Know
Your Customer (KYC) Norms under Prevention of Money Laundering Act
[RBI
Circular No. 143 dated 16th June 2014]
Sub: Know
Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/ Combating the
Financing of Terrorism (CFT)/ Obligation of Authorised Persons under Prevention
of Money Laundering Act (PMLA), 2002 – Amendment to Section 13(2) – Money
Changing Activities
Please refer to our A.P. (DIR Series) Circular No.17 [A.P. (FL/RL Series) Circular No.04]
dated November 27, 2009 on
‘Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating
the Financing of Terrorism (CFT)/Obligation of Authorised Persons under Prevention
of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money
Laundering (Amendment) Act, 2009 - Money changing activities’, as amended from
time to time.
2. With the enactment of Prevention of Money Laundering (Amendment)
Act, 2012 and amendment to Section 13 of the Act which provides for “Powers of
Director to impose fine”, the section 13(2) now reads as under:
“If the
Director, in the course of any inquiry, finds that a reporting entity or its
designated director on the Board or any of its employees has failed to comply
with the obligations under this Chapter, then, without prejudice to any other
action that may be taken under any other provisions of this Act, he may—
a.
issue a
warning in writing; or
b.
direct such
reporting entity or its designated director on the Board or any of its
employees, to comply with specific instructions; or
c.
direct such
reporting entity or its designated director on the Board or any of its employees, to send reports at such interval as may
be prescribed on the measures it is taking; or
d.
by an
order, levy a fine on such reporting entity or its designated director on the
Board or any of its employees, which shall not be less than ten thousand rupees
but may extend to one lakh rupees for each failure.”
3. In view of the above amendment, Authorised Persons may nominate a
Director on their Boards as “designated Director” to ensure compliance with the
obligations under the Prevention of Money Laundering (Amendment) Act, 2012. 4.
The directions contained in this Circular have been issued under Section 10(4)
and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
also under the, Prevention of Money Laundering Act, (PMLA), 2002, as amended
from time to time and are without prejudice to permission /approvals, if any,
required under any other law.