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IIBF AML KYC NOTES PART 2 2022

IIBF AML KYC NOTES PART 2 2022

IIBF AML KYC NOTES:- IIBF’s AML & KYC exam dates are just around the corner and the time for the registrations for the 2021 attempt has been closed on the 24th of November 2021. 

If you are looking for the AML notes for the 2021 attempt then you are at the right place. Learning Sessions hereby provides you the notes with the help of which you can revise your AML’s topics very easily. 

ANTI-MONEY LAUNDERING & KNOW YOUR CUSTOMER SYLLABUS FOR 2021-2022

PAPER MODULE-A i.e AML & KYC: Anti-Money Laundering

 

AML & KYC  It introduces you with the concept of Money Laundering, how it Originated, Definition & Techniques that are used for money laundering, its Impact on Banks-Structuring; Integration, Preventive Legislations for money laundering, International Co-operation, United Kingdom; USA; India, Basel Committee, Prevention of Money Laundering Act, 2002: PMLA Objectives, Reserve Bank of India Guidelines on the System Adequacy to Combat issues related to it, IBA Working Group, Financial Intelligence Unit, Antiterrorism finance, Financial Action Task Force, Software for AML Screening: Money Laundering & Correspondent Banking, Exchange Companies including Foreign Branches.

 

MODULE – A: Anti Money Laundering

Records to be maintained (nature and value): Rule 3 

Rule 3 of 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 & Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 prescribes the obligations given underneath for the maintenance of records which every banking company or financial institution or intermediary (as per the case maybe) shall maintain the record of all transactions of:

Important Topic:- IIBF AML KYC NOTES 2022

  1. Cash transactions > Rs.10,00,000.00 or its equivalent in foreign currency; 
  2. Series of Cash transactions that are integrally connected to each other valued < Rs.10,00,000.00 or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value > Rs. 10,00,000.00;
    1. All transactions involving receipts by NPOs (non-profit organisations) > Rs.10,00,000.00 or its equivalent in foreign currency; 
  3. all cash transactions in which forged or counterfeit currency or bank notes been used as genuine or where valuable security or a document was forged has taken place facilitating the transactions; 
  4. all suspicious transactions whether in cash or not & by way of:
  1. deposits & credits, withdrawals into or from any account in any currency maintained by way of: 
    1. cheques including 3rd party cheques, POs, DDs, cashiers’ cheques or any other instrument including electronic receipts or credits & electronic payments or debits, or 
    2. travelers’ cheques, or 
    3. transfer from one account (from or to Nostro and Vostro accounts) within the same banking company, financial institution and intermediary, as the case may be, or 
    4. any other mode; 
  2. credits or debits into or from any non-monetary accounts like demat account, security account (in any currency); 
  3. money transfer or remittances in favour of own clients or non-clients from India or abroad and to 3rd party beneficiaries in India or abroad including transactions on its own account in any currency by any of the below methods: 

Read Also:- AML KYC FREE SHORT NOTES | MODULE – A: ANTI-MONEY LAUNDERING

  1. payment orders, or 
  2. cashiers’ cheques, or 
  3. DD (demand drafts), or 
  4. telegraphic or wire transfers or electronic remittances or transfers, or 
  5. internet transfers, or 
  6. Automated Clearing House remittances, or 
  7. lock box driven transfers or remittances, or 
  8. remittances for credit or loading to e-cards, 
  9. any other mode; 
  1. loans & advances (credit or loan substitutes), investments & contingent liability by way of: 
  1. subscription to debt instruments (such as commercial paper, certificate of deposits, preferential shares, interbank participation or the like), or 
  2. purchase & negotiation of bills, cheques & other instruments, or 
  3. forex contracts, currency, interest rate and commodity and any other derivative instrument, or 
  4. LCs, standby LCs, guarantees, solvency certificates, comfort letters, & any other instrument for settlement and/or credit support; 
  1. collection services in any currency (by way of collection of bills, cheques, instruments.

Information contained in Records: The records shall contain all information that has been specified by the Regulator to permit reconstruction of individual transaction. And it shall include:

  1. transactions’ nature; 
  2. transaction amount and the currency in which it was denominated; 
  3. the date of transaction; 
  4. parties to the transaction.

