RBI has introduced a standard KYC - Know your customer to identify their customers. This is to know about the credit and withdrawal of amount in their account. objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.
Thu Aug 09, 2012 6:26 am
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To understand this further, these are the things that KYC controls:
1. Collection and analysis of basic identity information (CIP)
Name matching against lists of known parties (such as politically exposed person)
2. Determination of the customer's risk in terms of propensity to commit money laundering or identity theft
3. Creation of an expectation of a customer's transactional behavior
Monitoring of a customer's transactions against their expected behavior and recorded profile as well as that of the customer's peers.