Anti-Money Laundering Guidelines

In view of the increased concerns regarding money laundering activities and to prevent AMCs from being misused for such activities, Reserve bank of India has formulate suitable policies and procedures in this regard. To enable AMCs to put in place the policy framework and systems for prevention of money laundering while undertaking money changing transactions, the Reserve Bank has brought out detailed Anti-Money Laundering (AML) guidelines.

The purpose of prescribing Anti-Money Laundering Guidelines is to prevent the system of Authorised Money Changers (AMCs) engaged in the purchase and / or Sell of foreign currency notes/Travelers cheques from being used for money laundering. Therefore, Anti-Money Laundering (AML) measures should include a) Identification of Customer according to “Know Your Customer” norms, b) Recognition, handling and disclosure of suspicious transactions, c) Appointment of Money Laundering Reporting Officer (MLRO), d) Staff Training, e) Maintenance of records, f) Audit of transactions.

The following are broad guidelines to enable AMCs to formulate and put in place a proper policy framework for AML measures. Know Your Customer (KYC) – Identification of Customers All transactions should be undertaken only after proper identification of the customer. Photocopies of proof of identification should invariably be retained by the AMC after verifying the document in original. Full details of name and address as well as the details of the identity document provided should also be kept on record. if a transaction is being undertaken on behalf of another person, identification evidence of all the persons concerned should be obtained and kept on record.

Reserve Bank of India Statutes

Purchase

Purchase of Foreign Exchange

  1. For encashment of foreign currency notes and/or Travelers Cheques upto USD 500 or its equivalent, production of passport need not be insisted upon and any other suitable document of identification like ration card, driving licence etc. can also be accepted.
  2. For verification of the identity of customer for encashment in excess of USD 500 or its equivalent, a photo identity document such as passport, driving licence, PAN Card, voter identity card issued by the Election Commission, etc. should be obtained.
  3. $_GETs for payment of Sell proceeds in cash may be acceded to the extent of USD 1000 or its equivalent per transaction. All encashment within one month may be treated as single transaction for the purpose. In all other cases AMCs should make payment by way of "Account Payee" cheque / demand draft only.
  4. Where the amount of forex tendered for encashment by a non-resident or a person returning from abroad exceeds the limits prescribed for Currency Declaration Form (CDF), the AMC should invariably insist for production of declaration in CDF.

Sales

In all cases of Sell of foreign exchange, irrespective of the amount involved, for identification purpose the passport of the customer should be insisted upon. The Sell of forex should be made only on personal application and identification. Payment in excess of Rs. 50,000/- towards Sell of foreign exchange should be received only by account payee cheque / demand draft. All purchases by a person within one month may be treated as single transaction for the purpose. Encashment Certificate, wherever required, should also be insisted upon.For more detailed information you can visit RBI Site at WWW.RBI.gov.in

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