Prevention of Money-laundering Second Amendment Rules, 2010 - Obligation of Entities authorised to operate Payment System in India
RBI/2010-11/200
DPSS.CO.AD.No.552/02.27.004/2010-2011
September
15, 2010
All
the entities Authorized to operate Payment Systems in India
Madam/Dear
Sir
Prevention
of Money-laundering (Maintenance of Records of the Nature and Value of Transactions,
the Procedure and Manner of Maintaining and Time for Furnishing Information and
Verification and Maintenance of Records of the Identity of the Clients of the Banking
Companies, Financial Institutions and Intermediaries) Second Amendment Rules, 2010-obligation
of entities authorized to operate Payment System in India
Government of India vide its Notification No.10/2010-E.S/F. No.6/8/2009-E.S. dated
June 16, 2010 has amended the Prevention of Money-laundering (Maintenance of Records
of the Nature and Value of Transactions, the Procedure and Manner of Maintaining
and Time for Furnishing Information and Verification and Maintenance of Records
of the Identity of the Clients of the Banking Companies, Financial Institutions
and Intermediaries) Rules, 2005.
A copy of the Notification is enclosed
for
information and necessary compliance.
Please acknowledge the receipt.
Yours faithfully
(K. Sivaraman)
General Manager
Encl: as above
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 16th June, 2010
THE
GAZETTE OF INDIA: EXTRAORDINARY Part II- Sec. 3 (i)
G.S.R.
508(E)-
In
exercise of the powers conferred by sub - section(1) read with clause(h), clause(i),
clause(j) clause(k) of sub- section 2 of section 73 of the Prevention of Money Laundering
Act, 2002 (15 of 2003), the Central Government , in consultation with Reserve Bank
of India, hereby makes the following rules further to amend the Prevention of Money-laundering
(Maintenance of Records of the Nature and Value of Transactions, the Procedure and
Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance
of Records of the Identity of the Clients of the Banking Companies, Financial Institutions
and Intermediaries) Rules, 2005, namely :-
1. (1) These rules may be called Prevention of Money-laundering (Maintenance of
Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining
and Time for Furnishing Information and Verification and Maintenance of Records
of the Identity of the Clients of the Banking Companies, Financial Institutions
and Intermediaries) Second Amendment Rules, 2010.
(2) They shall come into force on the date of their publication in the Official
Gazette.
2. In the Prevention of Money-laundering (Maintenance of Records of the Nature and
Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing
Information and Verification and Maintenance of Records of the Identity of the Clients
of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005:-
(a) in rule 2 in sub-rule (1), after clause (g), the following Explanation shall
be inserted, namely:-
"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 act or by a terrorist, terrorist organisation or
those who finance or are attempting to financing of terrorism."
(b) in rule 9, for sub- rule (1A), the following sub- rule shall be substituted,
namely:-
"(1A) Every banking company, financial institution and Intermediary, as the case
may be, shall determine whether a client is acting on behalf of a beneficial owner,
identify the beneficial owner and take all reasonable steps to verify his identity."
(c) in rule 9, for sub- rule (1B), the following sub - rule shall be substituted,
namely:-
"(1B) Every banking company, financial institution and Intermediary, as the case
may be, shall exercise ongoing due diligence with respect to the business relationship
with every client and closely examine the transactions in order to ensure that they
are consistent with their knowledge of the client, his business and risk profile
and where necessary, the source of funds."
(d) in rule 9, for sub- rule (1C), the following sub- rule shall be substituted,
namely:-
"(1C) No banking company, financial institution and Intermediary, as the case may
be, shall allow the opening of or keep any anonymous account or account in fictitious
names or account on behalf of other persons whose identity has not been disclosed
or cannot be verified."
(e) in rule 9, after sub -rule (1C), the following sub- rule shall be inserted,
namely:-
"(1D) When there are suspicions of money laundering or financing of the activities
relating to terrorism or where there are doubts about the adequacy or veracity of
previously obtained customer identification data, every banking company, financial
institution and Intermediary shall review the due diligence measures including verifying
again the identity of the client and obtaining information on the purpose and intended
nature of the business relationship, as the case may be."
(f) in rule 10, after sub- rule (3), the following Explanation shall be inserted,
namely:-
"Explanation: For the purpose of this rule:-
(i) the expression 'records of the identity of clients' shall include records of
the identification data, account files and business correspondence.
(ii) the expression 'cessation of the transactions' means termination of an account
or business relationship."
[Notification
No. 10/2010- E. S. / F. No. 6/8/2009-E.S.]
S. R. MEENA, Under Secretary
Note - The principal rules were published in the Gazette of India , Extraordinary,
Part II , Section 3, sub- section (i) vide number G.S.R. 444( E), dated the 1st
July 2005 and subsequently amended by G.S.R.717( E) dated the 13th December
2005, G.S.R. 389( E) dated the 24 th May, 2007, G.S.R. 816(E) dated the
12th November 2009 and G.S.R. 76( E) dated the 12th February
2010.
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Notification No : DPSS.CO.AD.No.552/02.27.004/2010-2011Published in Others