Income Proof mandatory for investment in Post office small saving schemes
SB Order No. 12 12023 Dated:25.05.2023
Revision of Know Your Customer (KYC) / Anti Money Laundering (AML) / Combating the Financing of Terrorism (CFT) norms in respect of POSB
Master Circular No. I on AML/CFT norms applicable for Small Savings Schemes has been circulated in SB Order No.l4D0l2 dated 09.10.2012.
2. Department Economic Affairs, Ministry of Finance has notified Govt. Savings Promotion General Rules 2018 (GSPR 2018) and National Savings Schemes Rules 2019 which have been implemented from 18.12.2019. GSPR 2018 prescribes the mandatory documents and other optional documents to be obtained from the depositors.
3. After implementation of CBS, the process of reporting of transactions has also got changed.
4. Further, in order to comply with the guidelines of Financial Intelligent Unit - India (FIU-IND) and Financial Action Task Force (FATF), it has been decided to issue revised guidelines on AML/CFT norms to be followed in the post offices in respect of National (Small) Savings Schemes and accordingly, Master Circular No. 2 of KYC I Al\il- I CFT norms is attached herewith. This will supersede all previous orders issued on the subject,
5. Appendix I of POSB (CBS) Manual (Connected up to 31.12.2021) is amended and the contents of Master Circular No. 2 which is attached herewith shall be the amended text.
6. This may be circulated to all the Offices for information and necessary actions.
7. This is issued with the approval of competent authority.
Introduction
- Know Your Customer (KYC) Norms/Anti Money Laundering (AML) Measure/Combating Financing of Terrorism (CFT)/Obligations under PMLA, 2002 (amended from time to time)
The objective of KYC/AMUCFT guidelines is to prevent money laundering or terrorist financing activities by use of Post Office Savings Bank intentionally or unintentionally by criminal elements. KYC procedures also enable to post office Savings Banks to know/understand their customers better which in tum help them manage their risks prudently.
- Definition of Customer
For the purpose of KYC policy, a customer is defined as:
. An individual that maintains an account and/or has a cash certificate or has a business relationship with the Post Office Savings Bank.
. An individual on whose behalf the account is maintained (i.e beneficial owner).
2. Guidelines
2.1 General
All Post Office Savings Banks should keep in mind that information collected from the customer for the purpose of opening of account or purchase of savings certificates is to be treated as confidential and details thereof are not to be divulged for cross selling or any other purposes.
2.2 KYC Policy
Under PMLA provisions, Post Office Savings Bank declares its KYC Policy on the following four elements:
(a) Customer Acceptance Policy.
(b) Risk Management
(c) Customer Identification Procedure.
(d) Monitoring of Transactions; Record keeping and Reporting.
2.3 Customer Acceptance Policy (CAP)
(i) No account is opened in anonymous or fictitious name,/benami.
(ii) Not to open an account or close an existing account where the Post Office Savings Bank is unable to apply appropriate Customer Due Diligence measures i.e unable to verify the identity and/or obtain documents required as prescribed due to non- cooperation of the customer or non-reliability of data/information furnished by the customer. However, the customer should not be harassed and any decision to close the account should be taken by head of the Postal Division by giving suitable notice to the customer.
2.4 Categorization of Customers i,e. Risk categorization.
2.4.1 All customers according to the amount involved at the time of opening of account or purchase of Savings Certificates or credit into an existing account have been categorized with the perspective of risk involved. The categorization is as under:
(i) Low Risk
Where the customer opens account or applies for purchase of certificates or applies for credit of maturity/prematurity value of any existing savings instrument with an amount up to (50,000/and balance in all accounts and savings certificates does not exceed Rs.50,000/-
(ii) Medium Risk
Where the customer opens account or applies for purchase of certificates or applies for credit of maturity/prematurity value of any existing savings instrument with an amount exceeding t 50,000/- but up to Rs.10 lakh and balance in all accounts and savings certificates does not exceed Rs.10 lakh.
(iii) High Risk
Where the customer opens account or applies for purchase of certificates or applies for credit of maturity/prematurity value of any existing savings instrument with an amount exceeding Rs.10 lakh and balance in all accounts and certificates does not exceed Rs.10 lakh.
Note l: Politically Exposed Persons (PEPs) are individuals who are or have been entrusted with prominent public functions by a foreign country, including the Heads of State/Governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations and important political party officials. The accounts related to Politically Exposed Persons (PEPs) residing outside India shall fall under High Rlsk Category.
For full Customer identification Procedure, click on below link.