QUICK SUCCESS SERIES, an initiative of SBLC Quick ... Deoghar Mobile- 9801002594 Email-...

Quick

Success

Series

KYC & AML

GUIDELINES

Updated By: J .K Arun Manager (Training),

SBLC Deoghar

Mobile- 9801002594

Email- [email protected]

Updated up to 15.01.2018

QUICK SUCCESS SERIES, an initiative of SBLC

Deoghar to facilitate the preparation of promo-

tion seeking personnel of our Bank, appears to

have succeeded in its objective to a large ex-

tent, as the readers are still approaching us for

its revision/updation despite availability of

plenty of other study materials.

We would not have been able to sustain this

unique effort of ours, without the active support

and continuous encouragement of our DGM

cum Circle Development officer Sri Bijayananda

Padhi. We are deeply indebted to him for his co-

operation and guidance.

Kumar Priyank, Chief Manager (Training),

Sanjay Kumar Sharma, Manager (Training) and

Jitendra Kumar Arun, Manager (Training) at this

SBLC have owned up this project and have tak-

en pains to keep it relevant to the users by up-

dating & improving it at half yearly interval.

Though every care has been taken while updat-

ing the contents, we request our readers to

point out any lapses at the earliest. Needless to

mention this book is not a substitute of circular

instructions issued by the Bank from time to

time. For detailed guidelines please refer to

Bank’s latest circulars. Soft copy of this edition

is available on our ftp://10.151.51.33 in QSS

folder and on SBI TIMES>PATNA CIRCLE>SBLC

Deoghar site.

Team SBLC Deoghar is humbled by the response

and recognition, it is receiving from the readers

within and beyond the circle. We wish the

readers grand success in their endeavours.

Kumar Umeshwar Singh Assistant General Manager,

State Bank Learning Centre,

Deoghar- 814112

Phone- 06432-232895

Fax - 06432-231810

E-mail: [email protected]

KYC & AML GUIDELINES


2

• Our Bank has been observing 1st

August every year as "KYC com-

pliance and Fraud Prevention Day"

in order to create awareness about

KYC compliance and fraud preven-

tion, among the staff.

• It has been decided to observe 1st September every year as “Risk

Awareness Day / Jokhim Jagrukta

Diwas” in the Bank.

• It has been decided to observe 2nd

November, every year as “AML-CFT

Day” in the Bank.

� OFFICIALLY VALID DOCUMENT

(OVD)

(e Cir. SL 47/2017-18 dated 23.10.2017)

OVDs consist only the following five

OVDs :

i. Passport

ii) Driving licence,

iii. Voter's Identity Card issued by

Election Commission of India,

iv. Job card issued by NREGA duly

signed by an officer of the State Gov-

ernment,

v. Letter issued by the National Popu-

lation Register containing details of

name, address, or any other docu-

ment as notified by the Central Gov-

ernment in consultation with the

Regulator

Aadhaar & Permanent Account Num-

ber (PAN) are no longer in the list of

Officially Valid Documents (OVDs)

but these two documents have been

made mandatory for the Account

Opening of resident individual who is

eligible for Aadhaar under Aadhaar

Act 2016.

In pursuance of clause (a) and clause

(c) of sub rule (17) of rule 9 of the

Prevention of Money laundering

(Maintenance of Records) Rules,

2005, the Central Government hereby

notifies the 31st March, 2018 or six

months from the date of com-

mencement of account based rela-

tionship by the client, whichever is

later, as the date of submission of the Aadhaar Number, and Permanent Ac-

count Number or Form 60 by the

clients to the reporting entity.

DEEMED OVD : (e cir Sl.No.: 1003/2017 – 18 dated 23.11.17)

Central Govt. has given some relaxa-

tion in case of officially valid docu-

ment furnished by the customer also

does not contain updated address,

the following documents shall be

deemed to be officially valid doc-

uments for the limited purpose of

proof of address:

i) Utility bill which is not more than

two months old of any service pro-

vider (electricity, telephone, postpaid

mobile phone, piped gas, water bill);

(ii) Property or Municipal tax receipt;

(iii) Pension or family pension pay-

ment orders (PPOs) issued to retired

employees by Government

Departments or Public Sector Under-

takings, if they contain the address.



3

(iv) letter of allotment of accommo-

dation from employer issued by State

Government or Central Government

Departments, statutory or regulatory

bodies, public sector undertakings,

scheduled commercial banks, finan-

cial institutions and listed companies

and leave and license agreements

with such employers allotting official

accommodation; Provided that the

customer shall submit updated offi-

cially valid document with current

address within a period of three

months of submitting the above

deemed “officially valid docu-

ments”

KYC REQUIREMENT FOR ACCOUNT

OPENING OF AN INDIVIDUAL : (e Cir.847/2017-18 dated 23.10.2017)

SCENARIO DOCUMENTS

Aadhaar &

PAN available

Aadhaar & PAN

Aadhaar available

Pan not available

Aadhaar + Form

60 & one OVD

PAN available

Aadhaar not

available

Aadhaar enrol-

ment proof + PAN

Aadhaar Not

available &

PAN not available

Aadhaar enrol-

ment proof +

Form 60 & one

OVD

In case the identity information relat-

ing to the Aadhaar number or PAN

submitted by the customer does not

have current address of the custom-

er, he/she shall submit an OVD show-

ing the current address to the Bank.

INDIVIDUAL WHO IS NOT ELIGIBLE

FOR AADHAR

SCENARIO DOCUMENTS

PAN available

Aadhaar not

available

PAN & One OVD

Aadhaar Not

available & PAN

not available

Form 60 & one

OVD

In case the customer is not a resident

or is a resident in the States of Jam-

mu and Kashmir, Assam or Magha-

laya.

SCENARIO DOCUMENTS

PAN available

Aadhaar not

available

PAN + One OVD

Aadhaar Not

available & PAN

not available

Form 60 & one

OVD

In terms of Government of India, Min-

istry of Finance, Department of Fi-

nancial Services Letter No. F.

No.20/2/2010FI/ (Vol. II) (C58530)

dated 2nd August, 2017, it is clarified

that in case the customer is not a res-

ident (as defined in clause (v) of sec-

tion 2 of the Aadhaar (Targetted De-

livery of Financial and Other Subsi-

dies, Benefits and Services) Act, 2016,

i.e. he is not an individual who has

resided in India for period/ periods

amounting in all to 182 days or more

in the 12 months immediately pre-

ceding the date of application for

aadhaar enrolment), or is a resident

in the States of Jammu & Kashmir,

Assam or Meghalaya, he may be al-



4

lowed to open such an account with-

out submission of Aadhaar number.

