Attest photograph
              and one in the SS Book                       from ID proof.
       Record keeping : Preservation

Record relating of all transactions to be preserved by SBCO    10 years



All Purchase Applications alongwith KYC documents              10 years after
                                                               discharge.


At the time of closure of account, account opening form alongwith KYC documents
should be attached with closure voucher and transferred to SBCO
               Reporting of transactions
Category (Cash Transaction)                      Method of monitoring
All cash transactions exceeding 10,00,000/-
                                                 Prepare list & send to :
All cash transactions in series which are less       •Head of Division on 3rd of following
than 10,00,000/- at a time but are integrated        month.
& total exceeds 10,00,000/- in a month               •Head of the Division to Circle by 5th
                                                     •Head of the Circle to Principal officer
                                                     at Directorate by 8th

Category (Suspected Transaction)                 Method of monitoring
Cash is accepted & Forged or counterfeit
currency notes used or forgery of Security or    Prepare list & send to :
documents                                            •Head of Division on next working day.
                                                     •Head of the Division to Circle by next
Any attempted transaction of Forged or               working day of receipt from PO
counterfeit currency notes used or forgery of        •Head of the Circle to Principal officer
Security or documents                                at Directorate by next working day of
                                                     receipt from Head of the Division.
Suspected transaction
  Definition of Suspicious transaction
• A transaction including an attempted transaction, whether or
  not made in cash which, to a person acting in good faith-
   (i)       gives rise to a reasonable ground of suspicion that it may
             involve proceeds of an offence specified in the schedule to
             the Act regardless of the value involved: or
   (ii)      appears to be made in circumstances of unusual or
             unjustified complexity: or
   (iii)     appears to have no economic rationale or bonafide purpose: or
   (iv)      give rise to a reasonable ground of suspicion that involve
             financing of the activities relating to terrorism;
  (iv)      Transaction includes deposit, w/d, exchange or transfer of funds
             in whatever currency, whether in cash or in cheque payment
             order or other instruments or by electronic or other physical
             means.
   Instructions for existing Accounts/Certificates
             (only in case of suspicion)
                              EXISTING ACCOUNTS

Types of measures to be                      Procedure
         taken
KYC                       In case of difference in Sign., transfer of
                          account and revival of silent accounts, all KYC
                          documents are to be collected
Record keeping            Same as prescribed for new
                          accounts/certificates.
Reporting                 Same as prescribed for new
                          accounts/certificates
Suspected                 Report be sent immediately as prescribed for
transaction               new customer
    Remittances
Domestic/International
                                Objective

    Implementation of the following norms in the Post
    Offices :

 Know Your Customers (KYC)
 Customer Due Diligence (CDD)



•   For the purpose of implementations of provisions on prevention of Money
    laundering Act, MOF Department of Economic affairs (Budget division) has
    formulated the Prevention of money laundering & combating of financing
    Terrorism in money remitance. The above norms are to be applied in Post Office
    transactions.
        Four risk categories : Know your customer
Risk Category          All domestic remittances under
                 MO,iMO,eMO,VPMO,IPO and FPO which are up
                                  to value
  Low Risk                        of Rs.5000/-
Medium Risk           above Rs.5000/- and up to Rs.50,000

Risk Category      All international remittances under money
                    transfer services like Western Union, IFS,
                   Money Order Videsh etc. and any domestic
                            remittance value of which
  High Risk        is above Rs.50,000/- and up to Rs.10 lakh.

Very High Risk                  above Rs.10 lakh.
Low Risk : Norms- Four risk categories : Know your customer
       Low Risk Category All domestic remittances under
MO,iMO,eMO,VPMO,IPO and FPO which are up to value of Rs.5000/-

      Norms                            Proof
    Photograph

   Identity proof

                                 No KYC required.
   Address proof
Medium Risk : Norms- Four risk categories : Know
                       your customer

   Medium Risk Category all domestic remittances under
MO,iMO,eMO,VPMO,IPO and FPO which are up to value above
             Rs.5000/- and up to Rs.50,000

    Norms                                    Proof
 Identity proof   Copy of the following ID Proof for the remitter as well as
                  the payee :
                  PAN Card (ii) Electoral Photo Identity card (iii) Ration Card
                  (iv) Passport, Driving License (v) Any Photo Identity card
                  issued by Central/State Government or PSU.
   High Risk : Norms- Four risk categories : Know your
                                   customer

High Risk Category All international remittances under money transfer
  services like Western Union, IFS, Money Order Videsh etc. and any
 domestic remittance value of which is above Rs.50,000/- and up to
                              Rs.10 lakh.
    Norms                                        Proof
 Identity proof   Copy of the following ID Proof for the remitter as well as the payee :
                  PAN Card (ii) Electoral Photo Identity card (iii) Ration Card (iv)
                  Passport, Driving License (v) Any Photo Identity card issued by
                  Central/State Government or PSU.

 Address proof    Copy of the following address proof for the remitter as well as the
                  payee :
                  Electoral Photo identity card, Bank/POSB PB, Current electricity
                  bill/telephone bill.
  Additional      Copy of source of funds and physical verification of address before
                  opening of account.
 requirement
      Very High Risk : Norms- Four risk categories :
                                  Know your customer

  Very High Risk Category All international remittances under money
transfer services like Western Union, IFS, Money Order Videsh etc. and
 any domestic remittance value of which is above Rs.50,000/- and up
                              to Rs.10 lakh
    Norms                                              Proof
 Identity proof         Copy of the following ID Proof for the remitter as well as the payee :
                        PAN Card (ii) Electoral Photo Identity card (iii) Ration Card (iv)
                        Passport, Driving License (v) Any Photo Identity card issued by
                        Central/State Government or PSU.

 Address proof          Copy of the following address proof for the remitter as well as the
                        payee :
                        Electoral Photo identity card, Bank/POSB PB, Current electricity
                        bill/telephone bill.
Physical Verification   Address of such remitters should be got verified from State
   of address:-         Govt./Gram Panchayat/Postman of that area before acceptance of
                        remittance
                   Record keeping
Post Office         Money Remittances


                    KYC documents should be attached with office copy of
              HO    booking and payment voucher.



                    KYC documents should be attached with office copy of
              SO    booking and payment voucher.
              Reporting of transactions
Category (Cash Transaction)                Method of monitoring

All cash remittances exceeding             Prepare list & send to Head of Division on 3rd of
1000000/-                                  following month.
                                           Head of the Division to Circle by 5th
All cash remittances in series which are   Head of the Circle to Principal officer at
less than 1000000/- at a time but are      Directorate by 8th
integrated & total exceeds 1000000/- in
a month in the name of same
customer.
Category (Suspected Transaction)           Method of monitoring
Cash is accepted & Forged or               Prepare list & send to Head of Division on next
counterfeit currency notes used or         working day.
forgery of Security or documents           Head of the Division to Circle by next working
Any attempted remittance of Forged or      day of receipt from PO
counterfeit currency notes used or         Head of the Circle to Principal officer at
forgery of Security or documents           Directorate by next working day of receipt from
                                           Head of the Division.
               Penalty
• In case of non-implementation of
  AML/CFT norms, a penalty         from
  Rs.10,000 to Rs. 1,00,000 can be
  imposed under PML Act and rules in
  addition to disciplinary action.

				
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