RBI/DBR/2015-16/18

Master Direction DBR.AML.BC.No.81/14.01.001/2015-16

February 25, 2016
(Updated as on November 06, 2024)
(Updated as on January 04, 2024)
(Updated as on October 17, 2023)
(Updated as on May 04, 2023)
(Updated as on April 28, 2023)
(Updated as on May 10, 2021)
(Updated as on April 01, 2021)
(Updated as on March 23, 2021)
(Updated as on December 18, 2020)
(Updated as on April 20, 2020)
(Updated as on April 01, 2020)
(Updated as on January 09, 2020)
(Updated as on August 09, 2019)
(Updated as on May 29, 2019)

Master Direction - Know Your Customer (KYC) Direction, 2016

Contents
INTRODUCTION ..................................................................................................................... 3
CHAPTER I ............................................................................................................................. 4
PRELIMINARY ................................................................................................................................. 4
CHAPTER II .......................................................................................................................... 15
General............................................................................................................................................ 15
CHAPTER III......................................................................................................................... 19
Customer Acceptance Policy.................................................................................................... 19
CHAPTER IV ......................................................................................................................... 21
Risk Management......................................................................................................................... 21
Chapter V............................................................................................................................... 22
Customer Identification Procedure (CIP) ............................................................................... 22
Chapter VI.............................................................................................................................. 24
Customer Due Diligence (CDD) Procedure ........................................................................... 24
Part I - Customer Due Diligence (CDD) Procedure in case of Individuals ..................................... 24
Part II - CDD Measures for Sole Proprietary firms ........................................................................ 34
Part III- CDD Measures for Legal Entities ...................................................................................... 35
Part IV - Identification of Beneficial Owner .................................................................................. 38
Part V - On-going Due Diligence.................................................................................................... 38
Part VI - Enhanced and Simplified Due Diligence Procedure ........................................................ 43
Chapter VII ............................................................................................................................ 48
Record Management ................................................................................................................... 48
Chapter VIII ........................................................................................................................... 50
Reporting Requirements to Financial Intelligence Unit - India ........................................ 50
Chapter IX.............................................................................................................................. 52
Requirements/obligations under International Agreements - .......................................... 52
Communications from International Agencies .................................................................... 52
Chapter X............................................................................................................................... 56
Other Instructions ........................................................................................................................ 56
Chapter XI.............................................................................................................................. 69
Repeal Provisions ........................................................................................................................ 69
Annex I ................................................................................................................................... 70
Annex II .................................................................................................................................. 73
Annex III ................................................................................................................................. 83
Annex IV ................................................................................................................................ 93
Appendix ............................................................................................................................... 96
List of Circulars or part thereof repealed with the issuance of Master Direction ....... 96

2
 1
INTRODUCTION

In order to prevent banks and other financial institutions from being used as a channel
for Money Laundering (ML)/ Terrorist Financing (TF) and to ensure the integrity and
stability of the financial system, efforts are continuously being made both
internationally and nationally, by way of prescribing various rules and regulations.
Internationally, the Financial Action Task Force (FATF) which is an inter-governmental
body established in 1989 by the Ministers of its member jurisdictions, sets standards
and promotes effective implementation of legal, regulatory and operational measures
for combating money laundering, terrorist financing and other related threats to the
integrity of the international financial system. India, being a member of FATF, is
committed to upholding measures to protect the integrity of international financial
system.

In India, the Prevention of Money-Laundering Act, 2002 and the Prevention of Money-
Laundering (Maintenance of Records) Rules, 2005, form the legal framework on Anti-
Money Laundering (AML) and Countering Financing of Terrorism (CFT). In terms of
the provisions of the PML Act, 2002 and the PML Rules, 2005, as amended from time
to time by the Government of India, Regulated Entities (REs) are required to follow
certain customer identification procedures while undertaking a transaction either by
establishing an account-based relationship or otherwise and monitor their
transactions.

2. Accordingly, in exercise of the powers conferred by sections 35A of the Banking

Regulation Act, 1949, the Banking Regulation Act (AACS), 1949, read with section 56
of the Act ibid, sections 45JA, 45K and 45L of the Reserve Bank of India Act, 1934,
section 10 (2) read with section 18 of Payment and Settlement Systems Act 2007 (Act
51 of 2007), section 11(1) of the Foreign Exchange Management Act, 1999, Rule 9(14)
of Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 and all
other laws enabling the Reserve Bank in this regard, the Reserve Bank of India being
satisfied that it is necessary and expedient in the public interest to do so, hereby issues
the Directions hereinafter specified.

1
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

3
 CHAPTER I

PRELIMINARY

1. Short Title and Commencement.

(a) These Directions shall be called the Reserve Bank of India (Know Your
Customer (KYC)) Directions, 2016.

(b) These directions shall come into effect on the day they are placed on the official
website of the Reserve Bank of India.

2. Applicability
(a) 2
The provisions of these Directions shall apply to every entity regulated by
Reserve Bank of India, more specifically as defined in 3 (b) (xiv) below, except
where specifically mentioned otherwise.
(b) These directions shall also apply to those branches and majority owned
subsidiaries of the REs which are located abroad, to the extent they are not
contradictory to the local laws in the host country, provided that:
i. 3
where applicable laws and regulations prohibit implementation of these
guidelines, the same shall be brought to the notice of the Reserve Bank of
India. RBI may advise further necessary action by the RE including
application of additional measures to be taken by the RE to manage the
ML/TF risks.
ii. in case there is a variance in KYC/AML standards prescribed by the
Reserve Bank of India and the host country regulators, branches/
subsidiaries of REs are required to adopt the more stringent regulation of
the two.
iii. branches/ subsidiaries of foreign incorporated banks may adopt the more
stringent regulation of the two i.e., standards prescribed by the Reserve
Bank of India and their home country regulators.
Provided that this rule shall not apply to ‘small accounts’ referred to in
paragraph 23 of Chapter VI.

3. Definitions
In these Directions, unless the context otherwise requires, the terms herein shall
bear the meanings assigned to them below:

2
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
3
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

4
 (a) Terms bearing meaning assigned in terms of Prevention of Money-Laundering
Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records)
Rules, 2005:
i. 4
“Aadhaar number” shall have the meaning assigned to it in clause (a) of section
2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits
and Services) Act, 2016 (18 of 2016);
ii. “Act” and “Rules” means the Prevention of Money-Laundering Act, 2002 and
the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005,
respectively and amendments thereto.
iii. 5
“Authentication”, in the context of Aadhaar authentication, means the process
as defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery
of Financial and Other Subsidies, Benefits and Services) Act, 2016.
iv. Beneficial Owner (BO)
a. Where the customer is a company, the beneficial owner is the natural
person(s), who, whether acting alone or together, or through one or more
juridical persons, has/have a controlling ownership interest or who exercise
control through other means.
Explanation- For the purpose of this sub-clause-
1. 6
“Controlling ownership interest” means ownership of/entitlement to more
than 10 percent of the shares or capital or profits of the company.
2. “Control” shall include the right to appoint majority of the directors or to
control the management or policy decisions including by virtue of their
shareholding or management rights or shareholders agreements or voting
agreements.
b. 7Where the customer is a partnership firm, the beneficial owner is the
natural person(s), who, whether acting alone or together, or through one or
more juridical person, has/have ownership of/entitlement to more than 10
percent of capital or profits of the partnership or who exercises control through
other means.
Explanation - For the purpose of this sub-clause, “control” shall include the
right to control the management or policy decision.

4
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
5
Amended vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
6
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
7
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

5
 c. Where the customer is an unincorporated association or body of
individuals, the beneficial owner is the natural person(s), who, whether acting
alone or together, or through one or more juridical person, has/have ownership
of/entitlement to more than 15 percent of the property or capital or profits of
the unincorporated association or body of individuals.
Explanation: Term ‘body of individuals’ includes societies. Where no natural
person is identified under (a), (b) or (c) above, the beneficial owner is the
relevant natural person who holds the position of senior managing official.
d. 8Where the customer is a trust, the identification of beneficial owner(s) shall
include identification of the author of the trust, the trustee, the beneficiaries
with 10 percent or more interest in the trust and any other natural person
exercising ultimate effective control over the trust through a chain of control or
ownership.
9
v. “Certified Copy” - Obtaining a certified copy by the RE shall mean comparing
the copy of the proof of possession of Aadhaar number where offline
verification cannot be carried out or officially valid document so produced by
the customer with the original and recording the same on the copy by the
authorised officer of the RE as per the provisions contained in the Act.
Provided that in case of Non-Resident Indians (NRIs) and Persons of Indian
Origin (PIOs), as defined in Foreign Exchange Management (Deposit)
Regulations, 2016 {FEMA 5(R)}, alternatively, the original certified copy,
certified by any one of the following, may be obtained:
• authorised officials of overseas branches of Scheduled Commercial Banks
registered in India,
• branches of overseas banks with whom Indian banks have relationships,
• Notary Public abroad,
• Court Magistrate,
• Judge,
• Indian Embassy/Consulate General in the country where the non-resident
customer resides.
vi. “Central KYC Records Registry” (CKYCR) means an entity defined under Rule
2(1) of the Rules, to receive, store, safeguard and retrieve the KYC records in
digital form of a customer.

8
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
9
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.

6
 vii. “Designated Director" means a person designated by the RE to ensure overall
compliance with the obligations imposed under chapter IV of the PML Act and
the Rules and shall include:
a. the Managing Director or a whole-time Director, duly authorized by the
Board of Directors, if the RE is a company,
b. the Managing Partner, if the RE is a partnership firm,
c. the Proprietor, if the RE is a proprietorship concern,
d. the Managing Trustee, if the RE is a trust,
e. a person or individual, as the case may be, who controls and manages the
affairs of the RE, if the RE is an unincorporated association or a body of
individuals, and
f. a person who holds the position of senior management or equivalent
designated as a 'Designated Director’ in respect of Cooperative Banks and
Regional Rural Banks.
Explanation - For the purpose of this clause, the terms "Managing Director" and
"Whole-time Director" shall have the meaning assigned to them in the
Companies Act, 2013.
viii. 10
“Digital KYC” means the capturing live photo of the customer and officially
valid document or the proof of possession of Aadhaar, where offline verification
cannot be carried out, along with the latitude and longitude of the location
where such live photo is being taken by an authorised officer of the RE as per
the provisions contained in the Act.
ix. 11
“Digital Signature” shall have the same meaning as assigned to it in clause
(p) of sub-section (1) of section (2) of the Information Technology Act, 2000
(21 of 2000).
x. 12
“Equivalent e-document” means an electronic equivalent of a document,
issued by the issuing authority of such document with its valid digital signature
including documents issued to the digital locker account of the customer as
per rule 9 of the Information Technology (Preservation and Retention of
Information by Intermediaries Providing Digital Locker Facilities) Rules, 2016.

10
Inserted vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
11
Inserted vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
12
Inserted vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.

7
 xi. 13
“Group” – The term “group" shall have the same meaning assigned to it in
clause (e) of sub-section (9) of section 286 of the Income-tax Act,1961 (43 of
1961).
xii. 14
“Know Your Client (KYC) Identifier” means the unique number or code
assigned to a customer by the Central KYC Records Registry.
xiii. 15
“Non-profit organisations” (NPO) means any entity or organisation,
constituted for religious or charitable purposes referred to in clause (15) of
section 2 of the Income-tax Act, 1961 (43 of 1961), that is registered as a trust
or a society under the Societies Registration Act, 1860 or any similar State
legislation or a company registered under section 8 of the Companies Act,
2013 (18 of 2013).
xiv. “Officially Valid Document” (OVD) means the passport, the driving licence,
16
proof of possession of Aadhaar number, the Voter's Identity Card issued by
the Election Commission of India, job card issued by NREGA duly signed by
an officer of the State Government and letter issued by the National Population
Register containing details of name and address.
Provided that,
a. where the customer submits his proof of possession of Aadhaar number
as an OVD, he may submit it in such form as are issued by the Unique
Identification Authority of India.
b. 17
where the OVD furnished by the customer does not have updated
address, the following documents or the equivalent e-documents thereof
shall be deemed to be OVDs for the limited purpose of proof of address:-
i. utility bill which is not more than two months old of any service provider
(electricity, telephone, post-paid mobile phone, piped gas, water bill);
ii. property or Municipal tax receipt;
iii. pension or family pension payment orders (PPOs) issued to retired
employees by Government Departments or Public Sector Undertakings,
if they contain the address;
iv. letter of allotment of accommodation from employer issued by State
Government or Central Government Departments, statutory or
regulatory bodies, public sector undertakings, scheduled commercial

13
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
14
Inserted vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
15
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
16
Inserted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
17
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.

8
 banks, financial institutions and listed companies and leave and licence
agreements with such employers allotting official accommodation;
c. the customer shall submit OVD with current address within a period of three
months of submitting the documents specified at ‘b’ above
d. where the OVD presented by a foreign national does not contain the details
of address, in such case the documents issued by the Government
departments of foreign jurisdictions and letter issued by the Foreign
Embassy or Mission in India shall be accepted as proof of address.
Explanation: For the purpose of this clause, a document shall be deemed to be
an OVD even if there is a change in the name subsequent to its issuance
provided it is supported by a marriage certificate issued by the State
Government or Gazette notification, indicating such a change of name.
xv. 18
“Offline verification” shall have the same meaning as assigned to it in clause
(pa) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other
Subsidies, Benefits and Services) Act, 2016 (18 of 2016).
xvi. “Person” has the same meaning assigned in the Act and includes:
a. an individual,
b. a Hindu undivided family,
c. a company,
d. a firm,
e. an association of persons or a body of individuals, whether incorporated
or not,
f. every artificial juridical person, not falling within any one of the above
persons (a to e), and
g. any agency, office or branch owned or controlled by any of the above
persons (a to f).
xvii. 19
Deleted.
xviii. 20
“Principal Officer” means an officer at the management level nominated by
the RE, responsible for furnishing information as per rule 8 of the Rules.
xix. “Suspicious transaction” means a “transaction” as defined below, including an
attempted transaction, whether or not made in cash, which, to a person acting
in good faith:

18
Amended vide DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
19
Deleted vide circular DOR.AML.REC.66/14.01.001/2023-24 dated January 04, 2024.
20
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

9
 a. gives rise to a reasonable ground of suspicion that it may involve
proceeds of an offence specified in the Schedule to the Act, regardless
of the value involved; or
b. appears to be made in circumstances of unusual or unjustified
complexity; or
c. appears to not have economic rationale or bona-fide purpose; or
d. gives rise to a reasonable ground of suspicion that it may involve
financing of the activities relating to terrorism.

Explanation: Transaction involving financing of the activities relating to

terrorism includes transaction involving funds suspected to be linked or related
to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist
organization or those who finance or are attempting to finance terrorism.
xx. 21
A ‘Small Account' means a savings account which is opened in terms of sub-
rule (5) of rule 9 of the PML Rules, 2005. Details of the operation of a small
account and controls to be exercised for such account are specified in
paragraph 23.
xxi. “Transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or
the arrangement thereof and includes:
a. opening of an account;
b. deposit, withdrawal, exchange or transfer of funds in whatever currency,
whether in cash or by cheque, payment order or other instruments or by
electronic or other non-physical means;
c. the use of a safety deposit box or any other form of safe deposit;
d. entering into any fiduciary relationship;
e. any payment made or received, in whole or in part, for any contractual
or other legal obligation; or
f. establishing or creating a legal person or legal arrangement.
(b) Terms bearing meaning assigned in this Directions, unless the context otherwise
requires, shall bear the meanings assigned to them below:
i. “Common Reporting Standards” (CRS) means reporting standards set for
implementation of multilateral agreement signed to automatically exchange
information based on Article 6 of the Convention on Mutual Administrative
Assistance in Tax Matters.

21
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

10
 ii. 22
Correspondent Banking: Correspondent banking is the provision of banking
services by one bank (the “correspondent bank”) to another bank (the
“respondent bank”). Respondent banks may be provided with a wide range of
services, including cash management (e.g., interest-bearing accounts in a
variety of currencies), international wire transfers, cheque clearing, payable-
through accounts and foreign exchange services.
iii. “Customer” means a person who is engaged in a financial transaction or
activity with a Regulated Entity (RE) and includes a person on whose behalf
the person who is engaged in the transaction or activity, is acting.
iv. “Walk-in Customer” means a person who does not have an account-based
relationship with the RE, but undertakes transactions with the RE.
v. 23
“Customer Due Diligence (CDD)” means identifying and verifying the
customer and the beneficial owner using reliable and independent sources of
identification.
Explanation – The CDD, at the time of commencement of an account-based
relationship or while carrying out occasional transaction of an amount equal to
or exceeding rupees fifty thousand, whether conducted as a single transaction
or several transactions that appear to be connected, or any international
money transfer operations, shall include:
(a) Identification of the customer, verification of their identity using reliable and
independent sources of identification, obtaining information on the purpose
and intended nature of the business relationship, where applicable
(b) Taking reasonable steps to understand the nature of the customer's business,
and its ownership and control;
(c) Determining whether a customer is acting on behalf of a beneficial owner, and
identifying the beneficial owner and taking all steps to verify the identity of the
beneficial owner, using reliable and independent sources of identification.

vi. “Customer identification” means undertaking the process of CDD.

vii. “FATCA” means Foreign Account Tax Compliance Act of the United States of
America (USA) which, inter alia, requires foreign financial institutions to report
about financial accounts held by U.S. taxpayers or foreign entities in which
U.S. taxpayers hold a substantial ownership interest.

22
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
23
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

11
 viii. “IGA” means Inter Governmental Agreement between the Governments of
India and the USA to improve international tax compliance and to implement
FATCA of the USA.
ix. “KYC Templates” means templates prepared to facilitate collating and
reporting the KYC data to the CKYCR, for individuals and legal entities.
x. “Non-face-to-face customers” means customers who open accounts without
visiting the branch/offices of the REs or meeting the officials of REs.
xi. 24
“On-going Due Diligence” means regular monitoring of transactions in
accounts to ensure that those are consistent with RE’s knowledge about the
customers, customers’ business and risk profile, the source of funds / wealth.
xii. 25
Payable-through accounts: The term payable-through accounts refers to
correspondent accounts that are used directly by third parties to transact
business on their own behalf.
xiii. “Periodic Updation” means steps taken to ensure that documents, data or
information collected under the CDD process is kept up-to-date and relevant
by undertaking reviews of existing records at periodicity prescribed by the
Reserve Bank.
xiv. 26
“Regulated Entities” (REs) means
a. all Scheduled Commercial Banks (SCBs)/ Regional Rural Banks
(RRBs)/ Local Area Banks (LABs)/ All Primary (Urban) Co-operative
Banks (UCBs) /State and Central Co-operative Banks (StCBs / CCBs)
and any other entity which has been licenced under section 22 of
Banking Regulation Act, 1949, which as a group shall be referred as
‘banks’
b. All India Financial Institutions (AIFIs)
c. All Non-Banking Finance Companies (NBFCs), Miscellaneous Non-
Banking Companies (MNBCs) and Residuary Non-Banking Companies
(RNBCs)
d. Asset Reconstruction Companies (ARCs)
e. All Payment System Providers (PSPs)/ System Participants (SPs) and
Prepaid Payment Instrument Issuers (PPI Issuers)
f. All authorised persons (APs) including those who are agents of Money
Transfer Service Scheme (MTSS), regulated by the Regulator.

24
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
25
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
26
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

12
 xv. 27
Shell Bank” means a bank that has no physical presence in the country in
which it is incorporated and licensed, and which is unaffiliated with a regulated
financial group that is subject to effective consolidated supervision. Physical
presence means meaningful mind and management located within a country.
The existence simply of a local agent or low-level staff does not constitute
physical presence.
xvi. 28
“Video based Customer Identification Process (V-CIP)”: an alternate method
of customer identification with facial recognition and customer due diligence by
an authorised official of the RE by undertaking seamless, secure, live, informed-
consent based audio-visual interaction with the customer to obtain identification
information required for CDD purpose, and to ascertain the veracity of the
information furnished by the customer through independent verification and
maintaining audit trail of the process. Such processes complying with
prescribed standards and procedures shall be treated on par with face-to-face
CIP for the purpose of this Master Direction.
xvii. 29
“Wire transfer” related definitions:
a. Batch transfer: Batch transfer is a transfer comprised of a number of
individual wire transfers that are being sent to the same financial
institutions but may/may not be ultimately intended for different persons.
b. Beneficiary: Beneficiary refers to a natural or legal person or legal
arrangement who / which is identified by the originator as the receiver of
the requested wire transfer.
c. Beneficiary RE: It refers to a financial institution, regulated by the RBI,
which receives the wire transfer from the ordering financial institution
directly or through an intermediary RE and makes the funds available to
the beneficiary.
d. Cover Payment: Cover Payment refers to a wire transfer that combines
a payment message sent directly by the ordering financial institution to
the beneficiary financial institution with the routing of the funding
instruction (the cover) from the ordering financial institution to the
beneficiary financial institution through one or more intermediary
financial institutions.

27
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
28
Amended vide circular DOR.AML.REC.No.15/14.01.001/2021-22 dated May 10, 2021.
29
Amended vide circular DOR.AML.REC.13/14.01.001/2023-24 dated May 4, 2023.