ONE TIME PIN (OTP) BASED e KYC

process for Aadhaar verification (e cir.sl906/2017-18 dated 03.11.17)

Bank has been advised to provide an

option for One Time Pin (OTP) based

eKYC process verifica-

tion/authentication of Aadhaar for

onboarding of customers.

Accounts opened in terms of this

provision i.e., using OTP based eKYC,

Are subject to the following condi-

tions:

i. There must be a specific consent

from the customer for authentication

through OTP

ii. the aggregate balance of all the de-

posit accounts of the customer shall

not exceed rupees one lakh.

iii. the aggregate of all credits in a fi-

nancial year, in all the deposit taken together, shall not exceed rupees two

lakh.

iv. As regards borrowal accounts, on-

ly term loans shall be sanctioned. The

aggregate amount of term loans sanc-

tioned shall not exceed rupees sixty

thousand in a year.

v. Accounts, both deposit and bor-

rowal, opened using OTP based eKYC

shall not be allowed for more than

one year within which Customer Due

Diligence (CDD) procedure, i.e. Bio-

metric based eKYC authentication, is

to be completed..

vi. If the CDD procedure is not com-

pleted within a year, in respect of de-

posit accounts, the same shall be

closed immediately. In respect of

borrowal accounts, no further debits

shall be allowed.

vii. 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 either with the same Bank or

with any other Bank. Further, while

uploading KYC information to CKYCR,

Bank is required to clearly indicate

that such accounts are opened using

OTP based eKYC so that other Banks

shall not open accounts based on the

KYC information of accounts opened

with OTP based eKYC procedure.

viii. Bank shall have strict monitoring

procedures including systems to gen-

erate alerts in case of any noncom-

pliance/ violation, to ensure com-

pliance with the abovementioned conditions.

PERIODIC UPDATION THROUGH e

KYC (process using OTP based au-

thentication)

eKYC process using OTP based au-

thentication, for the purpose of peri-

odic updation is allowed, provided,

while onboarding, the customer was

subjected to KYC process as per Cus-

tomer Due Diligence Measures (Proof

of Identity & Proof of address ob-



5

tained from the prescribed set of

documents) or Aadhaar authenti-

cated through eKYC process using

Biometric authentication.

RBI GUIDELINES ON CENTRAL

KNOW YOUR CUSTOMER REGI-

STRY (CKYCR) (e cir SL 314/2017-18 dated 28.06.17)

As per CKYCR guidelines , the data

(Customer Information, Photograph,

Signature, KYC Documents) in re-

spect of all account based relation-

ships established by the Bank are re-

quired to be uploaded on CKYCR por-

tal within T+2 days of such estab-

lishment of relationship. Account

based relationship includes all types

of loan accounts, non fund based ac-

counts like Bank Guarantee, Letter of

Credit etc. and all type of deposits ac-

counts.

CIS in respect of both individual and

non-individuals needs to be supe-

rimposed on the Loan/BG/LC appli-

cation form in case of existing as well

as from prospective borrowers for all

types of loan accounts (including

non-fund based accounts), as per re-

vised CKYCR template.

KYC/AML REVISED POLICY AND

PROCEDURAL GUIDELINES ( e-cir. Sl.no: 1472/15-16 dt:02/03/16)

• Reserve Bank of India has specified Know Your Customer (KYC) stan-

dards to be followed by banks and

measures to be taken in regard to

Anti Money Laundering (AML) and

Combating of Financing of Terror-

ism (CFT).

• Obligations cast on banks under

the Prevention of Money Launder-

ing Act (PMLA), 2002

• Recommendations made by the

Financial Action Task Force

(FATF) on AML standards and CFT

• Paper issued on Customer Due Di-

ligence (CDD) for banks by the Ba-

sel Committee on Banking Supervi-

sion

• The Policy / procedural guidelines,

as incorporated in the Master Cir-

cular, are applicable to all domestic

branches/offices of the Bank U/S

Section 3 of the Prevention of

Money Laundering Act, 2002

(PMLA) has defined the “offence of

money laundering”

• Non compliance with

KYC/AML/CFT standards can lead

to use of the technology channels

of the Bank for Money Launder-

ing/financing terrorism activities

and thus expose the Bank to risks such as Operational Risk, Reputa-

tion Risk, Compliance Risk and Le-

gal Risk etc.

OBLIGATIONS UNDER PREVEN-

TION OF MONEY LAUNDERING

ACT, 2002

Section 12 of PMLA places the follow-

ing obligations on the Bank :-

(i) maintaining a record of prescribed

transactions.

(ii) furnishing information of pre-

scribed transactions to the specified

authority.



6

(iii) verifying and maintaining

records of the identity of its clients

(in other words complying with the

KYC requirements) and identifying

the beneficial owners, if any, of such

clients.

(iv) preserving records in respect of

(i) and (ii) above for a period of five

years from the date of transactions,

and in respect of (iii) above for a pe-

riod of five years after the cessation

of relationship with the clients in re-

spect of account opening forms and

KYC documents.

• The KYC/AML/CFT Policy of the

Bank has the following key ele-

ments:

� Customer Acceptance Policy

� Customer Identification Proce-

dures

� Monitoring of Transactions and

� Risk Management

• Bank’s Customer Acceptance Policy

(CAP) lays down the criteria for

acceptance of customers.

• Customer identification requires

identifying the customer and veri-

fying his/her identity by using reli-

able, independent source docu-

ments, data or information.

• Thus, the first requirement of Cus-

tomer Identification Procedures

(CIP) to be satisfied is that a pros-

pective customer is actually who

he/she claims to be. The second

requirement of CIP is to ensure

that sufficient information is ob-

tained on the identity and the pur-

pose of the intended nature of the

banking relationship.

• This would enable risk profiling of

the customer and also to determine

the expected or predictable pattern

of transactions.

• Identification data, as under, would

be required to be obtained in re-

spect of different classes of cus-

tomers:

Risk Categorisation: The revised

list of classification of custom-

ers/groups of customers, under

different category of risk, (e Cir. sl 1472/2015-16 dt:02/03/2016)

Accounts pertaining to Central/State

Governments, PSUs and JVs with

Govt., Regulators, FIs, Statutory Bod-

ies, salaried persons/pensioners of

these organizations, “Small Accounts”

and any product(s) that are specifi-

cally mandated to be opened under

“Low Risk”, are to be assigned, ab-

initio (from the beginning), Low Risk.

