12.10 KNOW YOUR CUSTOMER Accustomer, for the purpose of this policy, is defined as: (a) A person or an entity that maintains an account and/or has a business relationship with the bank. (b) One on whose behalf the account is maintained (Le. the beneficial owner). (€) Beneficiary of transactions conducted by professional intermediaries such as stock brokers, chartered accountants, solicitors, ete. as permitted under the law and any persoa or entity connected with a financial transaction, 12.10.1 Key Elements of Know Your Client (KYC) Policy ‘The key clements of the KYC policy are Customer Acceptance Policy, Customer Identification Procedures, Monitoring of Transactions and Risk Management. Customer Acceptance Policy The Bank will: (a) classify customers into various risk categories and based on risk perception (b) dezide on acceptance criteria for each category of customers (©) accept customers after verifying their identity as laid down in Customer Identification Procedures (2) not open accounts in the name of anonymous/fcttious/enami persons (©) strive not to inconvenience the general public who desire to transact banking business Customer Identification Procedures ‘Customer identification has been defined as identifying the customer and verifying hisher identity by using reliable, independent source documents, data or information, Emphasis has been laid on verifying customer identity, not oaly while establishing a barking relationship but also atthe time of executing a transaction or when the bank hus adoubs about the authenticity/veracity or the adequacy of the previously ‘obtained customer identification data. ‘Wherever applicable, informaiion on the nature or business activity, location, mode of payments, volume ‘of tumover, social and financial status ec.. will be collected for completing the profile of the customer, (Customers will be classified into three risk categories namely high, medium and low risk catagories, based on the risk perception. The risk categorisation will be reviewed periodically. (Customer identification will be carried out in respect of non-account holders, approaching the bank for high value one-off transaction as well as any person or entity connected with a financial transaction, ‘which can pose significant reputational or other risks to the bank. ‘Banks should obtain sufficient identification data to verify the identity ofthe customer, his/her address! location and lso his/her recent photograph, while for legal personsentities, extra caution has been suggested. ‘An indicative lst of documents/information to verify the identi is given below, For individuals: Legal name and any other name used in anyone of the following: @) Passport, (ji) PAN Card, (ji) Voter identity card, iv) Driving licence, (x) Identity card (subject to the bank's satisfaction) and (vi) Letier from recognised public authority or public servant verifying the identity and residence of the customer to the satisfaction of the bank. For correct permanent address anyone of the following: Telephone bill, (i) Bank account statement, il) Letter from recognised public authority, (iy) Electricity bil, (¥) Ration card and (vi) Letier from employer (subject to the bank's satisfaction). address and other features suggestedFor companies: To verify the name of the Company: (Certificate of Incorporation and MOA & AOA — Principal place of business ~ Mailing address of the Company, (i) Resolution of the Board of Directors to open an account and identification of those wbo /have authority to operate the account. (ii) Power of attorney granted to its managers. officers oremployees to transact business on its behalf, (iv) PAN allotment leter ~ Telephone No/Fax No. and (v) Telephone Bill. For partnership firms: To verify legal name: (@ Registration Cenificate, if registered — Address, (i) Partnership Deed — Names of all partners and their addresses, (ii) Power of attomey granted to a partner or an employee of the fim to transact business on its behalf, (iv) Any officially valid document identifying the partners and the persons holding power of attorney and their addresses, telephone no. of the firm and () Telephone Bill. For trusts and foundations: Any one of the following is needed to verify the names of the trustees, settlers, beneficiaries and signatories: @ Certificate of registration, if registered, (i) Power of auorney granted to wansact business on its behalf ~ Names and addresses of the founder, the managervdireciors and the beaeficiaries, (il) Any officially valid document to identify the trustees, setlers, beneficiaries and those tolding power of attorney, founders/managers/directors and their addresses, iv) Resolution of the managing body of the foundation/association = Telephone/Fax No. and (v) Telephone Bill. Relaxation for small customers: Ifa person is unable to produce documents meationed, a relaxation is extended if: Monitoring of Transactions ‘Monitoring of transactions will be conducted taking into consideration the risk profile ofthe account. Special atiention will be paid 10 all complex, unusually large transactions and all unusual patterns, which have no appareet economic or visible Lawful purpose. Transactions that involve large amounts of cash, inconsistent with the normal and expected activity of the customer, will be subjected to detailed scrutiny. ‘After due diligence at the appropriate level in the bank, transactions of suspicious mature and/or any ther type of transaction notified under the PML Act, 2002 will be reported to the appropriate authority ‘and a record of such transactions will be preserved and maintained for a petiod as prescribed in the Act. ‘Risk Management: While the bank has adopted a risk-based approach to the implementation of this policy itis necessary to establish an appropriate framework covering proper management oversight, systems, controls and other related matters. “The bank’s internal audit of compliance with KYC/AML policy will provide an independent evaluation ‘ofthe same including legal and regulatory requirements. Concarrenvinternal auditors shall specifically ‘check and verify the application of KYC/AML procedures at the branches and comment on the lapses observed in this regard. The compliance in this regard will be placed before the audit committee of the board at quarterly intervals All employces’ training programmes will have a module on KYC StandardVAML Measures so that members of the staf are adequately tained in KYC/AML procedures, Principal Officer (Money Leundering Reporting Officer): The bank will designate a senior officer as Principal Offices, who shall be responsible for implementation of and compliance with this policy. ‘The illustrative duties will be as follows: (2) Monitoring the implementation of the bank’s KYC/AML Policy. Reporting of Transactions and ‘sharing of the information as required under the law. (>) Maintaining liaison with law enforcement agencies.