RBI/2004-05/29 UBD.BPD. PCB. Cir. 02 /09.161.00/2004-05
July 9, 2004
The Chief Executive Officers of
all Primary (Urban) Co-operative Banks
Dear Sir,
'Know Your Customer'
Guidelines-Compliance
Please refer to our circular UBD
No. DS.PCB. Cir 17/13.01.00/2002-03 dated September 18, 2002 on 'Know Your Customer
Guidelines' to be followed by urban cooperative banks. You were advised vide
paragraph 3 of the above circular that in case of any omission in respect of
the existing accounts, KYC procedure may be completed at the earliest. Further,
vide our circular UBD
No. DS.PCB. Cir 41/09.161.00/2003-04 dated March 26, 2004 on ' Know Your
Customer Guidelines', urban cooperative banks were advised to complete the KYC
procedure in regard to existing accounts as per the time schedule prescribed
therein.
2. In this connection, please
refer to paragraph
126 of the annual policy statement for the year 2004-05 relating to 'KYC
and Privacy of Customer Relationship' , advising the banks that :
- Banks may fully adhere to the KYC policy adopted
by their Boards for opening new accounts; they may limit its application to
the existing accounts in such cases where the summation of the credit/debit
transactions is more than Rs.10 lakh or where the banks suspect any unusual
transactions.
- Banks may conduct KYC in all accounts belonging
to trusts, intermediaries or where the accounts are operated through a mandate
or power of attorney. The KYC procedure may be applied diligently to suit
local conditions and should be completed by December 2004
3. We presume that you have already
formulated a KYC policy in consultation with your Board, which should be adhered
to for opening all new accounts. However, with a view to ensuring that existing
small account holders are not inconvenienced and the KYC procedure is completed
in time, it has been decided that banks may limit the application of KYC procedures
to existing accounts where the credit or debit summation for the financial year
ended March 31, 2003 is more than Rs.10 lakh or where unusual transactions are
suspected. This process may be completed by December 31, 2004.
4. Urban Cooperative Banks,
may however, ensure that KYC procedures are applied to all existing accounts
of trusts, companies / firms, religious / charitable organizations and other
institutions or where the accounts are opened through a mandate or power of
attorney. The KYC procedures may be applied diligently to suit local conditions
and completed by December 31, 2004.
Yours faithfully,
(N.S.Vishwanathan)
Chief General Manager
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