Low Risk:-

1. Salaried Employees (whose salary

is well defined)

2. Customer belonging to lower eco-nomic strata, accounts opened under

financial inclusion

3. NGOs/NPOs promoted by UN or its

agencies.

4. Government owned Companies/

Departments and (State/Central),

PSUs, JVs with Govt., Regulators, FIs,

Statutory bodies etc.



7

5. All customers not classified either

as High/Medium Risk Categories

6. Individual Account holder with Credit/debit summations below ₹50

lacs per annum

7. Non Individual account holders

with credit debit summations below ₹2 crores per annum.

Medium Risk :-

1. New customers (CIFs) opened un-

der Low Risk while onboarding, dur-

ing first 180 days of opening the ac-

count, except those pertaining to

Central/State Governments, PSUs

and JVs with Govt., Regulators, FIs,

Statutory Bodies, salaried per-

sons/pensioners of these organiza-

tions, “Small Accounts” and any

product(s) that are specifically man-

dated to be opened under Low Risk.

2. Non-Bank Financial Institution

3. Stock Brokers

4. Import/Export customers

5. Telemarketers

6. Pawn Shops

7. Auctioneers

8. Venture Capital Companies

9. All In-operative accounts

10. Individual Account holder with Credit/debit summations of ₹50.00

lacs to below ₹2.00 Crores per annum

11. Non Individual account holders

with credit debit summations of ₹2.00 crores to below ₹10.00 Crores

per annum

High Risk:- 1. Politically Exposed person of for-

eign origin

2. Bullion Dealers/jewellers

3. Non Resident Customers (NRIs)

4. Trust Charities, NGOs & Organisa-

tions receiving donations from India

& abroad

5. Non Face-to-Face Customers

6. Customers domiciled in/having

transactions with High Risk Coun-

tries

7. Firms with Sleeping partners

8. Companies having close family

shareholding

9. Multi-Level Marketing Companies

10. Accounts of Mules

11. Customers of dubious reputation

12. High Net worth Individuals - Indi-

viduals with total deposits of Rs.1.50

Crores or more

13. Pooled Accounts

14. Individual/entities involved in

any fraud/forgery/anti national ac-

tivity / terrorism /

tax evasion/insider trading may be

classified as High Risk

15. Account opened/operated by

Power of Attorney Holders

16. Individual Account holder with

Credit/debit summations of Rs.2.00

crores & more per annum 17. Non Individual account holders

with credit debit summations of

Rs.10.00 crores & more per annum

18. Customer accounts where STR

has already been filed with FIU.

Action required on re-

categorisation Accounts with “low

risk” & where simplified proce-



8

dure is followed, into Medium or

High Risk

If a ‘low risk’ category customer for

whom simplified procedure is ap-

plied, is recategorised as ‘moderate

or ‘’high’ risk category at the time of

review of the risk categorisation,

then Branches/offices should obtain

one of the five OVDs for proof of iden-

tity and proof of address immediate-

ly. In the event such a customer fails

to submit such an OVD, Branches

should initiate action for termination

of the business relationship after giv-

ing due notice

REPORTING

In terms of rules of Prevention of

Money Laundering Act 2002, banks

are obliged to file following reports

to Financial Intelligence Unit-India

(FIU-IND) i. Cash Transactions Reports (CTRs)

ii. Counterfeit Currency Reports (CCRs)

iii. Suspicious Transactions Reports (STRs)

iv. Non Profit Organisations Transactions

Report (NTRs)

v. Cross Border Wire Transaction Reports

�� In terms of Rule 8 of PML Rules,

while furnishing information to the

Director, FIU IND, delay of each day

in not reporting a transaction or de-

lay of each day in rectifying a misre-

presented transaction beyond the

time limit specified in the Rule shall

constitute a separate violation and

hence all reporting should be done

as per the timelines prescribed As

per provisions of PML Act.

� Any deficiency in filing the manda-

tory reports by reporting entities

will attract minimum penalty of

Rs.10,000/- which may go to

Rs.100000/- per instance per day.

ONLINE REPORTTING OF CCR (e Cir. 597/2016-17 dated 05.08.2016)

Under the provisions of the PML Act

2002 to report all instances of detec-

tion and seizure of counterfeit Cur-

rency Notes through CCRs to the FIU-

IND through AML / CFT Department

of the Bank.

The Branch’s authorized officials can

access the functionality through URL

address:

https://ccr.statebanktimes.in for key-

ing in the details of “Counterfeit Cur-

rency Notes” detected at the

Branches. The information so given

shall be available to the BOD, Corpo-

rate Centre, Mumbai for its compila-

tion and final submission to the FIU-

IND through CCRs.

The system of consolidated reporting

of Counterfeit Currency Notes to the

ABD, Belapur, Mumbai through FSLO

for it’s final reporting to RBI will be

continued as hitherto. Extant instruc-

tions regarding filing of FIR in all eli-

gible cases shall remain unchanged.



9

TRANSACTION THRESHOLDS FOR

FILTERING TRANSACTIONS FOR

GENERATION OF ALERTS

� Bank has decided to fix following

thresholds, subject to review from

time to time, for filtering transactions

and generating STR alerts.

Low Risk - Rs.50.00 lacs

Medium Risk - Rs.30.00 lacs

High Risk - Rs.10.00 lacs

Monitoring of transactions for the

purpose of generating Suspicious

Transaction Reports (STR) is being done with the help of AMLOCK soft-

ware,

� Subjective STRs: Subjective STRs are

those which are escalated, based on

alerts or information received from

Branches / staff / media reports /

law enforcement agencies etc.

� e mail ID for reporting STR

[email protected]

Bank has set up AML/CFT Cell (ear-

lier knows as KYC AML CELL), at Jai-

pur. It will be analyzing the alerts on

transactions handled across the Bank

with the help of AMLOCK software

acquired from M/s 3i-Infotech for

eventual generation of Suspicious

Transactions Reports (STRs), it is re-

quired, to be submitted to the Finan-

cial Intelligence Unit India (FIU-IND)

by the Principal Officer (KYC/AML).

Presently PRM Cell is analysing

alerts, based on ATM / POS / e-Com

transactions, generated on various

business rules built in the Proactive

Risk Manager software.

� Counterfeit Currency Reports

(CCRs): All instances of counterfeit

currency and forgery of valuable se-

curity and documents are to be sub-

mitted to FIU-IND through the Prin-

cipal Officer.