13
e. Cross-border wire transfer: Cross-border wire transfer refers to any wire
transfer where the ordering financial institution and beneficiary financial
institution are located in different countries. This term also refers to any
chain of wire transfer in which at least one of the financial institutions
involved is located in a different country.
f. Domestic wire transfer: Domestic wire transfer refers to any wire transfer
where the ordering financial institution and beneficiary financial
institution are located in India. This term, therefore, refers to any chain
of wire transfer that takes place entirely within the borders of India, even
though the system used to transfer the payment message may be
located in another country.
g. Financial Institution: In the context of wire-transfer instructions, the term
‘Financial Institution’ shall have the same meaning as has been ascribed
to it in the FATF Recommendations, as revised from time to time.
h. Intermediary RE: Intermediary RE refers to a financial institution or any
other entity, regulated by the RBI which handles an intermediary element
of the wire transfer, in a serial or cover payment chain and that receives
and transmits a wire transfer on behalf of the ordering financial institution
and the beneficiary financial institution, or another intermediary financial
institution.
i. Ordering RE: Ordering RE refers to the financial institution, regulated by
the RBI, which initiates the wire transfer and transfers the funds upon
receiving the request for a wire transfer on behalf of the originator.
j. Originator: Originator refers to the account holder who allows the wire
transfer from that account, or where there is no account, the natural or
legal person that places the order with the ordering financial institution
to perform the wire transfer.
k. Serial Payment: Serial Payment refers to a direct sequential chain of
payment where the wire transfer and accompanying payment message
travel together from the ordering financial institution to the beneficiary
financial institution directly or through one or more intermediary financial
institutions (e.g., correspondent banks).
l. Straight-through Processing: Straight-through processing refers to
payment transactions that are conducted electronically without the need
for manual intervention.

14
 m. Unique transaction reference number: Unique transaction reference
number refers to a combination of letters, numbers or symbols,
determined by the payment service provider, in accordance with the
protocols of the payment and settlement system or messaging system
used for the wire transfer.
n. Wire transfer: Wire transfer refers to any transaction carried out on
behalf of an originator through a financial institution by electronic means
with a view to making an amount of funds available to a beneficiary at a
beneficiary financial institution, irrespective of whether the originator and
the beneficiary are the same person.
(c) All other expressions unless defined herein shall have the same meaning as have
been assigned to them under the Banking Regulation Act, 1949, the Reserve Bank
of India Act, 1935, the Prevention of Money Laundering Act, 2002, the Prevention
of Money Laundering (Maintenance of Records) Rules, 2005, the 30
Aadhaar
(Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act,
2016 and regulations made thereunder, any statutory modification or re-enactment
thereto or as used in commercial parlance, as the case may be.

CHAPTER II

General

4. (a) There shall be a Know Your Customer (KYC) policy duly approved by the Board
of Directors of REs or any committee of the Board to which power has been
delegated.
31
(b) In terms of PML Rules, groups are required to implement group-wide policies
for the purpose of discharging obligations under the provisions of Chapter IV of
the PML Act, 2002. (15 of 2003). Accordingly, every RE which is part of a group,
shall implement group-wide programmes against money laundering and terror
financing, including group-wide policies for sharing information required for the
purposes of client due diligence and money laundering and terror finance risk
management and such programmes shall include adequate safeguards on the
confidentiality and use of information exchanged, including safeguards to prevent
tipping-off.

30
Inserted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
31
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

15
 32
(c) REs’ policy framework should seek to ensure compliance with PML Act/Rules,
including regulatory instructions in this regard and should provide a bulwark against
threats arising from money laundering, terrorist financing, proliferation financing
and other related risks. While ensuring compliance of the legal/regulatory
requirements as above, REs may also consider adoption of best international
practices taking into account the FATF standards and FATF guidance notes, for
managing risks better.

5. The KYC policy shall include following four key elements:

(a) Customer Acceptance Policy;
(b) Risk Management;
(c) Customer Identification Procedures (CIP); and
(d) Monitoring of Transactions
33
5A. Money Laundering and Terrorist Financing Risk Assessment by REs:
(a) REs shall carry out ‘Money Laundering (ML) and Terrorist Financing (TF) Risk
Assessment’ exercise periodically to identify, assess and take effective
measures to mitigate its money laundering and terrorist financing risk for clients,
countries or geographic areas, products, services, transactions or delivery
channels, etc.
The assessment process should consider all the relevant risk factors before
determining the level of overall risk and the appropriate level and type of
mitigation to be applied. While preparing the internal risk assessment, REs shall
take cognizance of the overall sector-specific vulnerabilities, if any, that the
regulator/supervisor may share with REs from time to time.
(b) The risk assessment by the RE shall be properly documented and be
proportionate to the nature, size, geographical presence, complexity of
activities/structure, etc. of the RE. Further, the periodicity of risk assessment
exercise shall be determined by the Board or any committee of the Board of the
RE to which power in this regard has been delegated, in alignment with the
outcome of the risk assessment exercise. However, it should be reviewed at
least annually.
(c) The outcome of the exercise shall be put up to the Board or any committee of
the Board to which power in this regard has been delegated, and should be
available to competent authorities and self-regulating bodies.

32
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
33
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

16
34
5B. REs shall apply a Risk Based Approach (RBA) for mitigation and management
of the risks (identified on their own or through national risk assessment) and should
have Board approved policies, controls and procedures in this regard. REs shall
implement a CDD programme, having regard to the ML/TF risks identified and the size
of business. Further, REs shall monitor the implementation of the controls and
enhance them if necessary.

6. Designated Director:
(a) A “Designated Director” means a person designated by the RE to ensure
overall compliance with the obligations imposed under Chapter IV of the PML
Act and the Rules and shall be nominated by the Board.
(b) The name, designation and address of the Designated Director shall be
communicated to the FIU-IND.
(c) 35
Further, the name, designation, address and contact details of the
Designated Director shall also be communicated to the RBI.
(d) In no case, the Principal Officer shall be nominated as the 'Designated
Director'.

7. Principal Officer:
(a) The Principal Officer shall be responsible for ensuring compliance, monitoring
transactions, and sharing and reporting information as required under the
law/regulations.
(b) The name, designation and address of the Principal Officer shall be
communicated to the FIU-IND.
(c) 36
Further, the name, designation, address and contact details of the Principal
Officer shall also be communicated to the RBI.

8. Compliance of KYC policy

(a) REs shall ensure compliance with KYC Policy through:

(i) Specifying as to who constitute ‘Senior Management’ for the purpose of
KYC compliance.
(ii) Allocation of responsibility for effective implementation of policies and
procedures.

34
Inserted vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
35
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
36
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

17
 (iii) Independent evaluation of the compliance functions of REs’ policies and
procedures, including legal and regulatory requirements.
(iv) Concurrent/internal audit system to verify the compliance with KYC/AML
policies and procedures.
(v) Submission of quarterly audit notes and compliance to the Audit Committee.
(b) REs shall ensure that decision-making functions of determining compliance
with KYC norms are not outsourced.

18
 CHAPTER III

Customer Acceptance Policy

9. REs shall frame a Customer Acceptance Policy.

10. Without prejudice to the generality of the aspect that Customer Acceptance Policy
may contain, REs shall ensure that:
(a) No account is opened in anonymous or fictitious/benami name.
(b) 37
No account is opened where the RE is unable to apply appropriate CDD
measures, either due to non-cooperation of the customer or non-reliability of
the documents/information furnished by the customer. The RE shall consider
filing an STR, if necessary, when it is unable to comply with the relevant CDD
measures in relation to the customer.
(c) No transaction or account-based relationship is undertaken without following
the CDD procedure.
(d) The mandatory information to be sought for KYC purpose while opening an
account and during the periodic updation, is specified.
(e) 38
Additional information, where such information requirement has not been
specified in the internal KYC Policy of the RE, is obtained with the explicit
consent of the customer.
(f) 39
REs shall apply the CDD procedure at the UCIC level. Thus, if an existing
KYC compliant customer of a RE desires to open another account or avail any
other product or service from the same RE, there shall be no need for a fresh
CDD exercise as far as identification of the customer is concerned.
(g) CDD Procedure is followed for all the joint account holders, while opening a
joint account.
(h) Circumstances in which, a customer is permitted to act on behalf of another
person/entity, is clearly spelt out.
(i) 40
Suitable system is put in place to ensure that the identity of the customer does
not match with any person or entity, whose name appears in the sanctions lists
indicated in Chapter IX of this MD.
(j) 41
Where Permanent Account Number (PAN) is obtained, the same shall be
verified from the verification facility of the issuing authority.

37
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
38
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
39
Amended vide circular DOR.AML.REC. 49/14.01.001/2024-25 dated November 6, 2024.
40
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
41
Inserted vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.

19
 (k) 42
Where an equivalent e-document is obtained from the customer, RE shall
verify the digital signature as per the provisions of the Information Technology
Act, 2000 (21 of 2000).
(l) 43
Where Goods and Services Tax (GST) details are available, the GST number
shall be verified from the search/verification facility of the issuing authority.

11. Customer Acceptance Policy shall not result in denial of banking/financial facility
to members of the general public, especially those, who are financially or socially
disadvantaged.

44
11A. Where RE forms a suspicion of money laundering or terrorist financing, and it
reasonably believes that performing the CDD process will tip-off the customer, it shall
not pursue the CDD process, and instead file an STR with FIU-IND.

42
Inserted vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
43
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
44
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

20
 CHAPTER IV

Risk Management

12. For Risk Management, REs shall have a risk-based approach which includes the
following.
(a) Customers shall be categorised as low, medium and high-risk category, based
on the assessment and risk perception of the RE.
(b) 45
Broad principles may be laid down by the REs for risk-categorisation of
customers.
(c) 46
Risk categorisation shall be undertaken based on parameters such as
customer’s identity, social/financial status, nature of business activity, and
information about the customer’s business and their location, geographical risk
covering customers as well as transactions, type of products/services offered,
delivery channel used for delivery of products/services, types of transaction
undertaken – cash, cheque/monetary instruments, wire transfers, forex
transactions, etc. While considering customer’s identity, the ability to confirm
identity documents through online or other services offered by issuing
authorities may also be factored in.
(d) 47
The risk categorisation of a customer and the specific reasons for such
categorisation shall be kept confidential and shall not be revealed to the
customer to avoid tipping off the customer.

Provided that various other information collected from different categories of

customers relating to the perceived risk, is non-intrusive and the same is specified in
the KYC policy.
48
Explanation: FATF Public Statement, the reports and guidance notes on KYC/AML
issued by the Indian Banks Association (IBA), and other agencies, etc., may also be
used in risk assessment.

45
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
46
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
47
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
48
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

21
 Chapter V

Customer Identification Procedure (CIP)

13. REs shall undertake identification of customers in the following cases:

(a) Commencement of an account-based relationship with the customer.
(b) 49Carrying out any international money transfer operations for a person who is not
an account holder of the RE.
(c) When there is a doubt about the authenticity or adequacy of the customer
identification data it has obtained.
(d) Selling third party products as agents, selling their own products, payment of dues
of credit cards/sale and reloading of prepaid/travel cards and any other product
for more than rupees fifty thousand.
(e) Carrying out transactions for a non-account-based customer, that is a walk-in
customer, where the amount involved is equal to or exceeds rupees fifty
thousand, whether conducted as a single transaction or several transactions that
appear to be connected.
(f) When a RE has reason to believe that a customer (account- based or walk-in) is
intentionally structuring a transaction into a series of transactions below the
threshold of rupees fifty thousand.
(g) REs shall ensure that introduction is not to be sought while opening accounts.

14. For the purpose of verifying the identity of customers at the time of
commencement of an account-based relationship, REs, shall at their option, rely
on customer due diligence done by a third party, subject to the following
conditions:

(a) 50
Records or the information of the customer due diligence carried out by the
third party is obtained immediately from the third party or from the Central KYC
Records Registry.
(b) Adequate steps are taken by REs to satisfy themselves that copies of
identification data and other relevant documentation relating to the customer
due diligence requirements shall be made available from the third party upon
request without delay.

49
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
50
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

22
(c) The third party is regulated, supervised or monitored for, and has measures
in place for, compliance with customer due diligence and record-keeping
requirements in line with the requirements and obligations under the PML Act.
(d) The third party shall not be based in a country or jurisdiction assessed as high
risk.
(e) The ultimate responsibility for customer due diligence and undertaking
enhanced due diligence measures, as applicable, will be with the RE.

23
 Chapter VI

Customer Due Diligence (CDD) Procedure

Part I - Customer Due Diligence (CDD) Procedure in case of Individuals

15. 51Deleted
16. 52For undertaking CDD, REs shall obtain the following from an individual while
establishing an account-based relationship or while dealing with the individual who
is a beneficial owner, authorised signatory or the power of attorney holder related
to any legal entity:
(a) the Aadhaar number where,
(i) he is desirous of receiving any benefit or subsidy under any scheme
notified under section 7 of the Aadhaar (Targeted Delivery of Financial
and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016); or
(ii) he decides to submit his Aadhaar number voluntarily to a bank or any
RE notified under first proviso to sub-section (1) of section 11A of the
PML Act; or
(aa) the proof of possession of Aadhaar number where offline verification can
be carried out; or

(ab) the proof of possession of Aadhaar number where offline verification

cannot be carried out or any OVD or the equivalent e-document thereof
containing the details of his identity and address; or

53
(ac) the KYC Identifier with an explicit consent to download records from
CKYCR; and

(b) the Permanent Account Number or the equivalent e-document thereof or

Form No. 60 as defined in Income-tax Rules, 1962; and

(c) such other documents including in respect of the nature of business and
financial status of the customer, or the equivalent e-documents thereof as may
be required by the RE:

Provided that where the customer has submitted,

51
Deleted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
52
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
53
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

24
 i) Aadhaar number under clause (a) above to a bank or to a RE notified under
first proviso to sub-section (1) of section 11A of the PML Act, such bank or RE
shall carry out authentication of the customer’s Aadhaar number using e-KYC
authentication facility provided by the Unique Identification Authority of India.
Further, in such a case, if customer wants to provide a current address, different
from the address as per the identity information available in the Central
Identities Data Repository, he may give a self-declaration to that effect to the
RE.

ii) proof of possession of Aadhaar under clause (aa) above where offline
verification can be carried out, the RE shall carry out offline verification.

iii) an equivalent e-document of any OVD, the RE shall verify the digital
signature as per the provisions of the Information Technology Act, 2000 (21 of
2000) and any rules issues thereunder and take a live photo as specified under
Annex I.

iv) any OVD or proof of possession of Aadhaar number under clause (ab) above
where offline verification cannot be carried out, the RE shall carry out
verification through digital KYC as specified under Annex I.

54
v) KYC Identifier under clause (ac) above, the RE shall retrieve the KYC
records online from the CKYCR in accordance with paragraph 56.

Provided that for a period not beyond such date as may be notified by the
Government for a class of REs, instead of carrying out digital KYC, the RE
pertaining to such class may obtain a certified copy of the proof of possession of
Aadhaar number or the OVD and a recent photograph where an equivalent e-
document is not submitted.

Provided further that in case e-KYC authentication cannot be performed for an

individual desirous of receiving any benefit or subsidy under any scheme notified
under section 7 of the Aadhaar (Targeted Delivery of Financial and Other
subsidies, Benefits and Services) Act, 2016 owing to injury, illness or infirmity on
account of old age or otherwise, and similar causes, REs shall, apart from obtaining
the Aadhaar number, perform identification preferably by carrying out offline

54
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

25
 verification or alternatively by obtaining the certified copy of any other OVD or the
equivalent e-document thereof from the customer. CDD done in this manner shall
invariably be carried out by an official of the RE and such exception handling shall
also be a part of the concurrent audit as mandated in paragraph 8. REs shall ensure
to duly record the cases of exception handling in a centralised exception database.
The database shall contain the details of grounds of granting exception, customer
details, name of the designated official authorising the exception and additional
details, if any. The database shall be subjected to periodic internal audit/inspection
by the RE and shall be available for supervisory review.

Explanation 1: RE shall, where its customer submits a proof of possession of

Aadhaar Number containing Aadhaar Number, ensure that such customer redacts
or blacks out his Aadhaar number through appropriate means where the
authentication of Aadhaar number is not required as per proviso (i) above.
Explanation 2: Biometric based e-KYC authentication can be done by bank
official/business correspondents/business facilitators.
Explanation 3: The use of Aadhaar, proof of possession of Aadhaar etc., shall be in
accordance with the Aadhaar (Targeted Delivery of Financial and Other Subsidies
Benefits and Services) Act, 2016 and the regulations made thereunder.

17. Accounts opened using Aadhaar OTP based e-KYC, in non-face-to-face mode, are
subject to the following conditions:
i. There must be a specific consent from the customer for authentication through
OTP.
ii. 55
As a risk-mitigating measure for such accounts, REs shall ensure that
transaction alerts, OTP, etc., are sent only to the mobile number of the customer
registered with Aadhaar. REs shall have a board approved policy delineating a
robust process of due diligence for dealing with requests for change of mobile
number in such accounts.
iii. The aggregate balance of all the deposit accounts of the customer shall not
exceed rupees one lakh. In case, the balance exceeds the threshold, the
account shall cease to be operational, till CDD as mentioned at (vi) below is
complete.

55
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

26
 iv. The aggregate of all credits in a financial year, in all the deposit accounts taken
together, shall not exceed rupees two lakh.
v. As regards borrowal accounts, only term loans shall be sanctioned. The
aggregate amount of term loans sanctioned shall not exceed rupees sixty
thousand in a year.
vi. 56
Accounts, both deposit and borrowal, opened using OTP based e-KYC shall
not be allowed for more than one year unless identification as per paragraph 16
or as per paragraph 18 (V-CIP) is carried out. If Aadhaar details are used under
paragraph 18, the process shall be followed in its entirety including fresh
Aadhaar OTP authentication.
vii. If the CDD procedure as mentioned above is not completed within a year, in
respect of deposit accounts, the same shall be closed immediately. In respect
of borrowal accounts no further debits shall be allowed.
viii. 57
A declaration shall be obtained from the customer to the effect that no other
account has been opened nor will be opened using OTP based KYC in non-
face-to-face mode with any other RE. Further, while uploading KYC information
to CKYCR, REs shall clearly indicate that such accounts are opened using OTP
based e-KYC and other REs shall not open accounts based on the KYC
information of accounts opened with OTP based e-KYC procedure in non-face-
to-face mode.
ix. REs shall have strict monitoring procedures including systems to generate alerts
in case of any non-compliance/violation, to ensure compliance with the above
mentioned conditions.

18. 58
REs may undertake V-CIP to carry out:

i) CDD in case of new customer on-boarding for individual customers, proprietor

in case of proprietorship firm, authorised signatories and Beneficial Owners
(BOs) in case of Legal Entity (LE) customers.
59
Provided that in case of CDD of a proprietorship firm, REs shall also obtain
the equivalent e-document of the activity proofs with respect to the
proprietorship firm, as mentioned in paragraph 28 and paragraph 29, apart
from undertaking CDD of the proprietor.

56
Amended vide circular DOR.AML.REC.No.15/14.01.001/2021-22 dated May 10, 2021.
57
Amended vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
58
Amended vide circular DOR.AML.REC.No.15/14.01.001/2021-22 dated May 10, 2021.
59
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

27
 ii) Conversion of existing accounts opened in non-face to face mode using
Aadhaar OTP based e-KYC authentication as per paragraph 17.
iii) Updation/ Periodic updation of KYC for eligible customers.

REs opting to undertake V-CIP, shall adhere to the following minimum standards:

(a) V-CIP Infrastructure

i) The RE should have complied with the RBI guidelines on minimum baseline
cyber security and resilience framework for banks, as updated from time to
time as well as other general guidelines on IT risks. The technology
infrastructure should be housed in own premises of the RE and the V-CIP
connection and interaction shall necessarily originate from its own secured
network domain. Any technology related outsourcing for the process should
be compliant with relevant RBI guidelines. 60
Where cloud deployment model
is used, it shall be ensured that the ownership of data in such model rests with
the RE only and all the data including video recording is transferred to the
RE’s exclusively owned / leased server(s) including cloud server, if any,
immediately after the V-CIP process is completed and no data shall be
retained by the cloud service provider or third-party technology provider
assisting the V-CIP of the RE.
ii) The RE shall ensure end-to-end encryption of data between customer device
and the hosting point of the V-CIP application, as per appropriate encryption
standards. The customer consent should be recorded in an auditable and
alteration proof manner.
iii) The V-CIP infrastructure / application should be capable of preventing
connection from IP addresses outside India or from spoofed IP addresses.
iv) The video recordings should contain the live GPS co-ordinates (geo-tagging)
of the customer undertaking the V-CIP and date-time stamp. The quality of the
live video in the V-CIP shall be adequate to allow identification of the customer
beyond doubt.
v) The application shall have components with face liveness / spoof detection as
well as face matching technology with high degree of accuracy, even though
the ultimate responsibility of any customer identification rests with the RE.

60
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

28
 Appropriate artificial intelligence (AI) technology can be used to ensure that
the V-CIP is robust.
vi) Based on experience of detected / attempted / ‘near-miss’ cases of forged
identity, the technology infrastructure including application software as well as
work flows shall be regularly upgraded. Any detected case of forged identity
through V-CIP shall be reported as a cyber event under extant regulatory
guidelines.
vii) 61
The V-CIP infrastructure shall undergo necessary tests such as Vulnerability
Assessment, Penetration testing and a Security Audit to ensure its robustness
and end-to-end encryption capabilities. Any critical gap reported under this
process shall be mitigated before rolling out its implementation. Such tests
should be conducted by the empanelled auditors of Indian Computer
Emergency Response Team (CERT-In). Such tests should also be carried out
periodically in conformance to internal / regulatory guidelines.
viii) The V-CIP application software and relevant APIs / webservices shall also
undergo appropriate testing of functional, performance, maintenance strength
before being used in live environment. Only after closure of any critical gap
found during such tests, the application should be rolled out. Such tests shall
also be carried out periodically in conformity with internal/ regulatory
guidelines.

