The Department of Posts recently issued revised guidelines for Anti Money Laundering and Combating Financing of Terrorism (AML/CFT) norms, which is a critical step towards combating money laundering and terrorist financing. These guidelines are intended to protect the integrity of small savings schemes and the security of financial transactions.
Money laundering and terrorist financing pose significant threats to financial systems worldwide. The Department of Posts recognizes the importance of curbing these illegal activities within the Post Office Savings Bank. The Know Your Customer (KYC) and AML/CFT guidelines serve as effective tools to identify and prevent such activities by promoting customer transparency and risk management.
To assess the level of risk associated with customers, the guidelines categorize them based on the amount involved in their transactions.
Customers falling under this category have transactions involving an amount up to ₹50,000, with the total balance in all accounts and savings certificates not exceeding ₹50,000.
Customers falling under this category have transactions involving an amount exceeding ₹50,000 but up to ₹10 lakh, with the total balance in all accounts and savings certificates not exceeding ₹10 lakh.
Customers falling under this category have transactions involving an amount exceeding ₹10 lakh, with the total balance in all accounts and certificates not exceeding ₹10 lakh.
Regardless of the risk category, certain documents are mandatory for all customers. These include:
1. Two (three for business owners) recent passport-size photographs.
2. For joint accounts, photographs of all joint holders must be provided.
3. Aadhaar Number issued by the Unique Identification Authority of India (UIDAI). If an individual does not have an Aadhaar Number, proof of application for enrollment must be furnished within six months of account opening.
4. Permanent Account Number (PAN) or Form 60 as defined in Income Tax Rules, 1962. PAN submission is required if the balance exceeds ₹50,000, the aggregate credits in a financial year exceed ₹1 lakh, or the aggregate withdrawals and transfers in a month exceed ₹10,000.
Customers falling under the high-risk category must submit proof of the source of funds. Acceptable documents may include bank/post office account statements, income tax returns from the last three financial years, sale deeds, gift deeds, wills, or any other document that reflects the income/source of funds.
Section 5: Reporting Obligations
To ensure the detection of suspicious transactions, the guidelines require reporting of the following:
1. Cash transactions exceeding ₹10 lakh.
2. Series of cash transactions within a calendar month that are integrally connected and exceed ₹10 lakh in total.
3. Accounts involving counterfeit currency, forgery of valuable securities, or documents.
4. Attempted transactions involving forged or counterfeit currency, securities, or documents.
5. Suspicious transactions, irrespective of the transaction amount, such as deposits, withdrawals, transfers, solvency certificates, or indemnity certificates.
The Department of Posts' issuance of revised AML/CFT guidelines demonstrates their commitment to combat money laundering and terrorist financing activities within small savings schemes. By implementing these guidelines and ensuring strict compliance, the Department aims to enhance financial security, protect customer interests, and contribute to the overall integrity of the financial system.
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