� SUSPICIUS TRANSACTIONS : SCRU-

TINY OF UNUSUAL TRANSACTIONS :

Particular of Transac-

tions

Scrutiny By

Cash Trans-

actions upto Rs.50,000/=

Transfer

tractions upto

Rs.1,00,000/=

Senior Asstt. For

transactions handled by him

Cash trans-

actions upto

Rs.1,00,000/

=

Transfer

transaction

upto

Rs.4,00,000/

=

Senior Special

Assistant for

transactions

handled by him.

Cash trans-

actions upto

Rs.2,00,000/

=

Transfer

transactions

upto

Rs.5,00,000/

=

Manager of Divi-

sion/Ser. Man-

ager /B.M for all

such transac-

tions not scruti-

nized by any of

the above.

“In terms of Section 2(v) of FEMA

1999, definition of a person resident

in India does not include a person

who has come to or stays in India for

any purpose which would indicate

his stay for a definite period. Accor-

dingly, foreign students coming to

India would be considered as “non-

resident” and a resident account

cannot be opened for them.” (e.cir.sl.no1176/2013 – 14 dt:28/01/2014))



10

OPENING/OPERATING ACCOUNT

OF FOREIGN STUDENT (e Cir.

316/2017-18 dt28.06.17)

Following risk mitigation measures

must be put in place while open-

ing/operating accounts of foreign

students:

(I) Correct feeding of customer's oc-

cupation and Nationality Code in CBS

at the time of account opening for ac-

curate MIS and scrutiny.

(ii) Obtain local address proof of the student within a period of 30 days of

opening the account, verify them and

incorporate the data in CBS invaria-

bly.

(iii) Branch operating functionaries

should recheck customer's occupa-

tion and Nationality Code of existing

foreign students and update their

above data in CBS. (iv) Partial freezing of a/c operation

in case expiry of visa.

(v) Regular monitoring of the trans-

actions of foreign students at various

levels on the basis of threshold limit

fixed by the branch and nature of In-

land Remittance.

(vi) Extra Due Diligence (EDD)

should be exercised by the branch if

inland remittances in form of cash

deposit or transfer from nonhome lo-

cations on frequent intervals are ob-

served. Branches should report with-

out fail any suspicious transactions to

AML/CFT Department, Jaipur in

terms of eCircular no. CFO/AMLCFT/26/15-16

dated 11/01/2016

� TRUST/NOMINEE OR FIDUCIARY

ACCOUNTS

While opening a Trust account,

branches should take reasonable

precautions to verify the identity of

the trustees and the settlers of trust

(including any person settling assets

into the trust), guarantors, protec-

tors, beneficiaries and signatories. In

the case of a 'foundation', steps

should be taken to verify the founder

managers/directors and the benefi-

ciaries.

ACCOUNTS OF COMPANIES

The certified copies of the following

documents:

(i) Certificate of incorporation;

(ii) Memorandum and Articles of As-

sociation;

(iii) A resolution from the Board of

Directors and power of attorney

granted to its managers, officers or

employees to transact on its behalf;

(iv) PAN of the Company; and

(v) (a) Aadhaar number and (b) PAN

or Form 60 as defined in the Income-

tax Rules, 1962, issued to managers,

officers or employees holding an at-torney to transact on the company’s

behalf or where an Aadhaar number

has not been assigned, proof of appli-

cation towards enrolment for Aad-

haar and in case Permanent Account Number is not submitted an officially

valid document shall be submitted.

Provided that for the purpose of this

clause if the managers, officers or

employees holding an attorney to

transact on the company's behalf are

not eligible to be enrolled for Aad-

haar number and do not submit the



11

Permanent Account Number, certi-

fied copy of an officially valid docu-

ment shall be submitted.

Also Ensure that proper OVDs (ap-

plicable for company) are available in

records. Wherever possible, OVDs

have been verified from a Govt. con-

trolled e-platform for

its genuineness.

ii) PAN of Companies have been ob-

tained, verified and kept on record.

iii) Verify incorporation credentials

of Company from website

www.mca.gov.in.

iv) Record in CBS / AOFs the detail of

BOs & extent of their ownership, if

already not done.

PARTNERSHIP FIRM


documents:—

(i) registration certificate;

(ii) partnership deed; and

(iii) PAN of the Partnership Firm;

(iv) (a) Aadhaar number; and (b)

Permanent Account Number or Form

60 as defined in the Incometax Rules,

1962, issued to the person holding an

attorney to transact on its behalf or

where an Aadhaar number has not

been assigned, proof of application

towards enrolment for Aadhaar and

in case Permanent Account Number

is not submitted an officially valid

document shall be submitted.


clause, if the person holding an attor-

ney to transact on the company's be-

half is not eligible to be enrolled for

Aadhaar number and does not submit

the PAN, certified copy of an officially


TRUST


documents:

(i) registration certificate;

(ii) trust deed;

(iii) PAN of the Trust; and

(iv) (a) Aadhaar number; and (b)



1962, issued to the person holding an

attorney to transact on its behalf or

where Aadhaar number has not been

assigned, proof of application to-

wards enrolment for Aadhaar and in

case Permanent Account Number is

not submitted an officially valid doc-

ument shall be submitted:


clause if the person holding an attor-

ney to transact on the company's be-


Aadhaar

number and does not submit the

Permanent Account Number, certi-fied copy of an officially valid docu-

ment shall be submitted.

Unincorporated association or a

body of individuals


documents:

(i) resolution of the managing body

of such association or body of indi-

viduals;



12

(ii) power of attorney granted to him

to transact on its behalf;

(iii) (a) the Aadhaar number; and (b)



1962, issued to the person holding,

an attorney to transact on its behalf

or where Aadhaar number has not

been assigned, proof of application

towards enrolment for Aadhaar and

in case the PAN is not submitted an

officially valid document shall be

submitted; and

(iv) such information as may be re-

quired by the Bank to collectively es-

tablish the legal existence of such an

association or body of individuals:


clause if the person holding an attor-

ney to transact on the company’s be-


Aadhaar number and does not submit

the PAN, certified copy of an officially


� SELF HELP GROUPS: In order to

address the difficulties faced by Self

Help Groups (SHGs) in complying

with KYC norms while opening sav-ings bank accounts and credit linking

of their accounts, it has been decided

by RBI to simplify certain norms for

SHGs. Accordingly, KYC verification

of all the members of SHG need not be done while opening the savings

bank account of the SHG; KYC veri-

fication of all the office bearers

would suffice. As regards KYC verifi-

cation at the time of credit linking of

SHGs, ( since KYC would have already

been verified while opening the sav-

ings bank account and the account

continues to be in operation and is to

be used for credit linkage) no sepa-

rate KYC verification of the members

or office bearers is necessary.