(b) V-CIP Procedure

i) Each RE shall formulate a clear work flow and standard operating procedure
for V-CIP and ensure adherence to it. The V-CIP process shall be operated
only by officials of the RE specially trained for this purpose. The official should
be capable to carry out liveness check and detect any other fraudulent
manipulation or suspicious conduct of the customer and act upon it.
ii) 62
Disruption of any sort including pausing of video, reconnecting calls, etc.,
should not result in creation of multiple video files. If pause or disruption is not
leading to the creation of multiple files, then there is no need to initiate a fresh
session by the RE. However, in case of call drop / disconnection, fresh session
shall be initiated.

61
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
62
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

29
 iii) The sequence and/or type of questions, including those indicating the liveness
of the interaction, during video interactions shall be varied in order to establish
that the interactions are real-time and not pre-recorded.
iv) Any prompting observed at end of customer shall lead to rejection of the
account opening process.
v) The fact of the V-CIP customer being an existing or new customer, or if it
relates to a case rejected earlier or if the name appearing in some negative
list should be factored in at appropriate stage of work-flow.
vi) The authorised official of the RE performing the V-CIP shall record audio-video
as well as capture photograph of the customer present for identification and
obtain the identification information using any one of the following:

a) OTP based Aadhaar e-KYC authentication

b) Offline Verification of Aadhaar for identification
c) KYC records downloaded from CKYCR, in accordance with paragraph
56, using the KYC identifier provided by the customer
d) Equivalent e-document of Officially Valid Documents (OVDs) including
documents issued through DigiLocker

RE shall ensure to redact or blackout the Aadhaar number in terms of

paragraph 16.

63
In case of offline verification of Aadhaar using XML file or Aadhaar Secure
QR Code, it shall be ensured that the XML file or QR code generation date is
not older than three working days from the date of carrying out V-CIP.

64
Further, in line with the prescribed period of three working days for usage of
Aadhaar XML file / Aadhaar QR code, REs shall ensure that the video process
of the V-CIP is undertaken within three working days of downloading /
obtaining the identification information through CKYCR / Aadhaar
authentication / equivalent e-document, if in the rare cases, the entire process
cannot be completed at one go or seamlessly. However, REs shall ensure that
no incremental risk is added due to this.

63
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
64
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

30
 vii) If the address of the customer is different from that indicated in the OVD,
suitable records of the current address shall be captured, as per the existing
requirement. It shall be ensured that the economic and financial
profile/information submitted by the customer is also confirmed from the
customer undertaking the V-CIP in a suitable manner.
viii) RE shall capture a clear image of PAN card to be displayed by the customer
during the process, except in cases where e-PAN is provided by the customer.
The PAN details shall be verified from the database of the issuing authority
including through DigiLocker.
ix) Use of printed copy of equivalent e-document including e-PAN is not valid for
the V-CIP.
x) The authorised official of the RE shall ensure that photograph of the customer
in the Aadhaar/OVD and PAN/e-PAN matches with the customer undertaking
the V-CIP and the identification details in Aadhaar/OVD and PAN/e-PAN shall
match with the details provided by the customer.
xi) Assisted V-CIP shall be permissible when banks take help of Business
Correspondents (BCs) facilitating the process only at the customer end. Banks
shall maintain the details of the BC assisting the customer, where services of
BCs are utilized. The ultimate responsibility for customer due diligence will be
with the bank.
xii) All accounts opened through V-CIP shall be made operational only after being
subject to concurrent audit, to ensure the integrity of process and its
acceptability of the outcome.
xiii) All matters not specified under the paragraph but required under other statutes
such as the Information Technology (IT) Act shall be appropriately complied
with by the RE.

(c) V-CIP Records and Data Management

i) The entire data and recordings of V-CIP shall be stored in a system / systems
located in India. REs shall ensure that the video recording is stored in a safe
and secure manner and bears the date and time stamp that affords easy
historical data search. The extant instructions on record management, as
stipulated in this MD, shall also be applicable for V-CIP.
ii) The activity log along with the credentials of the official performing the V-CIP
shall be preserved.

31
19. 65Deleted
20. 66Deleted
21. 67Deleted
22. Deleted
23. 68Notwithstanding anything contained in paragraph 16 and as an alternative
thereto, in case an individual who desires to open a bank account, banks shall
open a ‘Small Account’, which entails the following limitations:
i. the aggregate of all credits in a financial year does not exceed rupees one
lakh;
ii. the aggregate of all withdrawals and transfers in a month does not exceed
rupees ten thousand; and
iii. the balance at any point of time does not exceed rupees fifty thousand.
69
Provided, that this limit on balance shall not be considered while making deposits
through Government grants, welfare benefits and payment against procurements.

Further, small accounts are subject to the following conditions:

(a) The bank shall obtain a self-attested photograph from the customer.
(b) The designated officer of the bank certifies under his signature that the person
opening the account has affixed his signature or thumb impression in his
presence.
70
Provided that where the individual is a prisoner in a jail, the signature or thumb
print shall be affixed in presence of the officer in-charge of the jail and the said
officer shall certify the same under his signature and the account shall remain
operational on annual submission of certificate of proof of address issued by
the officer in-charge of the jail.

65
Deleted vide amendment dated April 20, 2018. Deleted portion read as: In case the person who proposes to open an account
does not have an OVD as ‘proof of address’, such person shall provide OVD of the relative as provided at sub-section 77 of
section 2 of the Companies Act, 2013, read with Rule 4 of Companies (Specification of definitions details) Rules, 2014, with whom
the person is staying, as the ‘proof of address’ Explanation: A declaration from the relative that the said person is a relative and
is staying with him/her shall be obtained.
66
Deleted vide amendment dated April 20, 2018. Deleted portion read as: “In cases where a customer categorised as ‘low risk’,
expresses inability to complete the documentation requirements on account of any reason that the REs consider to be genuine,
and where it is essential not to interrupt the normal conduct of business, REs shall, at their option, complete the verification of
identity of the customer within a period of six months from the date of establishment of the relationship.”
67
Deleted vide amendment dated April 20, 2018. Deleted portion read as: In respect of customers who are categorised as ‘low
risk’ and are not able to produce any of the OVDs mentioned at paragraph 3(a)(vi) of Chapter I and where ‘simplified procedure’
is applied, REs shall, accept any one document from each of the two additional sets of documents listed under the two provisos
of sub-Rule 2(1)(d). Explanation: During the periodic review, if the ‘low risk’ category customer for whom simplified procedure
is applied, is re-categorised as ‘moderate or ‘’high’ risk category, then REs shall obtain one of the six OVDs listed at paragraph
3(a)(vi) of these Directions for proof of identity and proof of address immediately. In the event such a customer fails to submit
such an OVD, REs shall initiate action as envisaged in paragraph 39 of these Directions.
68
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
69
Inserted vide Gazette Notification G.S.R. 1038(E) regarding PML Third amendment Rules dated August 21, 2017.
70
Inserted vide Gazette Notification G.S.R. 381(E) dated May 28, 2019.

32
 (c) Such accounts are opened only at Core Banking Solution (CBS) linked
branches or in a branch where it is possible to manually monitor and ensure
that foreign remittances are not credited to the account.
(d) Banks shall ensure that the stipulated monthly and annual limits on aggregate
of transactions and balance requirements in such accounts are not breached,
before a transaction is allowed to take place.
(e) The account shall remain operational initially for a period of twelve months
which can be extended for a further period of twelve months, provided the
account holder applies and furnishes evidence of having applied for any of the
OVDs during the first twelve months of the opening of the said account.
(f) The entire relaxation provisions shall be reviewed after twenty-four months.
(g) 71
Notwithstanding anything contained in clauses (e) and (f) above, the small
account shall remain operational between April 1, 2020 and June 30, 2020 and
such other periods as may be notified by the Central Government.
(h) 72
The account shall be monitored and when there is suspicion of money
laundering or financing of terrorism activities or other high-risk scenarios, the
identity of the customer shall be established as per paragraph 16 or paragraph
18.
(i) 73Foreign remittance shall not be allowed to be credited into the account unless
the identity of the customer is fully established as per paragraph 16 or
paragraph 18.

24. 74Simplified procedure for opening accounts by Non-Banking Finance

Companies (NBFCs): In case a person who desires to open an account is not able
to produce documents, as specified in paragraph 16, NBFCs may at their discretion
open accounts subject to the following conditions:
(a) The NBFC shall obtain a self-attested photograph from the customer.
(b) The designated officer of the NBFC certifies under his signature that the person
opening the account has affixed his signature or thumb impression in his
presence.
(c) 75
The account shall remain operational initially for a period of twelve months,
within which CDD as per paragraph 16 or paragraph 18 shall be carried out.

71
Inserted vide circular DOR.AML.BC.No.66/14.01.001/2019-20 dated April 20, 2020.
72
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
73
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
74
Amended vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
75
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

33
 (d) Balances in all their accounts taken together shall not exceed rupees fifty
thousand at any point of time.
(e) The total credit in all the accounts taken together shall not exceed rupees one
lakh in a year.
(f) The customer shall be made aware that no further transactions will be permitted
until the full KYC procedure is completed in case Directions (d) and (e) above
are breached by him.
(g) The customer shall be notified when the balance reaches rupees forty thousand
or the total credit in a year reaches rupees eighty thousand that appropriate
documents for conducting the KYC must be submitted otherwise the operations
in the account shall be stopped when the total balance in all the accounts taken
together exceeds the limits prescribed in direction (d) and (e) above.
(h) 76
The account shall be monitored and when there is suspicion of ML/TF
activities or other high-risk scenarios, the identity of the customer shall be
established as per paragraph 16 or paragraph 18.
25. 77Deleted.
26. 78KYC verification once done by one branch/office of the RE shall be valid for
transfer of the account to any other branch/office of the same RE, provided full
KYC verification has already been done for the concerned account and the same
is not due for periodic updation.

Part II - CDD Measures for Sole Proprietary firms

27. 79For opening an account in the name of a sole proprietary firm, CDD of the
individual (proprietor) shall be carried out.
28. 80In addition to the above, any two of the following documents or the equivalent e-
documents there of as a proof of business/ activity in the name of the proprietary
firm shall also be obtained:
(a) 81
Registration certificate including Udyam Registration Certificate (URC)
issued by the Government

76
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
77
Deleted vide amendment dated April 20, 2018 and shifted to paragraph 10. Deleted/shifted portion read as: “If an existing KYC
compliant customer of a RE desires to open another account with the same RE, there shall be no need for a fresh CDD exercise.”
78
Amended vide Gazette Notification G.S.R. 538(E) regarding PML Second amendment Rules dated June 1, 2017. Deleted
portion of paragraph 26 is as follows: “and a self-declaration from the account holder about his/her current address is obtained in
such cases.
79
Amended vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
80
Amended vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
81
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

34
 (b) Certificate/licence issued by the municipal authorities under Shop and
Establishment Act
(c) Sales and income tax returns
(d) 82
CST/VAT/ GST certificate
(e) Certificate/registration document issued by Sales Tax/Service
Tax/Professional Tax authorities
(f) IEC (Importer Exporter Code) issued to the proprietary concern by the office of
DGFT or Licence/certificate of practice issued in the name of the proprietary
concern by any professional body incorporated under a statute
(g) Complete Income Tax Return (not just the acknowledgement) in the name of
the sole proprietor where the firm's income is reflected, duly
authenticated/acknowledged by the Income Tax authorities
(h) Utility bills such as electricity, water, landline telephone bills, etc.

29. In cases where the REs are satisfied that it is not possible to furnish two such
documents, REs may, at their discretion, accept only one of those documents as
proof of business/activity.

Provided REs undertake contact point verification and collect such other
information and clarification as would be required to establish the existence of such
firm, and shall confirm and satisfy itself that the business activity has been verified
from the address of the proprietary concern.

Part III- CDD Measures for Legal Entities

30. 83For opening an account of a company, certified copies of each of the following
documents or the equivalent e-documents thereof shall be obtained:
(a) Certificate of incorporation
(b) Memorandum and Articles of Association
(c) 84
Permanent Account Number of the company
(d) A resolution from the Board of Directors and power of attorney granted to
its managers, officers or employees to transact on its behalf

82
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
83
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
84
Inserted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.

35
 (e) 85
Documents, as specified in paragraph 16, relating to beneficial owner, the
managers, officers or employees, as the case may be, holding an attorney
to transact on the company’s behalf
(f) 86
the names of the relevant persons holding senior management position;
and
(g) 87
the registered office and the principal place of its business, if it is different.

31. 88For opening an account of a partnership firm, the certified copies of each of the
following documents or the equivalent e-documents thereof shall be obtained:

(a) Registration certificate

(b) Partnership deed
(c) 89
Permanent Account Number of the partnership firm
(d) 90
Documents, as specified in paragraph 16, relating to beneficial owner,
managers, officers or employees, as the case may be, holding an attorney to
transact on its behalf
(e) 91
the names of all the partners and
(f) 92address of the registered office, and the principal place of its business, if it
is different.

32. 93For opening an account of a trust, certified copies of each of the following
documents or the equivalent e-documents thereof shall be obtained:

(a) Registration certificate

(b) Trust deed
(c) 94
Permanent Account Number or Form No.60 of the trust
(d) 95
Documents, as specified in paragraph 16, relating to beneficial owner,
managers, officers or employees, as the case may be, holding an attorney
to transact on its behalf
(e) 96
the names of the beneficiaries, trustees, settlor, protector, if any and
authors of the trust

85
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
86
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
87
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
88
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
89
Inserted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
90
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
91
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
92
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
93
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
94
Inserted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
95
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
96
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

36
 (f) 97the address of the registered office of the trust; and
(g) 98
list of trustees and documents, as specified in paragraph 16, for those
discharging the role as trustee and authorised to transact on behalf of the
trust.

33A. 99
For opening an account of an unincorporated association or a body of
individuals, certified copies of each of the following documents or the equivalent
e-documents thereof shall be obtained:

(a) Resolution of the managing body of such association or body of individuals

(b) 100
Permanent Account Number or Form No. 60 of the unincorporated
association or a body of individuals
(c) Power of attorney granted to transact on its behalf
(d) 101
Documents, as specified in paragraph 16, relating to beneficial owner,
managers, officers or employees, as the case may be, holding an attorney
to transact on its behalf and
(e) Such information as may be required by the RE to collectively establish
the legal existence of such an association or body of individuals.
Explanation: Unregistered trusts/partnership firms shall be included under the
term ‘unincorporated association’.
Explanation: Term ‘body of individuals’ includes societies.

33B. 102 For opening account of a customer who is a juridical person (not specifically
covered in the earlier part) such as societies, universities and local bodies like
village panchayats, etc., or who purports to act on behalf of such juridical person
or individual or trust, certified copies of the following documents or the equivalent
e-documents thereof shall be obtained and verified:
(a) Document showing name of the person authorised to act on behalf of the
entity
(b) Documents, as specified in paragraph 16, of the person holding an attorney
to transact on its behalf and
(c) Such documents as may be required by the RE to establish the legal
existence of such an entity/juridical person.

97
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
98
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
99
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
100
Inserted vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
101
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
102
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

37
 103
Provided that in case of a trust, the RE shall ensure that trustees disclose
their status at the time of commencement of an account-based relationship or
when carrying out transactions as specified in clauses (b), (e) and (f) of
paragraph 13 of this MD.

Part IV - Identification of Beneficial Owner

34. For opening an account of a Legal Person who is not a natural person, the
beneficial owner(s) shall be identified and all reasonable steps in terms of sub-
rule (3) of Rule 9 of the Rules to verify his/her identity shall be undertaken keeping
in view the following:
(a) 104
Where the customer or the owner of the controlling interest is (i) an entity
listed on a stock exchange in India, or (ii) it is an entity resident in
jurisdictions notified by the Central Government and listed on stock
exchanges in such jurisdictions, or (iii) it is a subsidiary of such listed
entities; it is not necessary to identify and verify the identity of any
shareholder or beneficial owner of such entities.
(b) In cases of trust/nominee or fiduciary accounts whether the customer is
acting on behalf of another person as trustee/nominee or any other
intermediary is determined. In such cases, satisfactory evidence of the
identity of the intermediaries and of the persons on whose behalf they are
acting, as also details of the nature of the trust or other arrangements in
place shall be obtained.

Part V - On-going Due Diligence

35. 105
REs shall undertake on-going due diligence of customers to ensure that their
transactions are consistent with their knowledge about the customers, customers’
business and risk profile, the source of funds / wealth.

36. Without prejudice to the generality of factors that call for close monitoring following
types of transactions shall necessarily be monitored:
(a) Large and complex transactions including RTGS transactions, and those
with unusual patterns, inconsistent with the normal and expected activity

103
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
104
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
105
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

38
 of the customer, which have no apparent economic rationale or legitimate
purpose.
(b) Transactions which exceed the thresholds prescribed for specific
categories of accounts.
(c) High account turnover inconsistent with the size of the balance
maintained.
(d) Deposit of third-party cheques, drafts, etc. in the existing and newly opened
accounts followed by cash withdrawals for large amounts.
106
For ongoing due diligence, REs may consider adopting appropriate
innovations including artificial intelligence and machine learning (AI & ML)
technologies to support effective monitoring.

37. The extent of monitoring shall be aligned with the risk category of the customer.
(a) A system of periodic review of risk categorisation of accounts, with such
periodicity being at least once in six months, and the need for applying
enhanced due diligence measures shall be put in place.
(b) The transactions in accounts of marketing firms, especially accounts of
Multi-level Marketing (MLM) Companies shall be closely monitored.
Explanation: High risk accounts have to be subjected to more intensified
monitoring.
Explanation: Cases where a large number of cheque books are sought by the
company and/or multiple small deposits (generally in cash) across the country
in one bank account and/or where a large number of cheques are issued
bearing similar amounts/dates, shall be immediately reported to Reserve Bank
of India and other appropriate authorities such as FIU-IND.
38. 107
Updation / Periodic Updation of KYC
REs shall adopt a risk-based approach for periodic updation of KYC ensuring
that the information or data collected under CDD is kept up-to-date and relevant,
particularly where there is high risk. However, periodic updation shall be carried
out at least once in every two years for high-risk customers, once in every eight
years for medium risk customers and once in every ten years for low-risk
customers from the date of opening of the account / last KYC updation. Policy in
this regard shall be documented as part of REs’ internal KYC policy duly

106
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
107
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

39
 approved by the Board of Directors of REs or any committee of the Board to
which power has been delegated.
a) Individuals:
i. No change in KYC information: In case of no change in the KYC
information, a self-declaration from the customer in this regard shall be
obtained through customer’s email-id registered with the RE, customer’s
mobile number registered with the RE, ATMs, digital channels (such as
online banking / internet banking, mobile application of RE), letter, etc.
ii. Change in address: In case of a change only in the address details of
the customer, a self-declaration of the new address shall be obtained from
the customer through customer’s email-id registered with the RE,
customer’s mobile number registered with the RE, ATMs, digital channels
(such as online banking / internet banking, mobile application of RE),
letter, etc., and the declared address shall be verified through positive
confirmation within two months, by means such as address verification
letter, contact point verification, deliverables, etc.
108
Further, REs, at their option, may obtain a copy of OVD or deemed
OVD, as defined in paragraph 3(a)(xiv), or the equivalent e-documents
thereof, as defined in paragraph 3(a)(x), for the purpose of proof of
address, declared by the customer at the time of 109
updation/ periodic
updation. Such requirement, however, shall be clearly specified by the
REs in their internal KYC policy duly approved by the Board of Directors
of REs or any committee of the Board to which power has been delegated.
iii. Accounts of customers, who were minor at the time of opening
account, on their becoming major: In case of customers for whom
account was opened when they were minor, fresh photographs shall be
obtained on their becoming a major and at that time it shall be ensured
that CDD documents as per the current CDD standards are available with
the REs. Wherever required, REs may carry out fresh KYC of such
customers i.e., customers for whom account was opened when they were
minor, on their becoming a major.

108
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
109
Inserted vide circular DOR.AML.REC. 49/14.01.001/2024-25 dated November 6, 2024.

40
 iv. 110
Aadhaar OTP based e-KYC in non-face to face mode may be used for
111
updation/ periodic updation. To clarify, conditions stipulated in
paragraph 17 are not applicable in case of updation/ periodic updation of
KYC through Aadhaar OTP based e-KYC in non-face to face mode.
Declaration of current address, if the current address is different from the
address in Aadhaar, shall not require positive confirmation in this case.
REs shall ensure that the mobile number for Aadhaar authentication is
same as the one available with them in the customer’s profile, in order to
prevent any fraud.
b) Customers other than individuals:
i. No change in KYC information: In case of no change in the KYC
information of the LE customer, a self-declaration in this regard shall be
obtained from the LE customer through its email id registered with the RE,
ATMs, digital channels (such as online banking / internet banking, mobile
application of RE), letter from an official authorized by the LE in this
regard, board resolution, etc. Further, REs shall ensure during this
process that Beneficial Ownership (BO) information available with them is
accurate and shall update the same, if required, to keep it as up-to-date
as possible.
ii. Change in KYC information: In case of change in KYC information, RE
shall undertake the KYC process equivalent to that applicable for on-
boarding a new LE customer.
c) 112
Additional measures: In addition to the above, REs shall ensure that,
i. The KYC documents of the customer as per the current CDD standards
are available with them. This is applicable even if there is no change in
customer information but the documents available with the RE are not as
per the current CDD standards. Further, in case the validity of the CDD
documents available with the RE has expired at the time of periodic
updation of KYC, RE shall undertake the KYC process equivalent to that
applicable for on-boarding a new customer.
ii. Customer’s PAN details, if available with the RE, is verified from the
database of the issuing authority at the time of periodic updation of KYC.

