(know your customer, Money Laundering, Anti Money Laundering, Banking Ombudsman & Basel Norms).

1. ASHA PRIYA GOUD
GITAM INSTITUTE OF MANAGEMENT
GITAM UNIVERSITY.

2. Vision Statement:
 To be the leading financial services provider,
partnering with our customers for a more
prosperous and secure future
Mission Statement
 We are a team of committed professionals,
providing innovative and efficient financial
solutions to create and nurture long-term
relationships with our customers. In doing so, we
ensure that our shareholders can invest with
confidence and trust in us.

3.  Know Your Customer – KYC enables banks to
know/understand their customers and their
financial dealings to be able to serve them
better and prudently manage the risks of
Money Laundering and Financing of
Terrorism
 CDD-CUSTOMER DUE DILIGENCE

4. KYC/Customer due diligence is an on-going process for prudent banking
practices, therefore the banks are encouraged to:-
 Set up a compliance unit with a full time Head.
 Set up a system to monitor the accounts and transactions on a regular basis.
 Update customer information and records at reasonable intervals.
 Chalk out plan of imparting suitable training to the staff of bank periodically.
 Maintain proper records of customer identifications and clearly indicate, in
writing.
 Monitor and check unusually large cash transactions, especially those which are
out of character/ inconsistent with the history.

5.  Why kyc?
 When does kyc apply?
 Are kyc requirements new?

6.  Customer Identification
 Customer Acceptance
 Accounts & Transactions
Monitoring
 Risk Management

7. Individuals:
(i) Attested photocopy of national identity card or passport of the
individual.
(ii) In case the NIC does not contain a photograph, the bank should
also obtain, in addition to NIC, any other document such as
driver’s license etc that contains a photograph.
(iii) In case of a salaried person, attested copy of his service card, or
any other acceptable evidence of service, including, but not limited
to a certificate from the employer.
(iv) In case of illiterate person, a passport size photograph of the new
account holder besides taking his right and left thumb impression
on the specimen signature card.

8. Partnership:
Attested photocopies of identity cards of all partners.
 Attested copy of “Partnership Deed” duly signed by all partners of
the firm.
 Attested copy of Registration Certificate with Registrar of Firms.
In case the partnership is unregistered, this fact should be clearly
mentioned on the Account Opening form.
 Authority letter, in original, in favor of the person authorized to
operate on the account of the firm.

9.  Money laundering is the process whereby the
proceeds of crime are transformed into
ostensibly legitimate money or other assets
PLACEMENT
LAYERING
 INTEGRATION

10.  FATF-FINANCIAL ACTION TASK
FORCE
31 Countries are involved INDIA being one
among them.
They came out with recommendation:
 Good governance of financial institutions.
 Integrity of financial institutions.

11. AML-ANTI MONEY LAUNDERING
PML-PREVENTION OF MONEY
LAUNDERING
FIU-FINANCIAL INTELLIGENCE UNIT
Set up by each government to keep the track of the
suspicious accounts.(FINANCE MINSTRY)
STR-SUSPICIOUS TRANSCATION REPORT
SCC-SPECIAL CATEGORY CLIENTS
NCCT-NON COOPERATIVE COUNTERIES &
TERRITORIES

12.  HSBC Bank USA Failed to Provide Adequate Staffing and
Other Resources to Maintain an Effective AML Program
 HSBC Bank USA Failed to Conduct Due Diligence on HSBC
Group Affiliates
 HSBC Bank USA Failed to Adequately Monitor Wire
Transfers

13.  Change in Leadership and increase in resources. The Bank
hired a new leadership team. In 2011, the Bank spent more
than $244 on its compliance program. The Bank substantially
increased the personnel in its compliance function from 92
full time employees and 25 consultants in 2010 to 880 full
time employees and 267 consultants as of May 2012
 Exiting high risk business lines. The Bank exited the
Banknotes business and ended 109 high risk business
relationships.
 Claw Backs. The Bank ‘clawed back’ compensation from
senior company executives.

14. BANK
Banking is defined as accepting for the purpose of lending and investment, deposit of
money from the public repayable on demand and withdraw by cheque , draft order or
otherwise.
OMBUDSMAN
An official appointed to investigate individual ‘s complaint
against maladministration especially that of public authorities.

16.  Delay and failure in providing necessary banking services and products
like debit cards.
 Levying additional charges for the products without informing the
customer
 Refusal / delay in accepting payment towards the taxes
 Non adherence to the RBI guidelines in the matter of credit and debit cards
 Non compliance of interest rates as per guidelines of RBI
 Non observance of any other directions or instructions of RBI from time to
time
 Non acceptance of loan application without furnishing valid reasons
 Delays in sanction or non observance of prescribed time schedule for
disposal of loan applications

17.  The BCSBI would plan, evolve, prepare, develop, promote and publish
voluntary comprehensive codes and standards for banks for providing fair
treatment to their customers.
 The proposal for setting up the BCSBI was based on the recommendation
made by the Committee on Procedures and Performance Audit on Public
Services (Tara pore Committee), in its Report No.6 dealing with
Benchmarking, ISO Certification and Performance Audit.
 The BCSBI would function as an independent and autonomous watch dog
to monitor and to ensure that the banking codes and standards voluntarily
adopted by banks are adhered to, in true spirit by banks in delivering the
services, as promised, to their customers

18. Basel is the round of deliberations by central bankers from
around the world, and in 1988, the Basel Committee on
Banking Supervision (BCBS) in Basel, Switzerland, published
a set of minimum capital requirements for banks.
This is also known as the 1988 Basel Accord, and was
enforced by law in the Group of Ten (G-10) countries in 1992.
A new set of rules known as Basel II was later developed with
the intent to supersede the Basel I accords.

19. In 1988, the Basel I Capital Accord was created.
The general purpose was to:
1. Strengthen the stability of international
banking system.
2. Set up a fair and a consistent international
banking system in order to decrease competitive
inequality among international banks.

20. Basel – II norms are based on 3 pillars:
 Minimum Capital – Banks must hold capital against
8% of their assets, after adjusting their assets for risk
 Supervisory Review – It is the process whereby
national regulators ensure their home country banks
are following the rules.
 Market Discipline – It is based on enhanced disclosure
of risk

21. Basel – III norms aim to:
 Improving the banking sector's ability to
absorb shocks arising from financial and
economic stress
 Improve risk management and governance
 Strengthen banks' transparency and
disclosures

22.  In the Basel – II accord, Credit Risk, Market Risk
and Operational Risks were recognized.
 Under Basel – II, Credit Risk has three approaches
namely, standardized, foundation internal ratings-based
(IRB), and advanced IRB
 Operational Risk has measurement approaches like
the Basic Indicator approach, Standardized approach
and the Advanced Measurement approach.
 Better Capital Quality