� ACCOUNTS OF POLITICALLY EX-

POSED PERSONS

Politically exposed persons are indi-

viduals who are or have been en-

trusted with prominent public func-

tion in a foreign country, e.g. Heads of

States or of Governments, senior poli-

ticians, senior govern-

ment/judicial/military officers, se-

nior executives of state owned corpo-

rations, important political party offi-

cials, etc. Branches should gather suf-

ficient information on any per-

son/customer of this category in-

tending to establish a relationship

and check all the information availa-

ble on the person in the public do-

main. Branches should verify the

identity of the person and seek in-

formation about the sources of funds

before accepting the PEP as a cus-

tomer. Branches should open such

accounts with the approval of con-

trollers in respect of branches / BPR

outfits headed by officials of Junior Management/Middle Management. In

respect of branches / BPR outfits

headed by officers of Senior Man-

agement and above, such approval

should be accorded by the branch/operating unit head in per-

son.

Such accounts should be subjected to

enhanced monitoring on an ongoing

basis. The above norms should also

be applied to the accounts of the fam-



13

ily members and close relatives of

PEPs.

� ACCOUNTS OF NONFACE TO FACE

CUSTOMERS

In the case of non face to face cus-

tomers, apart from applying the usual

customer identification procedures,

there must be specific and adequate

procedures to mitigate the higher

risk involved. Certification of all the

documents presented should be in-sisted upon and, if necessary, addi-

tional documents may be called for.

In such cases, banks may also require

the first payment to be effected

through the customer’s accounts with

another bank which, in turn, adheres

to similar KYC standards. In the case

of cross border customers, there is

the additional difficulty of matching

the customer with the documentation

and the bank may have to rely on

third party certification/introduction.

In such cases, it must be ensured that

the third party is a regulated and su-

pervised entity and has adequate KYC

systems in place as responsibility for

correctness of identity/residence

proof lies with the branch monitoring

such account or handling the transac-

tion. Non face to face customers are

those with whom the Branch has no

direct interaction at the time of open-

ing the account e.g. NRI customers

who opened the account without vi-

siting the branch. Branches should

insist on certification of documents

for photo ID and proof of residence

by either of the following:

(i) Banker

(ii) Notary Public

(iii) Indian Embassy

� INDIVIDUAL NRE ACCOUNTS:

Accounts to be opened on the basis

of the following documents: Pass-

port and Residence Visa Copies,

duly attested by (i) Banker (ii) No-

tary Public (iii) Indian Embassy

� ACCOUNTS OF MINORS:

Often a family member or guardian

would open an account for a minor.

If minor is less than 10 years of

age, ID proof of the person who

will operate the account is to be

obtained. In cases where minor can

operate the account independently, KYC procedure for identifica-

tion/address verification as in the

case of any other individual would

apply.

PIO: Person of Indian Origin

OCI: Overseas Citizen of India

KUA – KYC User Agency FIU-IND-Financial Intelligence Unit India

KYCR-Central Know Your Customer Registry

PEP –Politically Exposed Person

� HINDU UNDIVIDED FAMILY (HUF):

HUF comes into being because of a

particular concept under Hindu Law

whereby all the members of the fami-

ly reside together jointly, carry on a

business activity jointly and hold the

property jointly and therefore, it is

termed as Hindu Undivided Family.

Declaration from the Karta. Proof of

Identification of Karta. Prescribed



14

Joint Hindu Family Letter signed by

all the adult coparceners.

� TRUST/NOMINEE OR FIDUCIARY

ACCOUNTS

There exists the possibility that

trust/nominee or fiduciary accounts

can be used to circumvent the cus-

tomer identification procedures.

Bank should determine whether the

customer is acting on behalf of an-

other person as trustee/nominee or

any other intermediary. If so, bank

should insist on receipt of satisfac-

tory evidence of the identity of the

intermediaries and of the persons on

whose behalf they are acting, as also

obtain details of the nature of the

trust or other arrangements in place. While opening an account for a trust,

bank should take reasonable precau-

tions to verify the identity of the trus-

tees and the settlers of trust (includ-

ing any person settling assets into the

trust), grantors, protectors, benefici-

aries and signatories. Beneficiaries

should be identified when they are

defined. In the case of a ‘foundation’, steps should be taken to verify the

founder managers/directors and the

beneficiaries, if defined.

� PROPRIETARY CONCERNS

While obtaining prescribed docu-

ments for opening of accounts of

proprietary concerns, the bank

should take reasonable measures to

identify the beneficial owner (s) and

verify his/her/their identity in a

manner so that it is satisfied that it

knows who the beneficial owner(s)

is/are. Accordingly, apart from above

mentioned customer identification

procedure, branches should call for

and verify the following documents

before opening of accounts in the

name of proprietary concern:- i)

Proof of the name, address and activi-

ty of the concern like registration cer-

tificate (in the case of a registered

concern), ii) certificate/license issued

by the Municipal authorities under

Shop & Establishment Act, iii) sales

and income tax returns, iv) CST/VAT

certificate, certificate/registration

document issued by Sales

Tax/Service Tax/Professional Tax au-

thorities, v) License issued by the Re-

gistering authority like Certificate of

Practice issued by Institute of Char-

tered Accountants of India, Institute

of Cost Accountants of India, Institute

of Company Secretaries of India, In-

dian Medical Council, Food Drug and

Control Authorities, vi) registra-

tion/licencing documents issued in

the name of the proprietary concern

by the Central Government or the

State Government Authori-

ty/Department. vii) Banks may also

accept IEC (Importer Exporter Code) issued to the proprietary concern by

the office of DGFT as an identity doc-

ument for opening of the Bank ac-

count.

� Any two of the above documents

would suffice. These documents

should be in the name of the proprie-

tary concern.

� These guidelines will apply to all new

customers, as well as accounts of ex-

isting customers. The KYC documents



15

as per these guidelines for the exist-

ing accounts should be obtained and

the KYC particulars are updated.