110
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
111
Inserted vide circular DOR.AML.REC.49/14.01.001/2024-25 dated November 6, 2024.
112
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

41
 iii. Acknowledgment is provided to the customer mentioning the date of
receipt of the relevant document(s), including self-declaration from the
customer, for carrying out 113
updation/ periodic updation. Further, it shall
be ensured that the information / documents obtained from the customers
at the time of 114
updation/ periodic updation of KYC are promptly updated
in the records / database of the REs and an intimation, mentioning the
date of updation of KYC details, is provided to the customer.
iv. In order to ensure customer convenience, REs may consider making
available the facility of 115
updation/ periodic updation of KYC at any
branch, in terms of their internal KYC policy duly approved by the Board
of Directors of REs or any committee of the Board to which power has
been delegated.
v. REs shall adopt a risk-based approach with respect to periodic updation
of KYC. Any additional and exceptional measures, which otherwise are
not mandated under the above instructions, adopted by the REs such as
requirement of obtaining recent photograph, requirement of physical
presence of the customer, requirement of periodic updation of KYC only
in the branch of the RE where account is maintained, a more frequent
periodicity of KYC updation than the minimum specified periodicity etc.,
shall be clearly specified in the internal KYC policy duly approved by the
Board of Directors of REs or any committee of the Board to which power
has been delegated.
d) 116
REs shall advise the customers that in order to comply with the PML Rules, in
case of any update in the documents submitted by the customer at the time of
establishment of business relationship/ account-based relationship and thereafter,
as necessary; customers shall submit to the REs the update of such documents.
This shall be done within 30 days of the update to the documents for the purpose
of updating the records at REs’ end.

39. 117In case of existing customers, RE shall obtain the Permanent Account Number
or equivalent e-document thereof or Form No. 60, by such date as may be notified
by the Central Government, failing which RE shall temporarily cease operations in

113
Inserted vide circular DOR.AML.REC.49 /14.01.001/2024-25 dated November 6, 2024.
114
Inserted vide circular DOR.AML.REC.49/14.01.001/2024-25 dated November 6, 2024.
115
Inserted vide circular DOR.AML.REC.49/14.01.001/2024-25 dated November 6, 2024.
116
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
117
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.

42
 the account till the time the Permanent Account Number or equivalent e-documents
thereof or Form No. 60 is submitted by the customer.

Provided that before temporarily ceasing operations for an account, the RE shall
give the customer an accessible notice and a reasonable opportunity to be heard.
Further, RE shall include, in its internal policy, appropriate relaxation(s) for
continued operation of accounts for customers who are unable to provide
Permanent Account Number or equivalent e-document thereof or Form No. 60
owing to injury, illness or infirmity on account of old age or otherwise, and such like
causes. Such accounts shall, however, be subject to enhanced monitoring.

Provided further that if a customer having an existing account-based relationship

with a RE gives in writing to the RE that he does not want to submit his Permanent
Account Number or equivalent e-document thereof or Form No.60, RE shall close
the account and all obligations due in relation to the account shall be appropriately
settled after establishing the identity of the customer by obtaining the identification
documents as applicable to the customer.

Explanation – For the purpose of this paragraph, “temporary ceasing of

operations” in relation an account shall mean the temporary suspension of all
transactions or activities in relation to that account by the RE till such time the
customer complies with the provisions of this paragraph. In case of asset accounts
such as loan accounts, for the purpose of ceasing the operation in the account,
only credits shall be allowed.

Part VI - Enhanced and Simplified Due Diligence Procedure

A. Enhanced Due Diligence

40. 118Enhanced Due Diligence (EDD) for non-face-to-face customer

onboarding (other than customer onboarding in terms of paragraph
17): Non-face-to-face onboarding facilitates the REs to establish relationship with
the customer without meeting the customer physically or through V-CIP. Such
non-face-to-face modes for the purpose of this paragraph includes use of digital
channels such as CKYCR, DigiLocker, equivalent e-document, etc., and non-
digital modes such as obtaining copy of OVD certified by additional certifying
authorities as allowed for NRIs and PIOs. Following EDD measures shall be

118
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

43
 undertaken by REs for non-face-to-face customer onboarding (other than
customer onboarding in terms of paragraph 17):

a) In case RE has introduced the process of V-CIP, the same shall be provided
as the first option to the customer for remote onboarding. It is reiterated that
processes complying with prescribed standards and procedures for V-CIP shall
be treated on par with face-to-face CIP for the purpose of this Master Direction.

b) In order to prevent frauds, alternate mobile numbers shall not be linked post
CDD with such accounts for transaction OTP, transaction updates, etc.
Transactions shall be permitted only from the mobile number used for account
opening. RE shall have a Board approved policy delineating a robust process of
due diligence for dealing with requests for change of registered mobile number.

c) Apart from obtaining the current address proof, RE shall verify the current
address through positive confirmation before allowing operations in the account.
Positive confirmation may be carried out by means such as address verification
letter, contact point verification, deliverables, etc.

d) RE shall obtain PAN from the customer and the PAN shall be verified from the
verification facility of the issuing authority.

e) First transaction in such accounts shall be a credit from existing KYC-complied

bank account of the customer.

f) Such customers shall be categorized as high-risk customers and accounts

opened in non-face to face mode shall be subjected to enhanced monitoring until
the identity of the customer is verified in face-to-face manner or through V-CIP.

41. 119Accounts of Politically Exposed Persons (PEPs)

A. REs shall have the option of establishing a relationship with PEPs (whether as
customer or beneficial owner) provided that, apart from performing normal
customer due diligence:
(a) REs have in place appropriate risk management systems to determine
whether the customer or the beneficial owner is a PEP;

119
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

44
 (b) Reasonable measures are taken by the REs for establishing the source of
funds / wealth;
(c) the approval to open an account for a PEP shall be obtained from the
senior management;
(d) all such accounts are subjected to enhanced monitoring on an on-going
basis;
(e) in the event of an existing customer or the beneficial owner of an existing
account subsequently becoming a PEP, senior management’s approval is
obtained to continue the business relationship;
B. These instructions shall also be applicable to family members or close
associates of PEPs.
120
Explanation: For the purpose of this paragraph, “Politically Exposed Persons”
(PEPs) are individuals who are or have been entrusted with prominent public
functions by a foreign country, including the Heads of States/Governments,
senior politicians, senior government or judicial or military officers, senior
executives of state-owned corporations and important political party officials.

42. Client accounts opened by professional intermediaries:

REs shall ensure while opening client accounts through professional
intermediaries, that:
(a) Clients shall be identified when client account is opened by a professional
intermediary on behalf of a single client.
(b) REs shall have option to hold 'pooled' accounts managed by professional
intermediaries on behalf of entities like mutual funds, pension funds or other
types of funds.
(c) REs shall not open accounts of such professional intermediaries who are
bound by any client confidentiality that prohibits disclosure of the client
details to the RE.
(d) All the beneficial owners shall be identified where funds held by the
intermediaries are not co-mingled at the level of RE, and there are 'sub-
accounts', each of them attributable to a beneficial owner, or where such
funds are co-mingled at the level of RE, the RE shall look for the beneficial
owners.

120
Inserted vide circular DOR.AML.REC.66/14.01.001/2023-24 dated January 04, 2024.

45
 (e) REs shall, at their discretion, rely on the 'customer due diligence' (CDD) done
by an intermediary, provided that the intermediary is a regulated and
supervised entity and has adequate systems in place to comply with the KYC
requirements of the customers.
(f) The ultimate responsibility for knowing the customer lies with the RE.

B. Simplified Due Diligence

43. 121Simplified norms for Self Help Groups (SHGs)

(a) CDD of all the members of SHG shall not be required while opening the savings
bank account of the SHG.
(b) CDD of all the office bearers shall suffice.
(c) 122
CDD of all the members of SHG may be undertaken at the time of credit
linking of SHGs.

44. Procedure to be followed by banks while opening accounts of foreign

students
(a) Banks shall, at their option, open a Non-Resident Ordinary (NRO) bank account
of a foreign student on the basis of his/her passport (with visa & immigration
endorsement) bearing the proof of identity and address in the home country
together with a photograph and a letter offering admission from the educational
institution in India.
i. Provided that a declaration about the local address shall be obtained within
a period of 30 days of opening the account and the said local address is
verified.
ii. Provided further that pending the verification of address, the account shall
be operated with a condition of allowing foreign remittances not exceeding
USD 1,000 or equivalent into the account and a cap of rupees fifty thousand
on aggregate in the same, during the 30-day period.
(b) The account shall be treated as a normal NRO account, and shall be operated
in terms of Reserve Bank of India’s instructions on Non-Resident Ordinary
Rupee (NRO) Account, and the provisions of FEMA 1999.
(c) Students with Pakistani nationality shall require prior approval of the Reserve
Bank for opening the account.

121
Amended vide circular DBR.AML.BC.No.39/14.01.001/2018-19 dated May 29, 2019.
122
Amended vide circular DOR.AML.BC.No.1/14.01.001/2021-22 dated April 1, 2021.

46
45. Simplified KYC norms for Foreign Portfolio Investors (FPIs)
Accounts of FPIs which are eligible/ registered as per SEBI guidelines, for the
purpose of investment under Portfolio Investment Scheme (PIS), shall be opened
by accepting KYC documents as detailed in Annex IV, subject to Income Tax
(FATCA/CRS) Rules.

Provided that banks shall obtain undertaking from FPIs or the Global Custodian
acting on behalf of the FPI that as and when required, the exempted documents
as detailed in Annex IV will be submitted.

47
 Chapter VII

Record Management

46. 123The following steps shall be taken regarding maintenance, preservation and
reporting of customer information, with reference to provisions of PML Act and
Rules. REs shall,
(a) maintain all necessary records of transactions between the RE and the
customer, both domestic and international, for at least five years from the date
of transaction;
(b) preserve the records pertaining to the identification of the customers and their
addresses obtained while opening the account and during the course of
business relationship, for at least five years after the business relationship is
ended;
(c) 124
make available swiftly, the identification records and transaction data to the
competent authorities upon request;
(d) introduce a system of maintaining proper record of transactions prescribed
under Rule 3 of Prevention of Money Laundering (Maintenance of Records)
Rules, 2005 (PML Rules, 2005);
(e) maintain all necessary information in respect of transactions prescribed under
PML Rule 3 so as to permit reconstruction of individual transaction, including
the following:
(i) the nature of the transactions;
(ii) the amount of the transaction and the currency in which it was
denominated;
(iii) the date on which the transaction was conducted; and
(iv) the parties to the transaction.
(f) evolve a system for proper maintenance and preservation of account
information in a manner that allows data to be retrieved easily and quickly
whenever required or when requested by the competent authorities;
(g) maintain records of the identity and address of their customer, and records
in respect of transactions referred to in Rule 3 in hard or soft format.

125
Explanation. – For the purpose of this paragraph, the expressions "records
pertaining to the identification", “identification records”, etc., shall include

123
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
124
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
125
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

48
 updated records of the identification data, account files, business
correspondence and results of any analysis undertaken.

46A. REs shall ensure that in case of customers who are non-profit organisations, the
details of such customers are registered on the DARPAN Portal of NITI Aayog. If
the same are not registered, RE shall register the details on the DARPAN Portal.
REs shall also maintain such registration records for a period of five years after
the business relationship between the customer and the RE has ended or the
account has been closed, whichever is later.

49
 Chapter VIII

Reporting Requirements to Financial Intelligence Unit - India

47. REs shall furnish to the Director, Financial Intelligence Unit-India (FIU-IND),
information referred to in rule 3 of the PML (Maintenance of Records) Rules,
2005 in terms of rule 7 thereof.
Explanation: In terms of Third Amendment Rules notified September 22, 2015
regarding amendment to sub rule 3 and 4 of rule 7, Director, FIU-IND shall have
powers to issue guidelines to the REs for detecting transactions referred to in
various clauses of sub-rule (1) of rule 3, to direct them about the form of furnishing
information and to specify the procedure and the manner of furnishing information.

48. The reporting formats and comprehensive reporting format guide, prescribed/
released by FIU-IND and Report Generation Utility and Report Validation Utility
developed to assist reporting entities in the preparation of prescribed reports
shall be taken note of. The editable electronic utilities to file electronic Cash
Transaction Reports (CTR) / Suspicious Transaction Reports (STR) which FIU-
IND has placed on its website shall be made use of by REs which are yet to
install/adopt suitable technological tools for extracting CTR/STR from their live
transaction data. The Principal Officers of those REs, whose all branches are
not fully computerized, shall have suitable arrangement to cull out the
transaction details from branches which are not yet computerized and to feed
the data into an electronic file with the help of the editable electronic utilities of
CTR/STR as have been made available by FIU-IND on its website
http://fiuindia.gov.in.

49. 126While furnishing information to the Director, FIU-IND, delay of each day in
not reporting a transaction or delay of each day in rectifying a mis-represented
transaction beyond the time limit as specified in the Rule shall be constituted as
a separate violation. REs shall not put any restriction on operations in the
accounts merely on the basis of the STR filed.

Every RE, its directors, officers, and all employees shall ensure that the fact of
maintenance of records referred to in rule 3 of the PML (Maintenance of
Records) Rules, 2005 and furnishing of the information to the Director is

126
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

50
 confidential. However, such confidentiality requirement shall not inhibit sharing
of information under paragraph 4(b) of this Master Direction of any analysis of
transactions and activities which appear unusual, if any such analysis has been
done.

50. Robust software, throwing alerts when the transactions are inconsistent with
risk categorization and updated profile of the customers shall be put in to use
as a part of effective identification and reporting of suspicious transactions.

51
 Chapter IX

Requirements/obligations under International Agreements -

Communications from International Agencies

51. 127Obligations under the Unlawful Activities (Prevention) (UAPA) Act, 1967:
(a) REs shall ensure that in terms of section 51A of the Unlawful Activities
(Prevention) (UAPA) Act, 1967 and amendments thereto, they do not have any
account in the name of individuals/entities appearing in the lists of individuals
and entities, suspected of having terrorist links, which are approved by and
periodically circulated by the United Nations Security Council (UNSC). The
details of the two lists are as under:
i. The “ISIL (Da’esh) &Al-Qaida Sanctions List”, established and
maintained pursuant to Security Council resolutions 1267/1989/2253,
which includes names of individuals and entities associated with the Al-
Qaida is available at
https://scsanctions.un.org/ohz5jen-al-qaida.html
ii. The “Taliban Sanctions List”, established and maintained pursuant to
Security Council resolution 1988 (2011), which includes names of
individuals and entities associated with the Taliban is available at
https://scsanctions.un.org/3ppp1en-taliban.htm
REs shall also ensure to refer to the lists as available in the Schedules to the
Prevention and Suppression of Terrorism (Implementation of Security Council
Resolutions) Order, 2007, as amended from time to time. The aforementioned
lists, i.e., UNSC Sanctions Lists and lists as available in the Schedules to the
Prevention and Suppression of Terrorism (Implementation of Security Council
Resolutions) Order, 2007, as amended from time to time, shall be verified on
daily basis and any modifications to the lists in terms of additions, deletions or
other changes shall be taken into account by the REs for meticulous
compliance.
(b) Details of accounts resembling any of the individuals/entities in the lists
shall be reported to FIU-IND apart from advising Ministry of Home Affairs
(MHA) as required under UAPA notification dated 128February 2, 2021 (Annex II
of this Master Direction).

127
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023. Further, earlier paragraphs 51, 52 and
53 have been consolidated in paragraph 51 vide this amendment.
128
Amended vide circular DOR.AML.REC.48/14.01.001/2020-21 dated March 23, 2021.

52
 (c) Freezing of Assets under section 51A of UAPA, 1967: The procedure laid down
in the UAPA Order dated 129February 2, 2021 (Annex II of this Master Direction),
shall be strictly followed and meticulous compliance with the Order issued by
the Government shall be ensured. The list of Nodal Officers for UAPA is
available on the website of MHA.

52. 130
Obligations under Weapons of Mass Destruction (WMD) and their
Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 (WMD Act,
2005):
(a) 131
REs shall ensure meticulous compliance with the “Procedure for
Implementation of section 12A of the Weapons of Mass Destruction (WMD)
and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005” laid
down in terms of section 12A of the WMD Act, 2005 vide Order dated
September 1, 2023, by the Ministry of Finance, Government of India (Annex
III of this Master Direction).
(b) In accordance with paragraph 3 of the aforementioned Order, REs shall
ensure not to carry out transactions in case the particulars of the individual /
entity match with the particulars in the designated list.
(c) Further, REs shall run a check, on the given parameters, at the time of
establishing a relation with a customer and on a periodic basis to verify
whether individuals and entities in the designated list are holding any funds,
financial asset, etc., in the form of bank account, etc.
(d) 132
In case of match in the above cases, REs shall immediately inform the
transaction details with full particulars of the funds, financial assets or
economic resources involved to the Central Nodal Officer (CNO), designated
as the authority to exercise powers under section 12A of the WMD Act, 2005.
A copy of the communication shall be sent to State Nodal Officer, where the
account / transaction is held and to the RBI.
It may be noted that in terms of Paragraph 1 of the Order, Director, FIU-India
has been designated as the CNO.
(e) REs may refer to the designated list, as amended from time to time, available
on the portal of FIU-India.

129
Amended vide circular DOR.AML.REC.48/14.01.001/2020-21 dated March 23, 2021.
130
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
131
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
132
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

53
 (f) In case there are reasons to believe beyond doubt that funds or assets held
by a customer would fall under the purview of clause (a) or (b) of sub-section
(2) of section 12A of the WMD Act, 2005, REs shall prevent such
individual/entity from conducting financial transactions, under intimation to the
CNO by email, FAX and by post, without delay.
(g) In case an order to freeze assets under section 12A is received by the REs
from the CNO, REs shall, without delay, take necessary action to comply with
the Order.
(h) The process of unfreezing of funds, etc., shall be observed as per paragraph
7 of the Order. Accordingly, copy of application received from an
individual/entity regarding unfreezing shall be forwarded by RE along with full
details of the asset frozen, as given by the applicant, to the CNO by email, FAX
and by post, within two working days.

53. REs shall verify every day, the ‘UNSCR 1718 Sanctions List of Designated
Individuals and Entities‘, as available at https://www.mea.gov.in/Implementation-
of-UNSC-Sanctions-DPRK.htm, to take into account any modifications to the list in
terms of additions, deletions or other changes and also ensure compliance with the
‘Implementation of Security Council Resolution on Democratic People’s Republic
of Korea Order, 2017’, as amended from time to time by the Central Government.

53A. 133
In addition to the above, REs shall take into account – (a) other UNSCRs and
(b) lists in the first schedule and the fourth schedule of UAPA, 1967 and any
amendments to the same for compliance with the Government orders on
implementation of section 51A of the UAPA and section 12A of the WMD Act.

53B. 134
REs shall undertake countermeasures when called upon to do so by any
international or intergovernmental organisation of which India is a member and
accepted by the Central Government.

54. Jurisdictions that do not or insufficiently apply the FATF Recommendations

(a) 135
FATF Statements circulated by Reserve Bank of India from time to time, and
publicly available information, for identifying countries, which do not or
insufficiently apply the FATF Recommendations, shall be considered. REs shall

133
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
134
Inserted vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
135
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

54
 apply enhanced due diligence measures, which are effective and proportionate
to the risks, to business relationships and transactions with natural and legal
persons (including financial institutions) from countries for which this is called
for by the FATF.
(b) Special attention shall be given to business relationships and transactions with
persons (including legal persons and other financial institutions) from or in
countries that do not or insufficiently apply the FATF Recommendations and
jurisdictions included in FATF Statements.
Explanation: The processes referred to in (a) & (b) above do not preclude REs
from having legitimate trade and business transactions with the countries and
jurisdictions mentioned in the FATF statement.
(c) The background and purpose of transactions with persons (including legal
persons and other financial institutions) from jurisdictions included in FATF
Statements and countries that do not or insufficiently apply the FATF
Recommendations shall be examined, and written findings together with all
documents shall be retained and shall be made available to Reserve
Bank/other relevant authorities, on request.

54A. 136
REs are encouraged to leverage latest technological innovations and tools for
effective implementation of name screening to meet the sanctions requirements.

136
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

55
 Chapter X

Other Instructions

55. 137Secrecy Obligations and Sharing of Information:

(a) REs shall maintain secrecy regarding the customer information which arises out of
the contractual relationship between the RE and customer.
(b) Information collected from customers for the purpose of opening of account shall
be treated as confidential and details thereof shall not be divulged for the purpose
of cross selling, or for any other purpose without the express permission of the
customer.
(c) While considering the requests for data/information from Government and other
agencies, REs shall satisfy themselves that the information being sought is not of
such a nature as will violate the provisions of the laws relating to secrecy in the
transactions.
(d) The exceptions to the said rule shall be as under:
i. Where disclosure is under compulsion of law,
ii. Where there is a duty to the public to disclose,
iii. Where the interest of RE requires disclosure, and
iv. Where the disclosure is made with the express or implied consent of the
customer.

