Homogeneous KYC Regulation norms by Nov’11
SEBI to come out by Nov’11 Homogenous norms for setting up a uniform Know Your Customer (KYC) Regulation Authority. It will relieve the burden comparable on the intermediaries as well as the common man, seeking to make investments.
This mechanism once set would make certain that KYC exercise is undertaken only once and enabling all intermediaries to access a prospective client’s number for getting his KYC status.
Factsheet: Know Your Customer (KYC)
Know Your Customer (KYC) is the due diligence and bank regulation that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them.
Know your customer policies are becoming increasingly important globally to prevent identity theft fraud, money laundering and terrorist financing.
Beyond name matching, a key aspect of KYC controls is to monitor transactions of a customer against their recorded profile, history on the customers account(s) and with peers.
Banks doing KYC monitoring for anti-money laundering (AML) and checks relating to combating the financing of terrorism (CFT) increasingly use specialized transaction monitoring software, particularly names analysis software and trend monitoring software. The generated alerts identify unusual activity which is then subject to due diligence or enhanced due diligence (EDD) processes that use internal and external sources of information on the subject, including the internet. This helps to determine whether a transaction or activity is suspicious and requires reporting to the authorities.
Some specialist consultancies help multinational companies and SMEs conduct Know Your Customer processes when entering new markets.
The Reserve Bank of India introduced KYC guidelines for all banks in 2002. In 2004, RBI directed that all banks ensure that they are fully compliant with the KYC provisions before December 31, 2005. The purpose was to prevent money laundering, terrorist financing and theft.
Topics: Anti-money laundering software • Bank regulation • Banking in India • Crime • Economy • Financial regulation • Know Your Customer • KYC • Money • Money Laundering • Politically exposed person • Terrorism financing