� NRI customers are classified as “High

Risk Customer” and therefore it is

necessary to carry out KYC re-check

for this segment at the periodicity of

every two years, as per the Regulato-

ry requirement. Presently, NRI cus-

tomers can submit fresh documents

for e-KYC as per following: a. Cus-

tomers visiting the branch in per-

son: KYC documents viz- Proofs of

Identity and Overseas address proof

etc have to be submitted across the

counters.

� b. Customers not visiting the

branch: The KYC documents have to

be sent to the home branch through

post or courier from overseas. Addi-

tionally, third party attestation of all

the requisite KYC documents is also

required. Each of the single / joint

NRI account holder has to submit fol-

lowing additional document in addi-

tion to the proofs of identity and

overseas address as part of KYC doc-

uments: The NRI should be a resident

of any of the listed 30 (thirty) coun-

tries only (e.cir.sl.no:1447/2014-

15 dt:16/03/2015)

� Key features of KYC due diligence for

NRIs are mentioned below:

a) The KYC due diligence will entail

obtention of “Proof of Status”, “Proof

of Identity”, “Proof of Permanent Ad-

dress (either of Overseas or Indian)”

and “Current Address document

(overseas only)”. The customer has

the liberty to indicate one of these

addresses as the address for corres-

pondence. For customers not visiting

our branches i.e. nonface to face

customers, an additional proof will be

needed.

b) In case of NRIs/PIOs/OCIs, they will

mandatorily give copy of their pass-

port for “Proof of Identity”, and the

same document can also be accepted

for “Proof of Permanent Address”

(provided there is no change in per-

manent address). In case they want to

give permanent address other than

the one appearing in Passport, then

any of the Officially Valid Document

(OVD) carrying the address should be

obtained.

(e.cir.sl.no:103/2015-16

dt:22/04/2015

� The e-KYC auto population functio-

nality has since been rolled out in the

Branch as well as to our Business

Correspondent (BC) Kiosk Banking

channel across the country.

� A periodic report of all KYC non-

compliant NRI CIFs for every branch

and a cumulative report for control-

lers, on the monthly basis, as de-scribed below:

I. Report for branches:

a. Name of this report will be as,

“KYCNRI <number of report> - NRI

KYC Branch wise Report.pdf’ b. This report has to be downloaded

by the branch from

https://sbedwp.statebanktimes.in/S

BIEDW/, by entering valid creden-

tials of the concerned branch official

(HRMS credential with appropriate

privileges) c. Report will be uploaded

by 17th of every month for the ‘KYC



16

non-compliant NRI CIFs’ as on the

last day of previous month.

II. Report for controllers:

a. Name of this report will be as,

“NON KYC NRI DATA for Control-

lers as on <month name>”

b. Report will be uploaded by 17th of

every month for the ‘KYC non-

compliant NRI CIFs’ as on the last day

of previous month.

c. This report can be downloaded

from

http://10.0.10.22/pr/newindexh.jsp

� “Money Mules” can be used to

launder the proceeds of fraud

schemes (e.g. phishing and identity

theft) by criminals who gain illegal

access to deposit accounts by re-

cruiting third parties to act as “mon-

ey mules.” In some cases these third

parties may be innocent while in

others they may be having complici-

ty with the criminals.

� In a money mule transaction, an indi-

vidual with a bank account is re-

cruited to receive cheque deposits or

wire transfers and then transfer these funds to accounts held on be-

half of another person or to other

individuals, minus a certain commis-

sion payment. Money mules may be

recruited by a variety of methods,

including spam emails, advertise-

ments on genuine recruitment web

sites, social networking sites, instant

messaging and advertisements in

newspapers. When caught, these

money mules often have their bank

accounts suspended, causing incon-

venience and potential financial loss,

apart from facing likely legal action

for being part of a fraud. Many a

times the address and contact details

of such mules are found to be fake or

not up to date, making it difficult for

enforcement agencies to locate the

account holder.

� The operations of such mule accounts

can be minimized by following the

guidelines on opening of accounts

and monitoring of transactions. It is,

therefore, advised to strictly adhere

to the guidelines on KYC/AML/CFT

issued from time to time and to

those relating to periodical updation

of customer identification data after

the account is opened and also to

monitoring of transactions in order

to protect the bank and the bank’s customers from misuse by such

fraudsters. The officer-in-charge

vested with the authority to open

the account, should ensure com-

pliance with the KYC guidelines. The

employee/officer, who has inter-

viewed the customer should sub-

scribe his signature, in the space

provided in the account opening form, for having interviewed the

prospective customer and should

ensure that all aspects of KYC guide-

lines are complied with.

� BUSINESS CORRESPONDENTS

(BCs)/BUSINESS FACILITATORS

(BFs) Bank has established alternate

channels for personal banking and

rural banking and has appointed

above functionaries to facilitate as-

signed activities. These functionaries

will have inter alia, role in

KYC/AML/CFT measures implemen-



17

tation which has been spelt out here

under :- 1) Business Correspondents

(BCs) Will facilitate filling up of ac-

count opening forms, procurement

of KYC documents, photograph etc.

and put up to the home Branch 2)

Business Facilitators (BFs) where

the account will reside. Necessary

verification will be done at Home

branch. It is pertinent to mention

that while functionaries of alternate

channels will facilitate completion of

KYC formalities in respect of ac-

counts opened through them, prima-

ry responsibility of ensuring KYC

compliance in respect of all accounts

maintained with it including review

of KYC, risk categorization, monitor-

ing of transactions etc. will rest with

the parent branch.

� The Customer Identification Pro-

cedures are to be carried out at the

following stages:- (e-cir. Sl.no: 840/2014-15 dt:14/10/2014)

� While establishing a banking rela-

tionship;

� When the bank feels it is necessary to

obtain additional information from

the existing customers based on the

conduct or behaviour of the account.

� Customer identification data (includ-

ing photograph/s) should be periodi-

cally updated after the account is

opened.

� Full KYC exercise will be required to

be done at least every two years for

high risk individuals and entities.

� Full KYC exercise will be required to

be done at least every ten years for

low risk and at least every eight

years for medium risk individuals

and entities.

� Customer Identification will also be

carried out in respect of non account

holders approaching bank for high

value transactions as well as any per-

son or entity connected with a finan-

cial transaction which can pose sig-

nificant reputational or other risks to

the Bank.

� Letters of Thanks in all instances of

opening of new accounts to be sent

by registered post at the recorded

addresses to all customers with dual

purpose of thanking them for open-

ing the account with the Bank and for

verification of genuineness of ad-

dress furnished by the account

holder. Undelivered envelopes in this

regard would be required to be fol-

lowed-up closely at branch / CPC

level and proper noting is to be made

in the formalities register at the

branches. Copies of letters are to be

kept on record.