55A. 138Compliance with the provisions of Foreign Contribution (Regulation)

Act, 2010
Banks shall ensure adherence to the provisions of Foreign Contribution
(Regulation) Act, 2010 and Rules made thereunder. Further, banks shall also
ensure meticulous compliance with any instructions / communications on the
matter issued from time to time by the Reserve Bank based on advice received
from the Ministry of Home Affairs, Government of India.

56. 139CDD Procedure and sharing KYC information with Central KYC Records
Registry (CKYCR)
(a) Government of India has authorised the Central Registry of Securitisation Asset
Reconstruction and Security Interest of India (CERSAI), to act as, and to
perform the functions of the CKYCR vide Gazette Notification No. S.O. 3183(E)
dated November 26, 2015.

137
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
138
Inserted vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.
139
Amended vide circular DOR.AML.BC.No.31/14.01.001/2020-21 dated December 18, 2020.

56
 (b) In terms of provision of Rule 9(1A) of the PML Rules, the REs shall capture
customer’s KYC records and upload onto CKYCR within 10 days of
commencement of an account-based relationship with the customer.
(c) Operational Guidelines for uploading the KYC data have been released by
CERSAI.
(d) REs shall capture the KYC information for sharing with the CKYCR in the
manner mentioned in the Rules, as per the KYC templates prepared for
‘Individuals’ and ‘Legal Entities’ (LEs), as the case may be. The templates may
be revised from time to time, as may be required and released by CERSAI.
(e) The ‘live run’ of the CKYCR started from July 15, 2016 in phased manner
beginning with new ‘individual accounts’. Accordingly, Scheduled Commercial
Banks (SCBs) are required to invariably upload the KYC data pertaining to all
new individual accounts opened on or after January 1, 2017, with CKYCR.
SCBs were initially allowed time up-to February 1, 2017, for uploading data in
respect of accounts opened during January 2017.
REs other than SCBs were required to start uploading the KYC data pertaining
to all new individual accounts opened on or after from April 1, 2017, with
CKYCR in terms of the provisions of the Rules ibid.
(f) REs shall upload KYC records pertaining to accounts of LEs opened on or after
April 1, 2021, with CKYCR in terms of the provisions of the Rules ibid. The KYC
records have to be uploaded as per the LE Template released by CERSAI.
(g) Once KYC Identifier is generated by CKYCR, REs shall ensure that the same
is communicated to the individual/LE as the case may be.
(h) In order to ensure that all KYC records are incrementally uploaded on to
CKYCR, REs shall upload/update the KYC data pertaining to accounts of
individual customers and LEs opened prior to the above-mentioned dates as
per clauses (e) and (f), respectively, at the time of periodic updation as specified
in paragraph 38 of this Master Direction, or earlier, when the updated KYC
information is obtained/received from the customer. 140
Also, whenever the RE
obtains additional or updated information from any customer as per clause (j)
below in this paragraph or Rule 9 (1C) of the PML Rules, the RE shall within
seven days or within such period as may be notified by the Central Government,
furnish the updated information to CKYCR, which shall update the KYC records
of the existing customer in CKYCR. CKYCR shall thereafter inform

140
Inserted vide circular DOR.AML.REC. 49/14.01.001/2024-25 dated November 6, 2024.

57
 electronically all the reporting entities who have dealt with the concerned
customer regarding updation of KYC record of the said customer. Once CKYCR
informs an RE regarding an update in the KYC record of an existing customer,
the RE shall retrieve the updated KYC records from CKYCR and update the
KYC record maintained by the RE.
(i) REs shall ensure that during periodic updation, the customers are migrated to
the current CDD standard.
(j) 141
For the purpose of establishing an account-based relationship, updation/
periodic updation or for verification of identity of a customer, the RE shall seek
the KYC Identifier from the customer or retrieve the KYC Identifier, if available,
from the CKYCR and proceed to obtain KYC records online by using such KYC
Identifier and shall not require a customer to submit the same KYC records or
information or any other additional identification documents or details, unless–
(i) there is a change in the information of the customer as existing in the
records of CKYCR; or
(ii) the KYC record or information retrieved is incomplete or is not as per the
current applicable KYC norms; or
(iii) 142the validity period of downloaded documents has lapsed; or
(iv) the RE considers it necessary in order to verify the identity or address
(including current address) of the customer, or to perform enhanced due
diligence or to build an appropriate risk profile of the customer.

57. Reporting requirement under Foreign Account Tax Compliance Act (FATCA)
and Common Reporting Standards (CRS)

Under FATCA and CRS, REs shall adhere to the provisions of Income Tax Rules
114F, 114G and 114H and determine whether they are a Reporting Financial
Institution as defined in Income Tax Rule 114F and if so, shall take following steps for
complying with the reporting requirements:
(a) Register on the related e-filling portal of Income Tax Department as Reporting
Financial Institutions at the link https://incometaxindiaefiling.gov.in/ post login -
-> My Account --> Register as Reporting Financial Institution,

141
Amended vide circular DOR.AML.REC. 49/14.01.001/2024-25 dated November 6, 2024.
142
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

58
 (b) Submit online reports by using the digital signature of the ‘Designated Director’
by either uploading the Form 61B or ‘NIL’ report, for which, the schema
prepared by Central Board of Direct Taxes (CBDT) shall be referred to.

Explanation: REs shall refer to the spot reference rates published by Foreign
Exchange Dealers’ Association of India (FEDAI) on their website at
http://www.fedai.org.in/RevaluationRates.aspx for carrying out the due
diligence procedure for the purposes of identifying reportable accounts in terms
of Rule 114H.

(c) Develop Information Technology (IT) framework for carrying out due diligence
procedure and for recording and maintaining the same, as provided in Rule
114H.

(d) Develop a system of audit for the IT framework and compliance with Rules
114F, 114G and 114H of Income Tax Rules.
(e) Constitute a “High Level Monitoring Committee” under the Designated Director
or any other equivalent functionary to ensure compliance.
(f) Ensure compliance with updated instructions/ rules/ guidance notes/ Press
releases/ issued on the subject by Central Board of Direct Taxes (CBDT) from
time to time and available on the web site
http://www.incometaxindia.gov.in/Pages/default.aspx. REs may take note of
the following:

i. updated Guidance Note on FATCA and CRS

ii. a press release on ‘Closure of Financial Accounts’ under Rule 114H (8).
58. Period for presenting payment instruments

Payment of cheques/drafts/pay orders/banker’s cheques, if they are presented beyond

the period of three months from the date of such instruments, shall not be made.

59. 143Operation of Bank Accounts & Money Mules

The instructions on opening of accounts and monitoring of transactions shall be strictly

adhered to, in order to minimise the operations of “Money Mules” which are 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 which act as “money
mules.” Banks shall undertake diligence measures and meticulous monitoring to identify

143
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

59
accounts which are operated as Money Mules and take appropriate action, including
reporting of suspicious transactions to FIU-IND. Further, if it is established that an account
opened and operated is that of a Money Mule, but no STR was filed by the concerned
bank, it shall then be deemed that the bank has not complied with these directions.

60. Collection of Account Payee Cheques

Account payee cheques for any person other than the payee constituent shall not be
collected. Banks shall, at their option, collect account payee cheques drawn for an
amount not exceeding rupees fifty thousand to the account of their customers who are
co-operative credit societies, provided the payees of such cheques are the
constituents of such co-operative credit societies.

61. (a) 144

A Unique Customer Identification Code (UCIC) shall be allotted while
entering into new relationships with individual customers as also the existing
individual customers by REs.

(b) 145
The REs shall, at their option, not issue UCIC to all walk-in/occasional
customers provided it is ensured that there is adequate mechanism to identify such
walk-in customers who have frequent transactions with them and ensure that they
are allotted UCIC.

62. 146
Introduction of New Technologies

REs shall identify and assess the ML/TF risks that may arise in relation to the
development of new products and new business practices, including new delivery
mechanisms, and the use of new or developing technologies for both new and pre-
existing products.

Further, REs shall ensure:

(a) to undertake the ML/TF risk assessments prior to the launch or use of such
products, practices, services, technologies; and

(b) adoption of a risk-based approach to manage and mitigate the risks through
appropriate EDD measures and transaction monitoring, etc.

144
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
145
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.
146
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

60
63. 147Correspondent Banking

Banks shall have a policy approved by their Boards, or by a committee headed by the
Chairman/CEO/MD to lay down parameters for approving cross-border correspondent
banking and other similar relationships. In addition to performing normal CDD measures,
such relationships shall be subject to the following conditions:

(a) Banks shall gather sufficient information about a respondent bank to understand fully
the nature of the respondent bank’s business and to determine from publicly available
information the reputation of the respondent bank and the quality of supervision,
including whether it has been subjected to a ML/TF investigation or regulatory action.
Banks shall assess the respondent bank’s AML/CFT controls.
(b) The information gathered in relation to the nature of business of the respondent
bank shall include information on management, major business activities,
purpose of opening the account, identity of any third-party entities that will use
the correspondent banking services, regulatory/supervisory framework in the
respondent bank’s home country among other relevant information.
(c) Prior approval from senior management shall be obtained for establishing new
correspondent banking relationships. However, post facto approval of the
Board or the Committee empowered for this purpose shall also be taken.
(d) Banks shall clearly document and understand the respective AML/CFT
responsibilities of institutions involved.
(e) In the case of payable-through-accounts, the correspondent bank shall be
satisfied that the respondent bank has conducted CDD on the customers
having direct access to the accounts of the correspondent bank and is
undertaking on-going 'due diligence' on them.
(f) The correspondent bank shall ensure that the respondent bank is able to
provide the relevant CDD information immediately on request.
(g) Correspondent relationship shall not be entered into or continued with a shell
bank.
(h) It shall be ensured that the respondent banks do not permit their accounts to be
used by shell banks.

(i) Banks shall be cautious of correspondent banking relationships with institutions

located in jurisdictions which have strategic deficiencies or have not made
sufficient progress in implementation of FATF Recommendations.

147
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

61
 (j) Banks shall ensure that respondent banks have KYC/AML policies and
procedures in place and apply enhanced 'due diligence' procedures for
transactions carried out through the correspondent accounts.

64. 148
Wire Transfer
A. Information requirements for wire transfers for the purpose of this Master
Direction:
i. All cross-border wire transfers shall be accompanied by accurate,
complete, and meaningful originator and beneficiary information as
mentioned below:
a. name of the originator;
b. the originator account number where such an account is used to
process the transaction;
c. the originator’s address, or national identity number, or customer
identification number, or date and place of birth;
d. name of the beneficiary; and
e. the beneficiary account number where such an account is used to
process the transaction.

In the absence of an account, a unique transaction reference number should be

included which permits traceability of the transaction.

ii. In case of batch transfer, where several individual cross-border wire

transfers from a single originator are bundled in a batch file for transmission
to beneficiaries, they (i.e., individual transfers) are exempted from the
requirements of clause (i) above in respect of originator information,
provided that they include the originator’s account number or unique
transaction reference number, as mentioned above, and the batch file
contains required and accurate originator information, and full beneficiary
information, that is fully traceable within the beneficiary country.
iii. Domestic wire transfer, where the originator is an account holder of the
ordering RE, shall be accompanied by originator and beneficiary information,
as indicated for cross-border wire transfers in (i) and (ii) above.
iv. 149
Domestic wire transfers of rupees fifty thousand and above, where the
originator is not an account holder of the ordering RE, shall also be

148
Amended vide circular DOR.AML.REC.13/14.01.001/2023-24 dated May 4, 2023.
149
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

62
 accompanied by originator and beneficiary information as indicated for
cross-border wire transfers.
In case of domestic wire transfers below rupees fifty thousand where the
originator is not an account holder of the ordering RE and where the
information accompanying the wire transfer can be made available to the
beneficiary RE and appropriate authorities by other means, it is sufficient
for the ordering RE to include a unique transaction reference number,
provided that this number or identifier will permit the transaction to be
traced back to the originator or the beneficiary.
The ordering RE shall make the information available within three
working/business days of receiving the request from the intermediary RE,
beneficiary RE, or from appropriate competent authorities.
v. 150
REs shall ensure that all the information on the wire transfers shall be
immediately made available to appropriate law enforcement authorities,
prosecuting / competent authorities as well as FIU-IND on receiving such
requests with appropriate level provisions.
vi. The wire transfer instructions are not intended to cover the following types of
payments:
a. Any transfer that flows from a transaction carried out using a credit
card / debit card / Prepaid Payment Instrument (PPI), including through
a token or any other similar reference string associated with the card /
PPI, for the purchase of goods or services, so long as the credit or
debit card number or PPI id or reference number accompanies all
transfers flowing from the transaction. However, when a credit or debit
card or PPI is used as a payment system to effect a person-to-person
wire transfer, the wire transfer instructions shall apply to such
transactions and the necessary information should be included in the
message.
b. Financial institution-to-financial institution transfers and settlements,
where both the originator person and the beneficiary person are
regulated financial institutions acting on their own behalf.
It is, however, clarified that nothing within these instructions will impact the
obligation of an RE to comply with applicable reporting requirements under

150
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

63
 PML Act, 2002, and the Rules made thereunder, or any other statutory
requirement in force.
B. Responsibilities of ordering RE, intermediary RE and beneficiary RE,
effecting wire transfer, are as under:
i. Ordering RE:
a. The ordering RE shall ensure that all cross-border and qualifying
domestic wire transfers {viz., transactions as per clauses (iii) and (iv)
of paragraph ‘A’ above}, contain required and accurate originator
information and required beneficiary information, as indicated above.
b. Customer Identification shall be made if a customer, who is not an
account holder of the ordering RE, is intentionally structuring
domestic wire transfers below rupees fifty thousand to avoid
reporting or monitoring. In case of non-cooperation from the
customer, efforts shall be made to establish identity and if the same
transaction is found to be suspicious, STR may be filed with FIU-IND
in accordance with the PML Rules.
c. Ordering RE shall not execute the wire transfer if it is not able to
comply with the requirements stipulated in this paragraph.
ii. Intermediary RE:
a. RE processing an intermediary element of a chain of wire transfers
shall ensure that all originator and beneficiary information
accompanying a wire transfer is retained with the transfer.
b. Where technical limitations prevent the required originator or
beneficiary information accompanying a cross-border wire transfer
from remaining with a related domestic wire transfer, the intermediary
RE shall keep a record, for at least five years, of all the information
received from the ordering financial institution or another intermediary
RE.
c. Intermediary RE shall take reasonable measures to identify cross-
border wire transfers that lack required originator information or
required beneficiary information. Such measures should be consistent
with straight-through processing.
d. Intermediary RE shall have effective risk-based policies and
procedures for determining: (a) when to execute, reject, or suspend a
wire transfer lacking required originator or required beneficiary
information; and (b) the appropriate follow-up action including seeking

64
 further information and if the transaction is found to be suspicious,
reporting to FIU-IND in accordance with the PML Rules.
iii. Beneficiary RE:
a. Beneficiary RE shall take reasonable measures, including post-event
monitoring or real-time monitoring where feasible, to identify cross-
border wire transfers and qualifying domestic wire transfers {viz.,
transactions as per clauses (iii) and (iv) of paragraph ‘A’ above}, that
lack required originator information or required beneficiary
information.
b. Beneficiary RE shall have effective risk-based policies and procedures
for determining: (a) when to execute, reject, or suspend a wire transfer
lacking required originator or required beneficiary information; and (b)
the appropriate follow-up action follow-up action including seeking
further information and if the transaction is found to be suspicious,
reporting to FIU-IND in accordance with the PML Rules.
iv. 151
Money Transfer Service Scheme (MTSS) providers and other REs, are
required to comply with all of the relevant requirements of this paragraph,
whether they are providing services directly or through their agents. REs that
control both the ordering and the beneficiary side of a wire transfer shall:
a. take into account all the information from both the ordering and
beneficiary sides in order to determine whether an STR has to be filed;
and
b. file an STR with FIU, in accordance with the PML Rules, if a transaction
is found to be suspicious.
C. Other Obligations
i. Obligations in respect of REs’ engagement or involvement with
unregulated entities in the process of wire transfer
REs shall be cognizant of their obligations under these instructions and ensure
strict compliance, in respect of engagement or involvement of any unregulated
entities in the process of wire transfer. More specifically, whenever there is
involvement of any unregulated entities in the process of wire transfers, the
concerned REs shall be fully responsible for information, reporting and other
requirements and therefore shall ensure, inter alia, that,

151
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

65
 i) there is unhindered flow of complete wire transfer information, as
mandated under these directions, from and through the unregulated
entities involved;
ii) the agreement / arrangement, if any, with such unregulated entities by
REs clearly stipulates the obligations under wire transfer instructions; and
iii) a termination clause is available in their agreement / arrangement, if
any, with such entities so that in case the unregulated entities are unable
to support the wire information requirements, the agreement /
arrangement can be terminated. Existing agreements / arrangements, if
any, with such entities shall be reviewed within three months to ensure
aforementioned requirements.
ii. REs’ responsibility while undertaking cross-border wire transfer with
respect to name screening (such that they do not process cross-border
transactions of designated persons and entities)
REs are prohibited from conducting transactions with designated persons and
entities and accordingly, in addition to compliance with Chapter IX of the
Master Direction, REs shall ensure that they do not process cross-border
transactions of designated persons and entities.
iii. REs’ responsibility to fulfil record management requirements
Complete originator and beneficiary information relating to wire transfers shall
be preserved by the REs involved in the wire transfer, in accordance with
paragraph 46 of the Master Direction.

65. Issue and Payment of Demand Drafts, etc.,

Any remittance of funds by way of demand draft, mail/telegraphic transfer/NEFT/IMPS

or any other mode and issue of travelers’ cheques for value of rupees fifty thousand
and above shall be effected by debit to the customer’s account or against cheques
and not against cash payment.

Further, the name of the purchaser shall be incorporated on the face of the demand
draft, pay order, banker’s cheque, etc., by the issuing bank. These instructions shall
take effect for such instruments issued on or after September 15, 2018.

66
66. 152Quoting of PAN

Permanent account number (PAN) or equivalent e-document thereof of customers

shall be obtained and verified while undertaking transactions as per the provisions of
Income Tax Rule 114B applicable to banks, as amended from time to time. Form 60
shall be obtained from persons who do not have PAN or equivalent e-document
thereof.

67. Selling Third party products

REs acting as agents while selling third party products as per regulations in force from
time to time shall comply with the following aspects for the purpose of these directions:

(a) the identity and address of the walk-in customer shall be verified for
transactions above rupees fifty thousand as required under paragraph 13(e) of
this Direction.
(b) 153
transaction details of sale of third-party products and related records shall
be maintained as prescribed in paragraph 46 of Chapter VII.
(c) AML software capable of capturing, generating and analysing alerts for the
purpose of filing CTR/STR in respect of transactions relating to third party
products with customers including walk-in customers shall be available.
(d) transactions involving rupees fifty thousand and above shall be undertaken only
by:
• debit to customers’ account or against cheques; and
• obtaining and verifying the PAN given by the account-based as well as
walk-in customers.
(e) Instruction at ‘d’ above shall also apply to sale of REs’ own products, payment
of dues of credit cards/sale and reloading of prepaid/travel cards and any other
product for rupees fifty thousand and above.

68. At-par cheque facility availed by co-operative banks

(a) The ‘at par’ cheque facility offered by commercial banks to co-operative banks
shall be monitored and such arrangements be reviewed to assess the risks
including credit risk and reputational risk arising therefrom.
(b) The right to verify the records maintained by the customer cooperative banks/
societies for compliance with the extant instructions on KYC and AML under
such arrangements shall be retained by banks.

152
Amended vide circular DOR.AML.BC.No.27/14.01.001/2019-20 dated January 9, 2020.
153
Amended vide circular DOR.AML.REC.44/14.01.001/2023-24 dated October 17, 2023.

67
 (c) Cooperative Banks shall:
i. ensure that the ‘at par’ cheque facility is utilised only:
a. for their own use,
b. for their account-holders who are KYC complaint, provided that all
transactions of rupees fifty thousand or more are strictly by debit to the
customers’ accounts,
c. for walk-in customers against cash for less than rupees fifty thousand per
individual.
ii. maintain the following:
a. records pertaining to issuance of ‘at par’ cheques covering, inter alia,
applicant’s name and account number, beneficiary’s details and date of
issuance of the ‘at par’ cheque,
b. sufficient balances/drawing arrangements with the commercial bank
extending such facility for purpose of honouring such instruments.

iii. ensure that ‘At par’ cheques issued are crossed ‘account payee’
irrespective of the amount involved.

69. Issuance of Prepaid Payment Instruments (PPIs):

PPI issuers shall ensure that the instructions issued by Department of Payment and
Settlement System of Reserve Bank of India through their Master Direction are strictly
adhered to.

