RBI urges banks to follow KYC norms, warns action against violators

Mumbai, Apr 12 (UNI) Indian banks must scrupulously adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) measures as stipulated by the Reserve Bank of India (RBI) said RBI General Manager Lalit Srivastava here today.

He said, ''This will go a long way in preventing scams in the Indian financial sector.'' Addressing a seminar on KYC and AML norms organised by the Indian Banks' Association (IBA), Srivastava warned stern action against offenders.

He added, ''RBI will not only penalise offenders but also deny regulatory approvals to such violators if the situation so demnads'' adding, ''RBI guidelines on the subject of outsourcing will soon be relaesed and that the responsibility of total compliance with KYC norms rest withthe banks.'' Mr Srivastava emphasised the importance of training bank officers at every level to counter money-laundering, while simultaneously highlighting the pressing need to ''clearly demarcate duties of officers, especially at the stage of opening accounts.'' He said that KYC and AML measures were aimed at making things difficult for criminals to misuse the financial sector.

''There is a constant need to be alert and improve and innovate strategies to prevent scams,'' he said, adding ''a strong documentation procedure for opening all customer accounts will go a long way in helping achieve this objective.'' The RBI official called for a careful monitoring of all medium and high-risk accounts as well as enhanced due diligence in respect of accounts with beneficial ownership, non face-to-face transactions, group companies and wire transfers.

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