� When signatories change, care should

be taken to ensure that the identity of

any new signatories has been veri-fied.

� A number of cheque books are

being returned as undelivered due to

the recipient’s address being incor-

rect. The customer, while applying for a cheque book has the option of

requesting the delivery of the cheque

book at the address recorded in CBS

or on any other address of his choice.

The cheque book requisition slip

provided in the cheque book gives

the account holder two options for

entering the address for dispatch –



18

Address alongside – which is the ad-

dress recorded in the CBS Address

given overleaf – which the account

holder needs to write overleaf in case

he wishes to take the delivery of the

cheque book at any other address of

his choice.

� Transfer of Non –KYC Compliant

Accounts-

In case of the transfer of accounts

where KYC non-compliant accounts,

the customer should be asked to

make it KYC compliant before trans-

fer. CBS does not permit transfer of

Non-KYC accounts.

TRANSFER OF INOPERATIVE ACCOUNT: :

(e Cir Sl. No. : 560/16 – 17 dated 28.07.16)

Inoperative Accounts should be made

operative before its transfer to the

transferee branch. Therefore, trans-

feree branch should ensure that ac-

count is made operative by customer

before submitting the application for

transfer of account

The Mental Health Act, 1987 provides

for a law relating to the treatment and care of mentally ill persons and

to make better provision with respect

to their property and affairs. Accord-

ing to the said Act, “mentally ill per-

son” means a person who is in need of treatment by reason of any mental

disorder other than mental retarda-

tion. Sections 53 and 54 of this Act

provide for the appointment of guar-

dians for mentally ill persons and in

certain cases, managers in respect of

their property. The prescribed ap-

pointing authorities are the district

courts and collectors of districts un-

der the Mental Health Act, 1987.

The National Trust for Welfare of

Persons with Autism, Cerebral Palsy,

Mental Retardation and Multiple Dis-

abilities Act, 1999 provides for a law

relating to certain specified disabili-

ties. Clause (j) of Section 2 of that Act

defines a “person with disability” to

mean a person suffering from any of

the conditions relating to autism, ce-

rebral palsy, mental retardation or a

combination of any two or more of

such conditions and includes a per-

son suffering from severe multiple

disabilities. This Act empowers a Lo-

cal Level Committee to appoint a

guardian, to a person with disabili-

ties, who shall have the care of the

person and property of the disabled

person.

Banks should take note of the legal

position stated above and may rely

on and be guided by the or

ders/certificates issued by the com-

petent authority, under the respec-

tive Acts, appointing guar-

dians/managers for the purposes of

opening/operating bank accounts. In case of doubt, care may be taken to

obtain proper legal advice.

e KYC

� Aadhaar based e-KYC Services has

been made live in the Bank. The printed e-KYC certificate can be used

for CIF/account opening in CBS sub-

ject to satisfying other account open-

ing requirements. The certificate

generated through e-KYC application

is solely meant for e-KYC purpose

and for use within our Bank only. (e.cir.sl.no.85/14– 15dt:25/04/2014)



19

• KYC Requirements

� Pehla Kadam: Date of Birth proof

of the Minor + KYC of the Parent

� Pehli Udaan:Date of Birth proof of

the Minor + KYC of Minor

� Pehla Kadam is a Savings Bank

account for minor of any age oper-

ated jointly with his/her Par-

ent/Guardian or singly by Par-

ent/Guardian, while Pehli Udaan

is a singly operated Savings Bank

Account for a Minor aged 10 years

and above and who can sign uni-

formly.

� These accounts offer a complete

bouquet of banking products to the

children.

� Bank has implemented the UNI-

FORM CUSTOMER IDENTIFICA-

TION CODE (UCIC) – a relationship

number - in the form of Customer

Information File (CIF) to all cus-

tomers of the Bank simultaneously

with the introduction of CBS in the

Bank. As per RBI guidelines, all the multiple CIFs, either at the same

Branch or at different Branches, of

the same customer should be de-

duped/ merged into a single CIF

(the process being called de-

duplication of CIFS) - to meet the

requirements of RBI guidelines.

(e.cir.sl.no.711/2014 – 15

dt:18/09/2014)

Foreign Contribution (Regulation)

Act, 2010

(e Cir. Sl. No. : 1513/2016 – 17 dt

15.02.2017)

Branches while opening accounts

under FCRA should ensure com-

pliance with provisions of the FCRA

Act 2010,Reserve bank guidance on

Foreign Contribution (Regulation)

Act, 2010 and Foreign Contribution

(Regulation) Rules, 2011.

The Act stipulates that every person

who has been granted a certificate of

registration / prior permission shall

receive foreign contribution in a sin-

gle account and only through such

Branches of a bank as may be speci-

fied in his / her application. It strict-

ly prohibits the receipt or deposit

of any other funds (other than for-

eign contribution) in such ac-

counts.

If Registration No. is available de-

tails of Registered Association &

FCRA Certificate may be verified

from: https://fcraonline.nic.in/home/index.aspx

If FCRA Registration No. is not

available:Goto: https://fcraonline.nic.in/home/index.aspx. Then click on information bank link

at the top of the page where the fol-

lowing data is available :

• List of associations registered under

FCRA

• List of associations granted prior

permission Under FCRA

• List of associations whose registra-

tion has been cancelled

• List of associations that have filed

annual returns.



20

• List of associations that have not

filed annual returns.

• List of associations that have filed

quarterly returns.

Note: If you don't have the details to

key in on the abovementioned screen

then find the state from the benefi-

ciary bank branch details and identify

state. Even if you put only state, it

will fetch you all the Registered Asso-

ciations in all the Districts in that

state.

GUIDELINES FOR RECEIVING OF

FOREIGN CONTRIBU-

TION/DONATIONS BY NGOs (e cir. Sl. No. : 496/2016 – 17 dated 13.07.2016)

i. Foreign contribution should be

provided only to FCRA designated ac-

count of the FCRA registered NGOs. ii. Non-FCRAA/Cs cannot receive for-

eign donations.

iii. In case of Non-FCRA NGOs, foreign

contribution can be received by tak-

ing prior permission from Ministry of

Home Affairs (MHA).

iv. Any FCRA-registered NGO, which

receives donation / contribution

from abroad cannot further transmit

it to any non-FCRA NGOs.

v. No local contributions can be re-

ceived in an FC Account of a FCRA

registered organisation.

vi. The foreign NGOs, which have been put under “Prior approval cat-

egory (PAC)”, can receive foreign

contribution only after taking prior

permission from Ministry of Home

Affairs, Government of India.