70. 154Hiring of Employees and Employee training

(a) Adequate screening mechanism, including Know Your Employee / Staff policy,
as an integral part of their personnel recruitment/hiring process shall be put in
place.
(b) REs shall endeavour to ensure that the staff dealing with / being deployed for
KYC/AML/CFT matters have: high integrity and ethical standards, good
understanding of extant KYC/AML/CFT standards, effective communication
skills and ability to keep up with the changing KYC/AML/CFT landscape,
nationally and internationally. REs shall also strive to develop an environment
which fosters open communication and high integrity amongst the staff.
(c) On-going employee training programme shall be put in place so that the
members of staff are adequately trained in KYC/AML/CFT policy. The focus

154
Amended vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

68
 of the training shall be different for frontline staff, compliance staff and staff
dealing with new customers. The front desk staff shall be specially trained to
handle issues arising from lack of customer education. Proper staffing of the
audit function with persons adequately trained and well-versed in
KYC/AML/CFT policies of the RE, regulation and related issues shall be
ensured.

71. 155Deleted
Chapter XI

Repeal Provisions

72. With the issue of these directions, the instructions / guidelines contained in the
circulars mentioned in the Appendix, issued by the Reserve Bank stand repealed.
73. All approvals / acknowledgements given under the above circulars shall be
deemed as given under these directions.
74. All the repealed circulars are deemed to have been in force prior to the coming into
effect of these directions.

155
Deleted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

69
 Annex I

Digital KYC Process

A. The RE shall develop an application for digital KYC process which shall be made
available at customer touch points for undertaking KYC of their customers and the
KYC process shall be undertaken only through this authenticated application of the
REs.

B. The access of the Application shall be controlled by the REs and it should be
ensured that the same is not used by unauthorized persons. The Application shall be
accessed only through login-id and password or Live OTP or Time OTP controlled
mechanism given by REs to its authorized officials. C. The customer, for the purpose
of KYC, shall visit the location of the authorized official of the RE or vice-versa. The
original OVD shall be in possession of the customer.

D. The RE must ensure that the Live photograph of the customer is taken by the
authorized officer and the same photograph is embedded in the Customer Application
Form (CAF). Further, the system Application of the RE shall put a water-mark in
readable form having CAF number, GPS coordinates, authorized official’s name,
unique employee Code (assigned by REs) and Date (DD:MM:YYYY) and time stamp
(HH:MM:SS) on the captured live photograph of the customer.

E. The Application of the RE shall have the feature that only live photograph of the
customer is captured and no printed or video-graphed photograph of the customer is
captured. The background behind the customer while capturing live photograph should
be of white colour and no other person shall come into the frame while capturing the
live photograph of the customer.

F. Similarly, the live photograph of the original OVD or proof of possession of Aadhaar
where offline verification cannot be carried out (placed horizontally), shall be captured
vertically from above and water-marking in readable form as mentioned above shall
be done. No skew or tilt in the mobile device shall be there while capturing the live
photograph of the original documents.

G. The live photograph of the customer and his original documents shall be captured
in proper light so that they are clearly readable and identifiable.

H. Thereafter, all the entries in the CAF shall be filled as per the documents and
information furnished by the customer. In those documents where Quick Response

70
(QR) code is available, such details can be auto-populated by scanning the QR code
instead of manual filing the details. For example, in case of physical Aadhaar/e-
Aadhaar downloaded from UIDAI where QR code is available, the details like name,
gender, date of birth and address can be auto-populated by scanning the QR available
on Aadhaar/e-Aadhaar.

I. Once the above mentioned process is completed, a One Time Password (OTP)
message containing the text that ‘Please verify the details filled in form before sharing
OTP’ shall be sent to customer’s own mobile number. Upon successful validation of
the OTP, it will be treated as customer signature on CAF. However, if the customer
does not have his/her own mobile number, then mobile number of his/her
family/relatives/known persons may be used for this purpose and be clearly mentioned
in CAF. In any case, the mobile number of authorized officer registered with the RE
shall not be used for customer signature. The RE must check that the mobile number
used in customer signature shall not be the mobile number of the authorized officer.

J. The authorized officer shall provide a declaration about the capturing of the live
photograph of customer and the original document. For this purpose, the authorized
official shall be verified with One Time Password (OTP) which will be sent to his mobile
number registered with the RE. Upon successful OTP validation, it shall be treated as
authorized officer’s signature on the declaration. The live photograph of the authorized
official shall also be captured in this authorized officer’s declaration.

K. Subsequent to all these activities, the Application shall give information about the
completion of the process and submission of activation request to activation officer of
the RE, and also generate the transaction-id/reference-id number of the process. The
authorized officer shall intimate the details regarding transaction-id/reference-id
number to customer for future reference.

L. The authorized officer of the RE shall check and verify that:- (i) information available
in the picture of document is matching with the information entered by authorized
officer in CAF. (ii) live photograph of the customer matches with the photo available in
the document.; and (iii) all of the necessary details in CAF including mandatory field
are filled properly.;

M. On Successful verification, the CAF shall be digitally signed by authorized officer

of the RE who will take a print of CAF, get signatures/thumb-impression of customer

71
at appropriate place, then scan and upload the same in system. Original hard copy
may be returned to the customer.

Banks may use the services of Business Correspondent (BC) for this process.

72
 Annex II

File No. 14014/01/2019/CFT

Government of India
Ministry of Home Affairs
CTCR Division
North Block, New Delhi.
Dated: the 2nd February, 2021
(Amended vide corrigendum dated March 15, 2023)
(Amended vide corrigendum dated August 29, 2023)
(Amended vide corrigendum dated April 22, 2024)

ORDER

Subject: - Procedure for implementation of Section 51A of the Unlawful

Activities (Prevention) Act, 1967.

Section 51A of the Unlawful Activities (Prevention) Act, 1967 (UAPA) reads as under:-

"51A. For the prevention of, and for coping with terrorist activities, the Central
Government shall have power to —

a) freeze, seize or attach funds and other financial assets or economic

resources held by, on behalf of or at the direction of the individuals or entities
listed in the Schedule to the Order, or any other person engaged in or
suspected to be engaged in terrorism;
b) prohibit any individual or entity from making any funds, financial assets or
economic resources or related services available for the benefit of the
individuals or entities listed in the Schedule to the Order or any other person
engaged in or suspected to be engaged in terrorism;
c) prevent the entry into or the transit through India of individuals listed in the
Schedule to the Order or any other person engaged in or suspected to be
engaged in terrorism".

The Unlawful Activities (Prevention) Act, 1967 defines "Order" as under: -

"Order" means the Prevention and Suppression of Terrorism (Implementation

of Security Council Resolutions) Order, 2007, as may be amended from time to time.

2. In order to ensure expeditious and effective implementation of the provisions

of Section 51A, a revised procedure is outlined below in supersession of earlier orders
and guidelines on the subject:

3. Appointment and communication details of the UAPA Nodal Officers:

3.1 The Joint Secretary (CTCR), Ministry of Home Affairs would be the Central
[designated] Nodal Officer for the UAPA [Telephone Number: 011-23093124, 011-
230923465 (Fax), email address: [email protected]].

3.2 The Ministry of External Affairs, Department of Economic Affairs, Ministry of

73
Corporate Affairs, Foreigners Division of MHA, FIU-IND, Central Board of Indirect
Taxes and Customs (CBIC) and Financial Regulators (RBI, SEBI and IRDA) shall
appoint a UAPA Nodal Officer and communicate the name and contact details to the
Central [designated] Nodal Officer for the UAPA.

3.4 All the States and UTs shall appoint a UAPA Nodal Officer preferably of the
rank of the Principal Secretary/Secretary, Home Department and communicate the
name and contact details to the Central [designated] Nodal Officer for the UAPA.

3.5 The Central [designated] Nodal Officer for the UAPA shall maintain the
consolidated list of all UAPA Nodal Officers and forward the list to all other UAPA
Nodal Officers, in July every year or as and when the list is updated and shall cause
the amended list of UAPA Nodal Officers circulated to all the Nodal Officers.

3.6 The Financial Regulators shall forward the consolidated list of UAPA Nodal
Officers to the banks, stock exchanges/depositories, intermediaries regulated by SEBI
and insurance companies.

3.7 The Regulators of the real estate agents, dealers in precious metals & stones
(DPMS) and DNFBPs shall forward the consolidated list of UAPA Nodal Officers to the
real estate agents, dealers in precious metals & stones (DPMS) and DNFBPs.

4. Communication of the list of designated individuals/entities:

4.1 The Ministry of External Affairs shall update the list of individuals and entities
subject to the UN sanction measures whenever changes are made in the lists by the
UNSC 1267 Committee pertaining to Al Qaida and Da’esh and the UNSC 1988
Committee pertaining to Taliban. On such revisions, the Ministry of External Affairs
would electronically forward the changes without delay to the designated Nodal
Officers in the Ministry of Corporate Affairs, CBIC, Financial Regulators, FIU–IND,
CTCR Division and Foreigners Division in MHA.

4.2 The Financial Regulators shall forward the list of designated persons as
mentioned in Para 4(i) above, without delay to the banks, stock exchanges/
depositories, intermediaries regulated by SEBI and insurance companies.

4.3 The Central [designated] Nodal Officer for the UAPA shall forward the
designated list as mentioned in Para 4(i) above, to all the UAPA Nodal Officers of
States/UTs without delay.

4.4 The UAPA Nodal Officer in Foreigners Division of MHA shall forward the
designated list as mentioned in Para 4(i) above, to the immigration authorities and
security agencies without delay.

4.5 The Regulators of the real estate agents, dealers in precious metals & stones
(DPMS) and DNFBPs shall forward the list of designated persons as mentioned in
Para 4(i) above, to the real estate agents, dealers in precious metals & stones (DPMS)
and DNFBPs without delay.

5. Regarding funds, financial assets or economic resources or related

services held in the form of bank accounts, stocks or Insurance policies
etc.

74
5.1 The Financial Regulators will issue necessary guidelines to banks, stock
exchanges/depositories, intermediaries regulated by the SEBI and insurance
companies requiring them -

(i) To maintain updated designated lists in electronic form and run a check on the
given parameters on a daily basis to verify whether individuals or entities listed in the
Schedule to the Order, hereinafter, referred to as designated individuals/entities are
holding any funds, financial assets or economic resources or related services held in
the form of bank accounts, stocks, Insurance policies etc., with them.

(ii) In case, the particulars of any of their customers match with the particulars of
designated individuals/entities, the banks, stock exchanges/depositories,
intermediaries regulated by SEBI, insurance companies shall immediately inform full
particulars of the funds, financial assets or economic resources or related services
held in the form of bank accounts, stocks or Insurance policies etc., held by such
customer on their books to the Central [designated] Nodal Officer for the UAPA, at
Fax No.011-23092551 and also convey over telephone No. 011-23092548. The
particulars apart from being sent by post shall necessarily be conveyed on email id:
[email protected].

(iii) The banks, stock exchanges/depositories, intermediaries regulated by SEBI

and insurance companies shall also send a copy of the communication mentioned in
5.1 (ii) above to the UAPA Nodal Officer of the State/UT where the account is held
and to Regulators and FIU-IND, as the case may be, without delay.

(iv) In case, the match of any of the customers with the particulars of designated
individuals/entities is beyond doubt, the banks, stock exchanges/depositories,
intermediaries regulated by SEBI and insurance companies shall prevent such
designated persons from conducting financial transactions, under intimation to the
Central [designated] Nodal Officer for the UAPA at Fax No.011-23092551 and also
convey over telephone No.011-23092548. The particulars apart from being sent by
post should necessarily be conveyed on e-mail id: [email protected], without delay.

(v) The banks, stock exchanges/depositories, intermediaries regulated by SEBI,

and insurance companies shall file a Suspicious Transaction Report (STR) with FIU-
IND covering all transactions in the accounts, covered under Paragraph 5.1(ii) above,
carried through or attempted as per the prescribed format.

5.2 On receipt of the particulars, as referred to in Paragraph 5 (i) above, the Central
[designated] Nodal Officer for the UAPA would cause a verification to be conducted
by the State Police and/or the Central Agencies so as to ensure that the
individuals/entities identified by the banks, stock exchanges/ depositories,
intermediaries and insurance companies are the ones listed as designated
individuals/entities and the funds, financial assets or economic resources or related
services, reported by banks, stock exchanges/depositories, intermediaries regulated
by SEBI and insurance companies are held by the designated individuals/entities. This
verification would be completed expeditiously from the date of receipt of such
particulars.

5.3 In case, the results of the verification indicate that the properties are
owned by or are held for the benefit of the designated individuals/entities, an orders
to freeze these assets under Section 51A of the UAPA would be issued by the Central

75
[designated] nodal officer for the UAPA without delay and conveyed electronically to
the concerned bank branch, depository and insurance company under intimation to
respective Regulators and FIU-IND. The Central [designated] nodal officer for the
UAPA shall also forward a copy thereof to all the Principal Secretaries/Secretaries,
Home Department of the States/UTs and all UAPA nodal officers in the country, so
that any individual or entity may be prohibited from making any funds, financial assets
or economic resources or related services available for the benefit of the designated
individuals/ entities or any other person engaged in or suspected to be engaged in
terrorism. The Central [designated] Nodal Officer for the UAPA shall also forward a
copy of the order to all Directors General of Police/ Commissioners of Police of all
States/UTs for initiating action under the provisions of the Unlawful Activities
(Prevention) Act, 1967.

The order shall be issued without prior notice to the designated individual/entity.

6. Regarding financial assets or economic resources of the nature of

immovable properties:

6.1 The Central [designated] Nodal Officer for the UAPA shall electronically forward
the designated list to the UAPA Nodal Officers of all States and UTs with request to
have the names of the designated individuals/entities, on the given parameters,
verified from the records of the office of the Registrar performing the work of
registration of immovable properties in their respective jurisdiction, without delay.

6.2 In case, the designated individuals/entities are holding financial assets or

economic resources of the nature of immovable property and if any match with the
designated individuals/entities is found, the UAPA Nodal Officer of the State/UT would
cause communication of the complete particulars of such individual/entity along with
complete details of the financial assets or economic resources of the nature of
immovable property to the Central [designated] Nodal Officer for the UAPA without
delay at Fax No. 011-23092551 and also convey over telephone No. 011-23092548.
The particulars apart from being sent by post would necessarily be conveyed on email
id: [email protected].

6.3 The UAPA Nodal Officer of the State/UT may cause such inquiry to be
conducted by the State Police so as to ensure that the particulars sent by the Registrar
performing the work of registering immovable properties are indeed of these
designated individuals/entities. This verification shall be completed without delay and
shall be conveyed within 24 hours of the verification, if it matches with the particulars
of the designated individual/entity to the Central [designated] Nodal Officer for the
UAPA at the given Fax, telephone numbers and also on the email id.

6.4 The Central [designated] Nodal Officer for the UAPA may also have the
verification conducted by the Central Agencies. This verification would be completed
expeditiously.

6.5 In case, the results of the verification indicates that the particulars match
with those of designated individuals/entities, an order under Section 51A of the UAPA
shall be issued by the Central [designated] Nodal Officer for the UAPA without delay
and conveyed to the concerned Registrar performing the work of registering
immovable properties and to FIU-IND under intimation to the concerned UAPA Nodal
Officer of the State/UT.

76
 The order shall be issued without prior notice to the designated
individual/entity.

6.6 Further, the UAPA Nodal Officer of the State/UT shall cause to monitor the
transactions/ accounts of the designated individual/entity so as to prohibit any
individual or entity from making any funds, financial assets or economic resources or
related services available for the benefit of the individuals or entities listed in the
Schedule to the Order or any other person engaged in or suspected to be engaged in
terrorism. The UAPA Nodal Officer of the State/UT shall, upon becoming aware of any
transactions and attempts by third party immediately bring to the notice of the
DGP/Commissioner of Police of the State/UT for initiating action under the provisions
of the Unlawful Activities (Prevention) Act, 1967.

7. Regarding the real-estate agents, dealers of precious metals/stones

(DPMS) and other Designated Non-Financial Businesses and Professions
(DNFBPs) and any other person:

(i) The Designated Non-Financial Businesses and Professions (DNFBPs), inter

alia, include casinos, real estate agents, dealers in precious metals/stones (DPMS),
lawyers/notaries, accountants, company service providers and societies/ firms and
non-profit organizations. The list of designated entities/individuals should be
circulated to all DNFBPs by the concerned Regulators without delay.

(a) The DNFBPs are required to ensure that if any designated individual/entity
approaches them for a transaction or relationship or attempts to undertake such
transactions, the dealer should not carry out such transactions and, without delay,
inform the UAPA Nodal officer of the State/UT with details of the funds/assets held
and the details of the transaction, who in turn would follow the same procedure as in
para 6.2 to 6.6 above. Further, if the dealers hold any assets or funds of the designated
individual/entity, either directly or indirectly, they shall freeze the same without delay
and inform the UAPA Nodal officer of the State/UT.

(ii) The CBIC shall advise the dealers of precious metals/stones (DPMS) that if
any designated individual/entity approaches them for sale/purchase of precious
metals/stones or attempts to undertake such transactions the dealer should not carry
out such transaction and without delay inform the CBIC, who in turn follow the similar
procedure as laid down in the paragraphs 6.2 to 6.5 above.

(iii) The UAPA Nodal Officer of the State/UT shall advise the Registrar of Societies/
Firms/ non-profit organizations that if any designated individual/ entity is a
shareholder/ member/ partner/ director/ settler/ trustee/ beneficiary/ beneficial owner
of any society/ partnership firm/ trust/ non-profit organization, then the Registrar
should inform the UAPA Nodal Officer of the State/UT without delay, who will, in turn,
follow the procedure as laid down in the paragraphs 6.2 to 6.5 above. The Registrar
should also be advised that no societies/ firms/ non-profit organizations should be
allowed to be registered, if any of the designated individual/ entity is a director/ partner/
office bearer/ trustee/ settler/ beneficiary or beneficial owner of such juridical person
and in case such request is received, then the Registrar shall inform the UAPA Nodal
Officer of the concerned State/UT without delay, who will, in turn, follow the procedure
laid down in the paragraphs 6.2 to 6.5 above.

77
(iv) The UAPA Nodal Officer of the State/UT shall also advise appropriate
department of the State/UT, administering the operations relating to Casinos, to
ensure that the designated individuals/ entities should not be allowed to own or have
beneficial ownership in any Casino operation. Further, if any designated individual/
entity visits or participates in any game in the Casino and/ or if any assets of such
designated individual/ entity is with the Casino operator, and of the particulars of any
client matches with the particulars of designated individuals/ entities, the Casino
owner shall inform the UAPA Nodal Officer of the State/UT without delay, who shall in
turn follow the procedure laid down in paragraph 6.2 to 6.5 above.

(v) The Ministry of Corporate Affairs shall issue an appropriate order to the Institute
of Chartered Accountants of India, Institute of Cost and Works Accountants of India
and Institute of Company Secretaries of India (ICSI) requesting them to sensitize their
respective members to the provisions of Section 51A of UAPA, so that if any
designated individual/entity approaches them, for entering/ investing in the financial
sector and/or immovable property, or they are holding or managing any assets/
resources of Designated individual/ entities, then the member shall convey the
complete details of such designated individual/ entity to UAPA Nodal Officer in the
Ministry of Corporate Affairs who shall in turn follow the similar procedure as laid down
in paragraph 6.2 to 6.5 above.

(vi) The members of these institutes should also be sensitized that if they have
arranged for or have been approached for incorporation/ formation/ registration of any
company, limited liability firm, partnership firm, society, trust, association where any
of designated individual/ entity is a director/ shareholder/ member of a company/
society/ association or partner in a firm or settler/ trustee or beneficiary of a trust or a
beneficial owner of a juridical person, then the member of the institute should not
incorporate/ form/ register such juridical person and should convey the complete
details of such designated individual/ entity to UAPA Nodal Officer in the Ministry of
Corporate Affairs who shall in turn follow the similar procedure as laid down in
paragraph 6.2 to 6.5 above.

(vii) In addition, the member of the ICSI be sensitized that if he/she is Company
Secretary or is holding any managerial position where any of designated individual/
entity is a Director and/or Shareholder or having beneficial ownership of any such
juridical person then the member should convey the complete details of such
designated individual/ entity to UAPA Nodal Officer in the Ministry of Corporate Affairs
who shall in turn follow the similar procedure as laid down in paragraph 6.2 to 6.5
above.

(viii) The Registrar of Companies (ROC) may be advised that in case any
designated individual/ entity is a shareholder/ director/ whole time director in any
company registered with ROC or beneficial owner of such company, then the ROC
should convey the complete details of such designated individual/ entity, as per the
procedure mentioned in paragraph 8 to 10 above. This procedure shall also be
followed in case of any designated individual/ entity being a partner of Limited
Liabilities Partnership Firms registered with ROC or beneficial owner of such firms.
Further the ROC may be advised that no company or limited liability Partnership firm
shall be allowed to be registered if any of the designated individual/ entity is the
Director/ Promoter/ Partner or beneficial owner of such company or firm and in case
such a request received the ROC should inform the UAPA Nodal Officer in the Ministry

78
of Corporate Affairs who in turn shall follow the similar procedure as laid down in
paragraph 6.2 to 6.5 above.

(ix) Any person, either directly or indirectly, holding any funds or other assets of
designated individuals or entities, shall, without delay and without prior notice, cause
to freeze any transaction in relation to such funds or assets, by immediately informing
the nearest Police Station, which shall, in turn, inform the concerned UAPA Nodal
Officer of the State/UT along with the details of the funds/assets held. The concerned
UAPA Nodal Officer of the State/UT, would follow the same procedure as in para 6.2
to 6.6 above.

