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Know Your Customer

Shell banks are prohibited from operating in India as they have no physical presence. Banks should refuse relationships with shell banks. Money mules launder funds for criminals by receiving deposits or transfers then transferring the money minus a commission. They are often recruited through ads and may have their accounts suspended if caught. Strict KYC and AML standards help protect banks and customers from such fraudsters.

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69 views1 page

Know Your Customer

Shell banks are prohibited from operating in India as they have no physical presence. Banks should refuse relationships with shell banks. Money mules launder funds for criminals by receiving deposits or transfers then transferring the money minus a commission. They are often recruited through ads and may have their accounts suspended if caught. Strict KYC and AML standards help protect banks and customers from such fraudsters.

Uploaded by

deepusandy7791
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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KNOW YOUR CUSTOMER (KYC) NORMS / ANTI-MONEY LAUNDERING (AML) STANDARDS (RECENT UPDATES) Shell Bank: Shell Bank

is a bank which is incorporated in a country where it has no physical presence and is unaffiliated to any regulated financial group. Shell banks are not permitted to operate in India. Banks should refuse to enter into a correspondent relationship with a shell bank M!ne" #$le%: Money mules can be used to launder the proceeds of fraud schemes ( e.g., phishing and identity theft) by criminals who gain illegal access to deposit accounts by recruiting third parties to act as money mules. In some cases these third parties may be innocent while in others they may be ha ing complicity with the criminals. In a money mule transaction! an indi idual with a bank account is recruited to recei e che"ue deposits or wire transfers and then transfer these funds to accounts held on behalf of another person or to other indi iduals! minus a certain commission payment. Money mules may be recruited by a ariety of methods! including spam e#mails! ad ertisements on genuine recruitment web sites! social networking sites! instant messaging and ad ertisements in newspapers. $hen caught! these money mules often ha e their bank accounts suspended! causing incon enience and potential financial loss! apart from facing likely legal action for being part of a fraud. Many a times the address and contact details of such mules are found to be fake or not up to date! making it difficult for enforcement agencies to locate the account holder. %BI has ad ised banks to strictly adhere to the guidelines on &now 'our (ustomer (&'() norms ) *nti# Money +aundering (*M+) Standards)(ombating of ,inancing of -errorism ((,-) in order to protect themsel es and their customers from misuse by such fraudsters. S#all A&&!$n'%: .Small account. means a sa ings account in a banking company where (i) the aggregate of all credits in a financial year does not e/ceed rupees one lakh0 (ii) the aggregate of all withdrawals and transfers in a month does not e/ceed rupees ten thousand0 and (iii) the balance at any point of time does not e/ceed rupees fifty thousand. -he 12I (Ministry of ,inance) also e/panded the definition of .officially alid document3 for opening .small accounts. to include 4ob card issued by 5%61* duly signed by an officer of the State 1o ernment or the letters issued by the 7ni"ue Identification *uthority of India containing details of name! address and *adhaar number.

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