Prohibition of display of Aadhaar

number of residents in public do-

main (e cir. Sl. No. : 1411/2015 – 16

dated 16.02.2016)

As per the Supreme Court order

dated 11.08.2015, it is the responsi-

bility of those agencies to:

a) Protect the identity of Aadhaar

card holders by maintaining the ne-

cessary confidentiality of his Aadhaar

number; and

b) To ensure that Aadhaar numbers

are not posted, displayed, or made

available in public domain such as in-

ternet, web, public notices etc.

In case there is a requirement to pub-

lish a list of individuals by any de-

partment or any agency through a

public notice, such list shall not con-

tain Aadhaar numbers.”

‘Officially Valid Documents’(In case

change in name on account of mar-

riage or otherwise) Reserve Bank has advised Banks that

it has been receiving references/ re-

presentations from banks and indi-

viduals regarding the problems faced

by persons who change their name due to marriage or otherwise, in

submitting an ‘Officially Valid Docu-

ment’ (OVD) while opening a new

bank account or during

periodic updation exercise or incor-

porating the name change in the ex-

isting accounts. The OVD issued in

the original name, which is not up-



21

dated due to various reasons, still

show the maiden/ previous name of

such persons.

Banks are advised that they may ac-

cept a copy of marriage certificate is-

sued by the State Government or Ga-

zette notification indicating

change in name together with a certi-

fied copy of the ‘officially valid docu-

ment’ in the existing name of the per-

son while establishing an account

based relationship or while under-

going periodic updation exercise.

Fictitious Offer of Funds” (FOF)

(e cir SL 508/2017-18 dt 11.10.2017)

Fictitious Offer of Funds” (FOF) cases

are defined as those illegal activities

whereby one individual / group /

entity deceives or misleads another

individual or entity by making false

promises to give some benefits

against payment of money in speci-

fied accounts of the fraudsters. The

money subsequently gets withdrawn

from these accounts by the fraudster.

Fictitious offers may include job of-

fers, mobile tower installation offers,

admission offers in reputed Educa-

tional Institute, winning lottery, offer

of gifts from foreign land, offer of money from reputed organisations

like IMF, RBI etc,

In all such cases, Branch is required

to file an STR and the proposed SOP

for dealing with the same is as under:

i) Complaint from victims of fictitious

offers be taken in writing under vic-

tim’s full signature supported by ID

proof and followed by recording the

complaint in complaint register. Fur-

ther, to make a suitably worded re-

porting to controller with a simulta-

neous action of temporary hold in the

account of the alleged recipient (cul-

prit) for the value under complaint

wherever, the complainant provides

/ branch unravels convincing

grounds / evidence to justify the

same.

Simultaneously, advise the complai-

nant that our hold will work tempo-

rarily for 2-3 days only and that he

should invoke legal recourses availa-

ble against the recipient (culprit).

ii) Branch will report all such qualify-

ing cases as defined above at the mail

id. [email protected] with a cap-

tion on top “ CARE-FICTITIOUS OF-

FER CASE” and endorse a copy to

AGM (S&I) of the concerned Circle or

the MLRO of the BU in case of MCG

and CAG.

iii) The AGM (S&I) will be the Nodal

Officer for ensuring filing of all such

STRs to AML-CFT at

[email protected]. Each case

where an STR has been filed by the Branch will be monitored by the AGM

(S&I) or the MLRO of the BU in case

of MCG and CAG and details submit-

ted to AML-CFT cell for onward re-

porting to FIU.

iv) In case the perpetrator of FOF

maintains an account with SBI, then



22

inform the home branch immediately

for cross-checking the KYC docu-

ments and other credentials of their

customers.

v) The customer should also be ad-

vised to lodge a complaint / FIR with

the appropriate LEA in case the cul-

prit doesnot maintain an account

with the Bank.

vi) Investigation and permanent

freezing / closure of the account of

perpetrator of FOF:

SHELL COMPANY

A Shell company is a company with-

out active business operations / sig-

nificant assets and is normally used

to disguise business ownership from

Law Enforcement Agencies.

As Shell companies apparently bear

most of the characters as of a normal

company registered under the Com-

panies Act, these can be distinguished

with genuine companies only on the

point of activities.

Branches are required to ensure me-

ticulous compliance of following to

restrain a Shell Company from having

a banking relationship with us.

a) At time of on boarding

i) Obtaining Board resolution regard-

ing opening of A/C

ii) Obtaining prescribed KYC docu-

ments / OVDs in respect of :

a. Company b. signatories / Directors

c. Beneficial owners (if any)

Note: PAN of Companies & AADHAR

of signatories / Directors / Beneficial

owners has to be obtained.

iii) Verification of incorporation cre-

dentials of Company from website

www.mca.gov.in

iv) Recording in CBS / AOFs the de-

tail of BOs(if any) & extent of their

ownership

c) Post account opening

The operating Official to keep close

watch over conduct of account of

companies from the following pers-

pective:

i) Verifying the reasonability of

transactions inconsistent to profile /

business activity of company.

ii) Sudden high value credits (by

cash/ by transfer) followed by im-

mediate transfer should be enquired

into with utmost care.

iii) Balance sheets should be obtained

and examined for major variances

with the turnovers in accounts.

Attributes common to Shell com-

panies:

i. No physical presence (other than a

mailing address)

ii. Sharing of common registered ad-dress by multiple companies.

iii. Nominal paid-up capital

iv. High reserves and surplus on ac-

count of receipt of high share pre-

mium

v. Investment in unlisted companies

vi. No dividend income



23

vii. Private companies as majority

shareholders

viii. Low turnover and operating in-

come

ix. Nominal expenses

x. Nominal statutory payments

xi. Nominal stock in trade

xii. Minimum fixed assets.

xiii. Financial performance is notice-

ably inconsistent with that of other

businesses of comparable size in the

same industry

xiv. Directors are persons of very low

means: Individually they have no as-

sets nor any substantial source of in-

come.

xv. Request of Debits in account are

apparently raised to be purposeless.

xvi. In Bill collection / Bill discount-

ing transactions, goods or services

underlying the transactions do not

match with the company’s profile as

disclosed.

xvii. Transactions (Debit / Credit) in

A/C appears to have been done with

entities engaged in unrelated busi-

nesses

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