8. Regarding implementation of requests received from foreign countries

under U.N. Security Council Resolution 1373 of 2001:

8.1 The U.N. Security Council Resolution No.1373 of 2001 obligates countries to
freeze without delay the funds or other assets of persons who commit, or attempt to
commit, terrorist acts or participate in or facilitate the commission of terrorist acts; of
entities owned or controlled directly or indirectly by such persons; and of persons and
entities acting on behalf of, or at the direction of such persons and entities, including
funds or other assets derived or generated from property owned or controlled, directly
or indirectly, by such persons and associated persons and entities. Each individual
country has the authority to designate the persons and entities that should have their
funds or other assets frozen. Additionally, to ensure that effective cooperation is
developed among countries, countries should examine and give effect to, if
appropriate, the actions initiated under the freezing mechanisms of other countries.

8.2 To give effect to the requests of foreign countries under the U.N. Security
Council Resolution 1373, the Ministry of External Affairs shall examine the requests
made by the foreign countries and forward it electronically, with their comments, to the
Central [designated] Nodal Officer for the UAPA for freezing of funds or other assets.

8.3 The Central [designated] Nodal Officer for the UAPA shall cause the request to
be examined without delay, so as to satisfy itself that on the basis of applicable legal
principles, the requested designation is supported by reasonable grounds, or a
reasonable basis, to suspect or believe that the proposed designee is a terrorist, one
who finances terrorism or a terrorist organization, and upon his satisfaction, request
would be electronically forwarded to the Nodal Officers in Regulators, FIU-IND and to
the Nodal Officers of the States/UTs. The proposed designee, as mentioned above
would be treated as designated individuals/entities.

9. Upon receipt of the requests by these Nodal Officers from the Central
[designated] Nodal Officer for the UAPA, the similar procedure as enumerated at
paragraphs 5 and 6 above shall be followed.

The freezing orders shall be issued without prior notice to the designated
persons involved.

10. Regarding exemption, to be granted to the above orders in accordance

with UNSCR 1452.

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10.1 The above provisions shall not apply to funds and
other financial assets or economic resources that have been determined by the
Central [designated] nodal officer of the UAPA to be:-

(a) necessary for basic expenses, including payments for foodstuff, rent or
mortgage, medicines and medical treatment, taxes, insurance premiums and public
utility charges, or exclusively for payment of reasonable professional fees and
reimbursement of incurred expenses associated with the provision of legal services or
fees or service charges for routine holding or maintenance of frozen funds or other
financial assets or economic resources, after notification by the MEA of the intention
to authorize, where appropriate, access to such funds, assets or resources and in the
absence of a negative decision within 48 hours of such notification;

(b) necessary for extraordinary expenses, provided that such determination

has been notified by the MEA;

10.2. The addition may be allowed to accounts of the designated individuals/ entities
subject to the provisions of paragraph 10 of:

(a) interest or other earnings due on those accounts, or

(b) payments due under contracts, agreements or obligations that arose prior
to the date on which those accounts became subject to the provisions of resolutions
1267 (1999), 1333 (2000), or 1390 (2002),

Provided that any such interest, other earnings and payments continue to be
subject to those provisions;

10.3 (a): The designated individual or organization may submit a request to the Central
[Designated] Nodal Officer for UAPA under the provisions of Para 10.1 above. The
Central [Designated] Nodal Officer for UAPA may be approached by post at
“Additional Secretary (CTCR), North Block, New Delhi – 110001” or through email to
[email protected]”

(b): The Central [Designated] Nodal Officer for UAPA shall examine such requests, in
consultation with the Law Enforcement Agencies and other Security Agencies and
Intelligence Agencies and, if accepted, communicate the same, if applicable, to the
Ministry of External Affairs, Government of India for notifying the committee
established pursuant to UNSC Resolution 1267 (1999) of the intention to authorize,
access to such funds, assets or resources in terms of Para 10.1 above.

11. Regarding procedure for unfreezing of funds, financial assets or

economic resources or related services of individuals/entities inadvertently
affected by the freezing mechanism upon verification that the person or entity
is not a designated person:

11.1 Any individual or entity, if it has evidence to prove that the freezing of
funds, financial assets or economic resources or related services, owned/held by them
has been inadvertently frozen, they shall move an application giving the requisite
evidence, in writing, to the concerned bank, stock exchanges/ depositories,
intermediaries regulated by SEBI, insurance companies, Registrar of Immovable
Properties, ROC, Regulators of DNFBPs and the UAPA Nodal Officers of State/UT.

80
11.2 The banks, stock exchanges/depositories, intermediaries regulated by
SEBI, insurance companies, Registrar of Immovable Properties, ROC, Regulators of
DNFBPs and the State/ UT Nodal Officers shall inform and forward a copy of the
application together with full details of the asset frozen given by any individual or entity
informing of the funds, financial assets or economic resources or related services have
been frozen inadvertently, to the Central [designated] Nodal Officer for the UAPA as
per the contact details given in Paragraph 3.1 above, within two working days.

11.3 The Central [designated] Nodal Officer for the UAPA shall cause such
verification, as may be required on the basis of the evidence furnished by the
individual/entity, and, if satisfied, he/she shall pass an order, without delay, unfreezing
the funds, financial assets or economic resources or related services, owned/held by
such applicant, under intimation to the concerned bank, stock
exchanges/depositories, intermediaries regulated by SEBI, insurance company,
Registrar of Immovable Properties, ROC, Regulators of DNFBPs and the UAPA Nodal
Officer of State/UT. However, if it is not possible for any reason to pass an Order
unfreezing the assets within 5 working days, the Central [designated] Nodal Officer
for the UAPA shall inform the applicant expeditiously.

11A. Regarding procedure for unfreezing of funds, financial assets or economic

resources or related services of individuals/organisations in the event of
delisting by the UNSCR 1267 (1999), 1988 (2011) and 1989 (2011) Committee

Upon making an application in writing by the concerned individual/organisation, to the

concerned bank, stock exchanges/depositories, intermediaries regulated by SEBI,
insurance companies, Registrar of Immovable Properties, RoC, Regulators of
DNFBPs, Department of Posts and the UAPA Nodal Officers of all States/UTs., who
in turn shall forward the application along with the full details of the assets frozen to
the Central [Designated] Nodal Officer for UAPA within two working days. The Central
[Designated] Nodal Officer for UAPA shall examine the request in consultation with
the Law Enforcement Agencies and other Security Agencies and Intelligence
Agencies and cause such verification as may be required and if satisfied, shall pass
an order, without delay, unfreezing the funds, financial assets or economic resources
or related services owned or held by the applicant under intimation to concerned bank,
stock exchanges/ depositories, intermediaries regulated by SEBI, insurance
companies, Registrar of Immovable Properties, RoC, Regulators of DNFBPs,
Department of Posts and the UAPA Nodal Officers of all States/UTs.

12. Regarding prevention of entry into or transit through India:

12.1 As regards prevention of entry into or transit through India of the designated
individuals, the UAPA Nodal Officer in the Foreigners Division of MHA, shall forward
the designated lists to the immigration authorities and security agencies with a request
to prevent the entry into or the transit through India. The order shall take place without
prior notice to the designated individuals/entities.

12.2 The immigration authorities shall ensure strict compliance of the order and also
communicate the details of entry or transit through India of the designated individuals
as prevented by them to the UAPA Nodal Officer in Foreigners Division of MHA.

13. Procedure for communication of compliance of action taken under

Section 51A: The Central [designated] Nodal Officer for the UAPA and the Nodal

81
Officer in the Foreigners Division, MHA shall furnish the details of funds, financial
assets or economic resources or related services of designated individuals/entities
frozen by an order, and details of the individuals whose entry into India or transit
through India was prevented, respectively, to the Ministry of External Affairs for
onward communication to the United Nations.

14. Communication of the Order issued under Section 51A of Unlawful

Activities (Prevention) Act, 1967: The order issued under Section 51A of the
Unlawful Activities (Prevention) Act, 1967 by the Central [designated] Nodal Officer
for the UAPA relating to funds, financial assets or economic resources or related
services, shall be communicated to all the UAPA nodal officers in the country, the
Regulators of Financial Services, FIU-IND and DNFBPs, banks, depositories/stock
exchanges, intermediaries regulated by SEBI, Registrars performing the work of
registering immovable properties through the UAPA Nodal Officer of the State/UT.

15. All concerned are requested to ensure strict compliance of this order.

(Ashutosh Agnihotri)
Joint Secretary to the Government of India
To,

1) Governor, Reserve Bank of India, Mumbai

2) Chairman, Securities & Exchange Board of India, Mumbai
3) Chairman, Insurance Regulatory and Development Authority, Hyderabad.
4) Foreign Secretary, Ministry of External Affairs, New Delhi.
5) Finance Secretary, Ministry of Finance, New Delhi.
6) Revenue Secretary, Department of Revenue, Ministry of Finance, New Delhi.
7) Secretary, Ministry of Corporate Affairs, New Delhi
8) Chairman, Central Board of Indirect Taxes & Customs, New Delhi.
9) Director, Intelligence Bureau, New Delhi.
10) Additional Secretary, Department of Financial Services, Ministry of Finance,
New Delhi.
11) Chief Secretaries of all States/Union Territories
12) Principal Secretary (Home)/Secretary (Home) of all States/ Union Territories
13)Directors General of Police of all States & Union Territories
14)Director General of Police, National Investigation Agency, New Delhi.
15)Commissioner of Police, Delhi.
16)Joint Secretary (Foreigners), Ministry of Home Affairs, New Delhi.
17) Joint Secretary (Capital Markets), Department of Economic Affairs, Ministry of
Finance, New Delhi.
18) Joint Secretary (Revenue), Department of Revenue, Ministry of Finance,
New Delhi.
19)Director (FIU-IND), New Delhi.

Copy for information to: -

1. Sr. PPS to HS
2. PS to SS (IS)

82
 156
Annex III
F.No.P - 12011/14/2022-ES Cell-DOR
Government of India
Ministry of Finance
Department of Revenue
***
New Delhi, dated the 1st September, 2023

ORDER

Subject: - Procedure for implementation of Section 12A of “The Weapons of

Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities)
Act, 2005”.

Section 12A of The Weapons of Mass Destruction and their Delivery Systems
(Prohibition of Unlawful Activities) Act, 2005 [hereinafter referred to as ‘the Act’] reads
as under: -

"12A. (1) No person shall finance any activity which is prohibited under this
Act, or under the United Nations (Security Council) Act, 1947 or any other relevant Act
for the time being in force, or by an order issued under any such Act, in relation to
weapons of mass destruction and their delivery systems.

(2) For prevention of financing by any person of any activity which is prohibited
under this Act, or under the United Nations (Security Council) Act, 1947 or any other
relevant Act for the time being in force, or by an order issued under any such Act, in
relation to weapons of mass destruction and their delivery systems, the Central
Government shall have power to—

a) freeze, seize or attach funds or other financial assets or economic

resources—

i. owned or controlled, wholly or jointly, directly or indirectly, by such

person; or

ii. held by or on behalf of, or at the direction of, such person; or

iii. derived or generated from the funds or other assets owned or controlled,
directly or indirectly, by such person;

prohibit any person from making funds, financial assets or economic

resources or related services available for the benefit of persons related to any activity
which is prohibited under this Act, or under the United Nations (Security Council) Act,
1947 or any other relevant Act for the time being in force, or by an order issued under

156
Inserted vide circular DOR.AML.REC.111/14.01.001/2023-24 dated April 28, 2023.

83
any such Act, in relation to weapons of mass destruction and their delivery systems.

(3) The Central Government may exercise its powers under this section through any
authority who has been assigned the power under sub-section (1) of section 7.”

II In order to ensure expeditious and effective implementation of the provisions of

Section 12A of the Act, the procedure is outlined below.

1. Appointment and communication details of Section 12A Nodal Officers:

1.1 In exercise of the powers conferred under Section 7(1) of the Act, the Central
Government assigns Director, FIU-India, Department of Revenue, Ministry of
Finance, as the authority to exercise powers under Section 12A of the Act. The
Director, FIU-India shall be hereby referred to as the Central Nodal Officer (CNO) for
the purpose of this order. [Telephone Number: 011- 23314458, 011- 23314435, 011-
23314459 (FAX), email address: [email protected]].

1.2 Regulator under this order shall have the same meaning as defined in Rule 2(fa)
of Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. Reporting
Entity (RE) shall have the same meaning as defined in Section 2 (1) (wa) of Prevention
of Money-Laundering Act, 2002. DNFPBs is as defined in section 2(1) (sa) of
Prevention of Money-Laundering Act, 2002.

1.3 The Regulators, Ministry of Corporate Affairs and Foreigners Division of MHA shall
notify a Nodal Officer for implementation of provisions of Section 12A of the Act. The
Regulator may notify the Nodal Officer appointed for implementation of provisions of
Section 51A of UAPA, also, as the Nodal Officer for implementation of Section 12A of
the Act. All the States and UTs shall notify a State Nodal officer for implementation of
Section 12A of the Act. A State/UT may notify the State Nodal Officer appointed for
implementation of provisions of Section 51A of UAPA, also, as the Nodal Officer for
implementation of Section 12A of the Act.

1.4 The CNO shall maintain an updated list of all Nodal Officers, and share the updated
list with all Nodal Officers periodically. The CNO shall forward the updated list of all
Nodal Officers to all REs.

2. Communication of the lists of designated individuals/entities:

2.1 The Ministry of External Affairs will electronically communicate, without delay, the
changes made in the list of designated individuals and entities (hereinafter referred to
as ‘designated list’) in line with section 12A (1) to the CNO and Nodal officers.

2.1.1 Further, the CNO shall maintain the Designated list on the portal of FIU-India.
The list would be updated by the CNO, as and when it is updated, as per para 2.1
above, without delay. It shall make available for all Nodal officers, the State Nodal
Officers, and to the Registrars performing the work of registration of immovable
properties, either directly or through State Nodal Officers, without delay.

2.1.2 The Ministry of External Affairs may also share other information relating to
prohibition / prevention of financing of prohibited activity under Section 12A (after its
initial assessment of the relevant factors in the case) with the CNO and other

84
organizations concerned, for initiating verification and suitable action.

2.1.3 The Regulators shall make available the updated designated list, without delay,
to their REs. The REs will maintain the designated list and update it, without delay,
whenever changes are made as per para 2.1 above.

2.2 The Nodal Officer for Section 12A in Foreigners Division of MHA shall forward the
updated designated list to the immigration authorities and security agencies, without
delay.

3. Regarding funds, financial assets or economic resources or related services

held in the form of bank accounts, stocks or insurance policies, etc.

3.1 All Financial Institutions shall –

i. Verify if the particulars of the entities/individual, party to the financial

transactions, match with the particulars of designated list and in case of match,
REs shall not carry out such transaction and shall immediately inform the
transaction details with full particulars of the funds, financial assets or economic
resources involved to the CNO by email, FAX and by post, without delay.

ii. Run a check, on the given parameters, at the time of establishing a relation with
a customer and on a periodic basis to verify whether individuals and entities in
the designated list are holding any funds, financial assets or economic
resources or related services, in the form of bank accounts, stocks, Insurance
policies etc. In case, the particulars of any of their customers match with the
particulars of designated list, REs shall immediately inform full particulars of the
funds, financial assets or economic resources or related services held in the
form of bank accounts, stocks or insurance policies etc., held on their books to
the CNO by email, FAX and by post, without delay.

iii. The REs shall also send a copy of the communication, mentioned in 3.1 (i) and
(ii) above, to State Nodal Officer, where the account/transaction is held, and to
their Regulator, as the case may be, without delay.

iv. In case there are reasons to believe beyond doubt that funds or assets held by
a customer would fall under the purview of clause (a) or (b) of sub-section (2) of
Section 12A, REs shall prevent such individual/entity from conducting financial
transactions, under intimation to the CNO by email, FAX and by post , without
delay.

3.2 On receipt of the particulars, as referred to in Paragraph 3.1 above, the CNO would
cause a verification to be conducted by the State Police and/or the Central Agencies
so as to ensure that the individuals/entities identified by the REs are the ones in
designated list and the funds, financial assets or economic resources or related
services, reported by REs are in respect of the designated individuals/entities. This
verification would be completed expeditiously from the date of receipt of such
particulars.

3.3 In case, the results of the verification indicate that the assets are owned by, or are
held for the benefit of, the designated individuals/entities, an order to freeze these

85
assets under Section 12A would be issued by the CNO without delay and be conveyed
electronically to the concerned RE under intimation to respective Regulators. The CNO
shall also forward a copy thereof to all the Principal Secretaries/Secretaries, Home
Department of the States/UTs and All Nodal officers in the country, so that any
individual or entity may be prohibited from making any funds, financial assets or
economic resources or related services available for the benefit of the designated
individuals / entities. The CNO shall also forward a copy of the order to all Directors
General of Police/ Commissioners of Police of all States/UTs for initiating suitable
action.

3.4 The order shall be issued without prior notice to the designated individual/entity.

4. Regarding financial assets or economic resources of the nature of immovable

properties:

4.1 The Registrars performing work of registration of immovable properties shall --

i. Verify if the particulars of the entities/individual, party to the transactions, match

with the particulars of the designated list, and, in case of match, shall not carry
out such transaction and immediately inform the details with full particulars of
the assets or economic resources involved to the State Nodal Officer, without
delay.

ii. Verify from the records in their respective jurisdiction, without delay, on given
parameters, if the details match with the details of the individuals and entities in
the designated list. In case, the designated individuals/entities are holding
financial assets or economic resources of the nature of immovable property,
and if any match with the designated individuals/entities is found, the Registrar
shall immediately inform the details with full particulars of the assets or
economic resources involved to the State Nodal Officer, without delay.

iii. In case there are reasons to believe beyond doubt that assets that are held by
an individual/entity would fall under the purview of clause (a) or (b) of sub-
section (2) of Section 12A, Registrar shall prevent such individual/entity from
conducting transactions, under intimation to the State Nodal Officer by email,
FAX and by post , without delay.

4.2 the State Nodal Officer would cause communication of the complete particulars of
such individual/entity along with complete details of the financial assets or economic
resources to the CNO without delay by email, FAX and by post.

4.3 The State Nodal Officer may cause such inquiry to be conducted by the State
Police so as to ensure that the particulars sent are indeed of these designated
individuals/entities. This verification shall be completed without delay and shall be
conveyed, within 24 hours of the verification, if it matches, with the particulars of the
designated individual/entity, to the CNO without delay by email, FAX and by post.

4.4 The CNO may also have the verification conducted by the Central Agencies. This
verification would be completed expeditiously.

4.5 In case, the results of the verification indicate that the assets are owned by, or are

86
held for the benefit of, the designated individuals/entities, an order to freeze these
assets under Section 12A would be issued by the CNO without delay and be conveyed
electronically to the concerned Registrar performing the work of registering immovable
properties, and to FIU under intimation to the concerned State Nodal Officer. The CNO
shall also forward a copy thereof to all the Principal Secretaries/Secretaries, Home
Department of the States/UTs and All Nodal officers in the country, so that any
individual or entity may be prohibited from making any funds, financial assets or
economic resources or related services available for the benefit of the designated
individuals / entities. The CNO shall also forward a copy of the order to all Directors
General of Police/ Commissioners of Police of all States/UTs for initiating suitable
action.

4.6 The order shall be issued without prior notice to the designated individual/entity.

5. Regarding the real-estate agents, dealers of precious metals/stones

(DPMS), Registrar of Societies/ Firms/ non-profit organizations, The Ministry
of Corporate Affairs and Designated Non-Financial Businesses and
Professions (DNFBPs):

(i) The dealers of precious metals/stones (DPMS) as notified under PML (Maintenance
of Records) Rules, 2005 and Real Estate Agents, as notified under clause (vi) of
Section 2(1) (sa) of Prevention of Money-Laundering Act, 2002, are required to ensure
that if any designated individual/entity approaches them for sale/purchase of precious
metals/stones/Real Estate Assets or attempts to undertake such transactions, the
dealer should not carry out such transaction and, without delay, inform the Section 12A
Nodal officer in the Central Board of Indirect Taxes and Customs (CBIC). Also, If the
dealers hold any assets or funds of the designated individual/entity, they shall freeze
the same without delay and inform the Section 12A Nodal officer in the CBIC, who will,
in turn, follow procedure similar to as laid down for State Nodal Officer in the
paragraphs 4.2 to 4.6.

(ii) Registrar of Societies/ Firms/ non-profit organizations are required to ensure that if
any designated individual/ entity is a shareholder/ member/ partner/ director/ settler/
trustee/ beneficiary/ beneficial owner of any society/ partnership firm/ trust/ non-profit
organization, then the Registrar shall freeze any transaction for such designated
individual/ entity and shall inform the State Nodal Officer, without delay, and, if such
society/ partnership firm/ trust/ non-profit organization holds funds or assets of
designated individual/ entity, follow the procedure as laid down for State Nodal Officer
in the paragraphs 4.2 to 4.6 above. The Registrar should also ensure that no societies/
firms/ non-profit organizations should be allowed to be registered if any of the
designated individual/ entity is a director/ partner/ office bearer/ trustee/ settler/
beneficiary or beneficial owner of such juridical person and, in case, such request is
received, then the Registrar shall inform the State Nodal Officer, without delay.

(iii) The State Nodal Officer shall also advise appropriate department of the State/UT,
administering the operations relating to Casinos, to ensure that the designated
individuals/ entities should not be allowed to own or have beneficial ownership in any
Casino operation. Further, if any designated individual/ entity visits or participates in
any game in the Casino or if any assets of such designated individual/ entity are with
the Casino operator, or if the particulars of any client match with the particulars of
designated individuals/ entities, the Casino owner shall inform the State Nodal Officer,
without delay, and shall freeze any such transaction.