Important Topic:- IIBF AML KYC MOCK TEST 2022

Procedure for maintaining information: The information is to be maintained in accordance with the procedure and manner as may be specified by its Regulator including RBI, SERI or IRDA from time to time

As per the guidelines it is the duty of every banking company, intermediary and financial institution, as the case may be, to follow the procedure and the manner of maintaining information as specified by its Regulator. 

Reporting to Financial Intelligence Unit — India: Banks are obligated to report information of cash and suspicious transactions and all transactions that involves receipts by NPOs > Rs. 10,00,000.00 or its equivalent in foreign currency to the Director of FIU-IND (Financial Intelligence Unit-India). 

Cash Transaction Report: CTR for each month should be submitted by 15th of the next month to FIU-IND. Although the details of individual transactions < Rs. 50,000.00 need not be furnished.

Forged or Counterfeit Indian currency notes: All cash transactions in which forged or counterfeit Indian currency notes have been used as genuine should be reported within 7 working days from the transaction date. 

Suspicious Transaction Report: STR is required to be furnished within 7 days of arriving at a conclusion that any transaction (cash or non-cash) or a series of transactions integrally connected are of suspicious nature. The report of transactions > Rs. 10,00,000.00 or its equivalent in foreign currency should be submitted to the Director of FIU-IND by 15th of the next month (every month).

Banks are instructed not to put any restrictions such accounts but the banks and their employees should keep the fact (that the transactions of the account are being furnished) strictly confidential

Important Topic:- IIBF AML KYC STUDY MATERIAL 2021-2022

Verification of Records of Identity of Clients:

Section 12 of the Prevention of Money Laundering Act, 2002 and rules thereunder require the verification and maintenance of the records of the identity of all their respective clients, in prescribed manner. In other words, every banking company, financial institution and intermediary at the time of commencement of an account-based relationship, identify their clients, verify their identity and obtain information on the purpose & intended business relationship.

In all other cases, identification should be verified while carrying out for: 

(i) transaction > or = Rs. 50,000.00 whether as a single transaction or several transactions (connected), or 

(ii) any international money transfer operations. 

If it is not possible to verify the identify at the opening of account or when executing, it shall be verified within a reasonable time after the account has been opened or the transaction has been executed. 

Beneficial-owner: It shall also be determined whether the client is acting on behalf of a beneficial owner, if yes, then identify the beneficial owner and take all reasonable steps to verify his identity (beneficial owner). While Beneficial-owner means a natural person who ultimately controls or owns the client & or the person on whose behalf a transaction is being conducted, & includes a person who exercises ultimate effective control over the judicial person. 

Documents needed for verification of clients:

Individuals: (Officially valid document)

  • One certified copy containing details of identity and address
  1. One recent photograph and 
  2. Other documents including in respect of the nature of business and financial status of the client. 

Officially valid document includes the passport, Permanent Account Number (PAN) Card, the driving licence, Aadhar card, the Voter’s Identity Card issued by the Election Commission of India or any other document as may be required. 

Company: Certificate of incorporation; MOA & AOA; A resolution from the Board of Directors and power of attorney granted to its managers, officers or employees to transact on company’s behalf; and officially valid documents in respect of officers, managers or employees holding an attorney to transact on its behalf. 

Read Also:- IIBF AML KYC EXAM DATE 21-2022, REGISTRATION DATE, HOW TO APPLY

Partnership Firm: 

  1. Registration Certificate; 
  2. Deed of Partnership; & 
  3. Officially valid document (of the person holding POA to transact on Firms behalf). 

Trust Documents: 

  1. Registration certificate; 
  2. Trust deed; and 
  3. Officially valid document (of the person holding POA to transact on Trusts’ behalf. 

Association of Persons (AOP) or Body of Individuals (BOI): 

  1. Resolution of the managing body of such AOP or BOI; 
  2. Power of attorney (POA) granted to him or her to transact on its behalf; 
  3. Officially valid document (of the person who holds POA); and 
  4. such information that is required to collectively establish the legal existence of such AOP or BOI.

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