Reserve Bank of India (Know Your Customer) Directions, 2016

May 30, 2019 | by Avantis RegTech Legal Research Team


The Reserve Bank of India (RBI) on May 29, 2019, has issued the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.

However, in terms of the provisions of Prevention of Money-Laundering Act, 2002, Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 and Aadhaar and other Laws (amendment) Ordinance, 2019, 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. 

Therefore, RBI has issued Directions that will be called as “Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016”.

Applicability:

(a) The provisions of these Directions shall apply to every entity regulated by RBI, more specifically defined in 3 (b) (xiii) of the Directions, 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) Where applicable laws and regulations prohibit implementation of these guidelines, the same shall be brought to the notice of the RBI.

(ii) In case there is a variance in KYC/ Anti-Money Laundering (AML) standards prescribed by the RBI 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 RBI and their home country regulators.

[Master Direction DBR.AML.BC.No.81/14.01.001/2015-16(RBI/DBR/2015-16/18]

Click here to download the Master Circular.


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