87
(iv) The Ministry of Corporate Affairs shall issue an appropriate order to the Institute of
Chartered Accountants of India, Institute of Cost and Works Accountants of India and
Institute of Company Secretaries of India (ICSI), requesting them to sensitize their
respective members to the provisions of Section 12A, so that, if any designated
individual/entity approaches them, for entering/ investing in the financial sector and/or
immovable property, or they are holding or managing any assets/ resources of
designated individual/ entities, then the member shall convey the complete details of
such designated individual/ entity to Section 12A Nodal Officer in the Ministry of
Corporate Affairs, who shall in turn follow the similar procedure as laid down for State
Nodal Officer in paragraph 4.2 to 4.6 above.

(v) The members of these institutes should also be sensitized by the Institute of
Chartered Accountants of India, Institute of Cost and Work Accountants of India and
Institute of Company Secretaries of India (ICSI) that if they have arranged for or have
been approached for incorporation/ formation/ registration of any company, limited
liability firm, partnership firm, society, trust, association where any designated
individual/ entity is a director/ shareholder/ member of a company/ society/ association
or partner in a firm or settler/ trustee or beneficiary of a trust or a beneficial owner of a
juridical person, then the member of the institute should not incorporate/ form/ register
such juridical person and should convey the complete details of such designated
individual/ entity to Section 12A Nodal Officer in the Ministry of Corporate Affairs.

(vi) In addition, a member of the ICSI shall, if he/she is Company Secretary or is holding
any managerial position where any of designated individual/ entity is a Director and/or
Shareholder or having beneficial ownership of any such juridical person, convey the
complete details of such designated individual/ entity to Section 12A Nodal Officer in
the Ministry of Corporate Affairs, who shall follow the similar procedure as laid down in
paragraph 4.2 to 4.6 above for State Nodal Officer, if such company, limited liability
firm, partnership firm, society, trust, or association holds funds or assets of the
designated individual/entity.

(vii) In case any designated individual/ entity is a shareholder/ director/ whole time
director in any company registered with the Registrar of Companies (ROC) or
beneficial owner of such company or partner in a Limited Liabilities Partnership Firm
registered with ROC or beneficial owner of such firm, the ROC should convey the
complete details of such designated individual/ entity to section 12A Nodal officer of
Ministry of Corporate Affairs. If such company or LLP holds funds or assets of the
designated individual/ entity, he shall follow the similar procedure as laid down in
paragraph 4.2 to 4.6 above for State Nodal Officer. Further the ROCs are required to
ensure that no company or limited liability Partnership firm shall be allowed to be
registered if any of the designated individual/ entity is the Director/ Promoter/ Partner
or beneficial owner of such company or firm, and in case such a request is received,
the ROC should inform the Section 12A Nodal Officer in the Ministry of Corporate
Affairs.

(viii) All communications to Nodal officer as enunciated in subclauses (i) to (vii) above
should, inter alia, include the details of funds and assets held and the details of
transaction.

(ix) The Other DNBPs are required to ensure that if any designated individual/entity
approaches them for a transaction or relationship or attempts to undertake such
transactions, the dealer should not carry out such transaction and, without delay,

88
inform the Section 12A Central Nodal officer. The communication to the Central Nodal
Officer would include the details of funds and assets held and the details of the
transaction. Also, If the dealers hold any assets or funds of the designated
individual/entity, they shall freeze the same without delay and inform the Section 12A
Central Nodal officer.

(DNFBPs shall have the same meaning as the definition in Section 2(1) (sa) of
Prevention of Money-Laundering Act,2002.)

5.1. All Natural and legal persons holding any funds or other assets of designated
persons and entities, shall, without delay and without prior notice, freeze any
transaction in relation to such funds or assets and shall immediately inform the State
Nodal officer along with details of the funds/assets held, who in turn would follow the
same procedure as in para 4.2 to 4.6 above for State Nodal Officer. This obligation
should extend to all funds or other assets that are owned or controlled by the
designated person or entity, and not just those that can be tied to a particular act, plot
or threat of proliferation; those funds or other assets that are wholly or jointly owned or
controlled, directly or indirectly, by designated persons or entities; and the funds or
other assets derived or generated from funds or other assets owned or controlled
directly or indirectly by designated persons or entities, as well as funds or other assets
of persons and entities acting on behalf of, or at the direction of designated persons or
entities.

5.2 No person shall finance any activity related to the 'designated list' referred to in
Para 2.1, except in cases where exemption has been granted as per Para 6 of this
Order.

5.3. Further, the State Nodal Officer shall cause to monitor the transactions / accounts
of the designated individual/entity so as to prohibit any individual or entity from making
any funds, financial assets or economic resources or related services available for the
benefit of the individuals or entities in the designated list. The State Nodal Officer shall,
upon becoming aware of any transactions and attempts by third party, without delay,
bring the incidence to the notice of the CNO and the DGP/Commissioner of Police of
the State/UT for initiating suitable action.

5.4 Where the CNO has reasons to believe that any funds or assets are violative of
Section 12A (1) or Section 12A (2)(b) of the Act, he shall, by order, freeze such funds
or Assets, without any delay, and make such order available to authorities, Financial
Institutions, DNFBPs and other entities concerned.

5.5 The CNO shall also have the power to issue advisories and guidance to all persons,
including Fls and DNFBPs obligated to carry out sanctions screening. The concerned
Regulators shall take suitable action under their relevant laws, rules or regulations for
each violation of sanction screening obligations under section 12A of the WMD Act.

6. Regarding exemption, to be granted to the above orders

6.1. The above provisions shall not apply to funds and other financial assets or
economic resources that have been determined by the CNO to be: -

(a) necessary for basic expenses, including payments for foodstuff, rent or mortgage,

89
medicines and medical treatment, taxes, insurance premiums and public utility
charges, or exclusively for payment of reasonable professional fees and
reimbursement of incurred expenses associated with the provision of legal services or
fees or service charges for routine holding or maintenance of frozen funds or other
financial assets or economic resources, consequent to notification by the MEA
authorizing access to such funds, assets or resources.

This shall be consequent to notification by the MEA to the UNSC or its Committee, of
the intention to authorize access to such funds, assets or resources, and in the
absence of a negative decision by the UNSC or its Committee within 5 working days
of such notification.

(b) necessary for extraordinary expenses, provided that such determination has been
notified by the MEA to the UNSC or its Committee, and has been approved by the
UNSC or its Committee;

6.2. The accounts of the designated individuals/ entities may be allowed to be credited
with:

(a) interest or other earnings due on those accounts, or

(b) payments due under contracts, agreements or obligations that arose prior to the
date on which those accounts became subject to the provisions of section 12A of the
Act.

Provided that any such interest, other earnings and payments continue to be subject
to those provisions under para 3.3;

6.3 Any freezing action taken related to the designated list under this Order should not
prevent a designated individual or entity from making any payment due under a
contract entered into prior to the listing of such individual or entity, provided
that:
(i) the CNO has determined that the contract is not related to any of the prohibited
goods, services, technologies, or activities, under this Act, or under the United Nations
(Security Council) Act, 1947 or any other relevant Act for the time being in force, or by
an order issued under any such Act, in relation to weapons of mass destruction and
their delivery systems;
(ii) the CNO has determined that the payment is not directly or indirectly received by
an individual or entity in the designated list under this Order; and

(iii) the MEA has submitted prior notification to the UNSC or its Committee, of the
intention to make or receive such payments or to authorise, where appropriate, he
unfreezing of funds, other financial assets or economic resources for this purpose, ten
working days prior to such authorization

7. Regarding procedure for unfreezing of funds, financial assets or economic

resources or related services of individuals/entities inadvertently affected by the
freezing mechanism upon verification that the individual or entity is not a
designated person or no longer meet the criteria for designation:

7.1 Any individual/entity, if it has evidence to prove that the freezing of funds, financial
assets or economic resources or related services, owned/held has been inadvertently

90
frozen, an application may be moved giving the requisite evidence, in writing, to the
relevant RE/Registrar of Immovable Properties/ ROC/Regulators and the State.

7.2 The RE/Registrar of Immovable Properties/ROC/Regulator and the State Nodal

Officer shall inform, and forward a copy of the application, together with full details of
the asset frozen, as given by applicant to the CNO by email, FAX and by Post, within
two working days. Also, listed persons and entities may petition a request for delisting
at the Focal Point Mechanism established under UNSC Resolution.

7.3 The CNO shall cause such verification, as may be required on the basis of the
evidence furnished by the individual/entity, and, if satisfied, it shall pass an order,
without delay, unfreezing the funds, financial assets or economic resources or related
services, owned/held by such applicant, under intimation to all RE/Registrar of
Immovable Properties/ROC/Regulators and the State Nodal Officer. However, if it is
not possible, for any reason, to pass an Order unfreezing the assets within 5 working
days, the CNO shall inform the applicant expeditiously.

7.4 The CNO shall, based on de-listing of individual and entity under UN Security
Council Resolutions, shall pass an order, if not required to be designated in any other
order, without delay, unfreezing the funds, financial assets or economic resources or
related services, owned/held by such applicant, under intimation to all RE/Registrar of
Immovable Properties/ROC/Regulators and the State Nodal Officer.

8. Procedure for communication of compliance of action taken under Section

12A: The CNO and the Nodal Officer in the Foreigners Division, MHA shall furnish the
details of funds, financial assets or economic resources or related services of
designated individuals/entities, frozen by an order, and details of the individuals whose
entry into India or transit through India was prevented, respectively, to the Ministry of
External Affairs, for onward communication to the United Nations.

9. Communication of the Order issued under Section 12A: The Order issued under
Section 12A of the Act by the CNO relating to funds, financial assets or economic
resources or related services, shall be communicated to all nodal officers in the
country.

10. This order is issued in suppression of F.No.P-12011/14/2022-ES Cell-DOR, dated

30th January 2023.

11. All concerned are requested to ensure strict compliance of this order.

(Manoj Kumar Singh)

Director (HQ)

To,
1)Governor, Reserve Bank of India, Mumbai
2)Chairman, Securities & Exchange Board of India, Mumbai
3)Chairman, Insurance Regulatory and Development Authority, Hyderabad.
4)Foreign Secretary, Ministry of External Affairs, New Delhi.
5)Finance Secretary, Ministry of Finance, New Delhi.

91
6)Revenue Secretary, Department of Revenue, Ministry of Finance, New Delhi.
7)Secretary, Ministry of Corporate Affairs, New Delhi
8)Chairman, Central Board of Indirect Taxes & Customs, New Delhi.
9)Director, Intelligence Bureau, New Delhi.
10)Additional Secretary, Department of Financial Services, Ministry of Finance, New
Delhi.
11)Chief Secretaries of all States/Union Territories
12)Principal Secretary (Home)/Secretary (Home) of all States/ Union Territories
13)Directors General of Police of all States & Union Territories
14)Director General of Police, National Investigation Agency, New Delhi.
15)Commissioner of Police, Delhi.
16)Joint Secretary (Foreigners), Ministry of Home Affairs, New Delhi.
17)Joint Secretary (Capital Markets), Department of Economic Affairs, Ministry of
Finance, New Delhi.
18)Joint Secretary (Revenue), Department of Revenue, Ministry of Finance, New
Delhi.
19)Director (FIU-IND), New Delhi.

Copy for information to: -

1. Sr. PPS to HS
2. PS to SS (IS)

92
 Annex IV

KYC documents for eligible FPIs under PIS

FPI Type
Document Type Category I Category II Category III
Constitutive Mandatory Mandatory Mandatory
Documents
(Memorandu
m and Articles
of
Association,
Certificate of
Incorporation
etc.)
Proof of Mandatory Mandatory Mandatory
Address (Power of (Power of other than
Attorney {PoA} Attorney Power of
mentioning the mentioning the Attorney
Entity Level address is address is
acceptable as acceptable as
address proof) address proof)
PAN 157 Mandatory Mandatory Mandatory
Financial Exempted * Exempted * Mandatory
Data
SEBI Mandatory Mandatory Mandatory
Registration
Certificate
Board Exempted * Mandatory Mandatory
Resolution
@@
List Mandatory Mandatory Mandatory
Proof of Exempted * Exempted * Entity
Senior Identity declares* on
Manageme letter head
nt full name,
(Whole nationality,
Time date of birth
Directors/ or submits
Partners/ photo identity
Trustees/ proof
etc.) Proof of Exempted * Exempted * Declaration
Address on Letter
Head *

157
Amended vide amendment dated April 20, 2018. Deleted Portion of read as: ‘Card’.

93
 Photographs Exempted Exempted Exempted *

List and Mandatory – list Mandatory - list Mandatory

Signatures of Global of Global
Custodian Custodian
signatories can signatories can
be given in case be given in case
of PoA to Global of PoA to Global
Authorized Custodian Custodian
Signatories Proof of Exempted * Exempted * Mandatory
Identity
Proof of Exempted * Exempted * Declaration
Address on Letter
Head *
Photographs Exempted Exempted Exempted *
List Exempted * Mandatory Mandatory

Proof of Exempted * Exempted * Mandatory

Ultimate
Beneficial Identity
Owner Proof of Exempted * Exempted * Declaration
(UBO) Address on Letter
Head *
Photographs Exempted Exempted Exempted *

* Not required while opening the bank account. However, FPIs concerned may submit
an undertaking that upon demand by Regulators/Law Enforcement Agencies the
relative document/s would be submitted to the bank.
@@ FPIs from certain jurisdictions where the practice of passing Board Resolution for
the purpose of opening bank accounts etc. is not in vogue, may submit ‘Power of
Attorney granted to Global Custodian/Local Custodian in lieu of Board Resolution’

94
Category Eligible Foreign Investors
I. Government and Government related foreign investors such
as Foreign Central Banks, Governmental Agencies,
Sovereign Wealth Funds, International/ Multilateral
Organizations/ Agencies.
II. a) Appropriately regulated broad based funds such as
Mutual Funds, Investment Trusts, Insurance
/Reinsurance Companies, Other Broad Based Funds
etc.
b) Appropriately regulated entities such as Banks, Asset
Management Companies, Investment Managers/
Advisors, Portfolio Managers etc.
c) Broad based funds whose investment manager is
appropriately regulated.
d) University Funds and Pension Funds.
e) University related Endowments already registered with
SEBI as FII/Sub Account.
III. All other eligible foreign investors investing in India under
PIS route not eligible under Category I and II such as
Endowments, Charitable Societies/Trust, Foundations,
Corporate Bodies, Trusts, Individuals, Family Offices, etc.

95
 Appendix
List of Circulars or part thereof repealed with the issuance of Master Direction

Sr. Circular No. Date

No.
1. DBOD.BP.BC.92/C.469-76 August 12, 1976

2. DBOD.GC.BC.62/c.408(A)/87 November 11, 1987

3. DBOD.BP.BC.114/C.469 (81)-91 April 19, 1991

4. DBOD.FMC.No.153/27.01.003/93-94 September 1, 1993

5. DBOD.GC.BC.193/17.04.001/93 November 18, 1993

6. DBOD.GC.BC.202/17.04.001/93 December 6, 1993

7. DBOD.No.GC.BC.46/17.04.001 April 22, 1994

8. DBOD.BP.BC.106/21.01.001/94 September 23,1994

9. DBOD.BP.BC.102/21.01.001/95 September 20, 1995

10. DBOD.BP.BC.42/21.01.001/96 April 6, 1996

11. DBOD.No.BP.BC.12/21.01.023/98 February 11, 1998

12. DBOD.BP.52/21.01.001/2001-02 December 5, 2001

13. DBOD.AML.BC.89/14.01.001/2001-02 April 15, 2002

14. DBOD.AML.BC.No.102/14.01.001/2001-02 May 10, 2002

15. DBOD.AML.BC.18/14.01.001/2002-03 August 16, 2002

16. DBOD.NO.AML.BC.58/14.01.001/2004-05 November 29, 2004

17. DBOD.NO.AML.BC.28 /14.01.001/2005-06 August 23, 2005

18. DBOD.NO.AML.BC.63/14.01.001/2005-06 February 15, 2006

19. DBOD.AML.BC. No.77/14.01.001/2006-07 April 13, 2007

20. DBOD.AML.BC.No. 63/14.01.001/2007-08 February 18, 2008

21. DBOD.AML.BC.No. 85/14.01.001/2007-08 May 22, 2008

22. DBOD.AML.BC.No.12/14.01.001/2008-09 July 1, 2008

23. DBOD.AML.BC.No.2/14.01.001/2009-10 July 1, 2009

96
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25. DBOD.AML.BC.No.44/14.01.001/2009-10 September 17, 2009

26. DBOD.AML.BC.No.68/14.01.001/2009-10 January 12, 2010

27. DBOD.AML.BC.No.80/14.01.001/2009-10 March 26, 2010

28. DBOD.AML.BC.No.95/14.01.001/2009-10 April 23, 2010

29. DBOD.AML.BC.No.108/14.01.001/2009-10 June 9, 2010

30. DBOD.AML.BC.No.109/14.01.001/2009-10 June 10, 2010

31. DBOD.AML.BC.No.111/14.01.001/2009-10 June 15, 2010

32. DBOD.AML.BC.No.113/14.01.001/2009-10 June 29, 2010

33. DBOD.AML.BC.No.38/14.01.001/2010-11 August 31, 2010

34. DBOD.AML.BC.No.50/14.01.001/2010-11 October 26, 2010

35. DBOD.AML.BC.No.65/14.01.001/2010-11 December 7, 2010

36. DBOD.AML.BC.No.70/14.01.001/2010-11 December 30, 2010

37. DBOD.AML.BC.No.77/14.01.001/2010-11 January 27, 2011

38. DBOD.AML.BC. No.36/14.01.001/2011-12 September 28, 2011

39. DBOD.AML BC.No.47/14.01.001/2011-12 November 4, 2011

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42. DBOD. AML.BC. No 93/14.01.001/2011-12 April 17, 2012

43. DBOD. AML.BC. No 109/14.01.001/2011-12 June 8, 2012

44. DBOD. AML.BC. No 110/14.01.001/2011-12 June 8, 2012

45. DBOD.AML.BC. No. 39/14.01.001/2012-13 September 7, 2012

46. DBOD.AML.BC. No. 49/14.01.001/2012-13 September 7, 2012

47. DBOD.AML.BC. No. 65/14.01.001/2012-13 December 10, 2012

48. DBOD.AML.BC. No.71/14.01.001/2012-13 January 18, 2013

49. DBOD.AML.BC. No. 78/14.01.001/2012-13 January 29, 2013

50. DBOD.AML.BC. No.87/14.01.001/2012-13 March 28, 2013

97
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52. DBOD.AML.BC. No.29/14.01.001/2013-14 July 12, 2013

53. DBOD.AML.BC. No. 34/14.01.001/2013-14 July 23, 2013

54. DBOD.AML.BC.No.44/14.01.001/2013-14 September 2, 2013

55. DBOD.AML.BC.No.45/14.01.001/2013-14 September 2, 2013

56. DBOD. AML.BC. No. 50/14.01.001/2013-14 September 3, 2013

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60. DBOD. AML. No. 16415/14.01.001/2013-14 March 28, 2014

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62. DBOD.AML.BC. No. 119/14.01.001/2013-14 June 9, 2014

63. DBOD. AML.BC. No.124/14.01.001/2013-14 June 26, 2014

64. DBOD.AML.BC.No.26/14.01.001/2014-15 July 17, 2014

65. DBOD.AML.BC.No. 39/14.01.001/2014-15 September 4, 2014

66. DBOD. AML. BC. No. 44/14.01.001/2014-15 October 21, 2014

67. DBR.AML.BC.No.77/14.01.001/2014-15 March 13, 2015

68. DBR. AML. BC. No.104/14.01.001/ 2014-15 June 11, 2015

69. DBR.AML.BC.No.36/14.01.001/2015-16 August 28, 2015

70. DBR. AML.BC. No. 46/14.01.001/2015-16 October 29, 2015

71. DBR.AML.BC.No.60/14.01.001/2015-16 November 26, 2015

72. DBOD.NO.BC.23/21.01.001/92 September 9, 1992

73. DBOD.BP.BC No. 56/21.01.001/2005-06 January 23, 2006

74. DBOD.BP.BC.No. 50/21.01.001/2011-12 November 4, 2011

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77. UBD.BPD.(PCB)Cir.No.69/14.01.062/2013-14 June 10, 2014

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86. UBD.BPD.(PCB).Cir.No.2/14.01.062/2013-14 July 31, 2013

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88. UBD.BPD(PCB)Cir.No.46/14.01.062/2012-13 April 03, 2013

89. UBD.BPD(PCB)Cir.No.39/14.01.062/2012-13 March 07, 2013

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 List of Circulars Repealed Partially, with the issuance of Master Direction

Sr. Circular No. Date

No.
1. DBOD.BP.BC.57/21.01.001/95 – Paragraph 2(b) May 4, 1995

2. DBS.FGV.BC.56.23.04.001/98-99 June 21, 1999

Paragraph “(b) Concept of "Know Your Customer"
(para. 9.2)”

List of Circulars, or part thereof, repealed after the issuance of Master Direction

Sr. No. Circular No. Date

1. DBR.AML.BC.No.16/14.08.001/2015-16 July 1, 2015

106