New Delhi, October 22
The Government has made it mandatory
for banks and financial institutions to check the original identification
documents of individuals dealing in cash above the prescribed threshold, to
weed out the use of forged or fake copies.
The Department of Revenue in the
Finance Ministry has issued a gazette notification making an amendment to the
Prevention of Money-laundering (Maintenance of Records) Rules.
The new rule now requires the
reporting entity to compare “the copy of officially valid (identification)
document so produced by the client with the original and recording the same on
the copy”.
The Prevention of Money Laundering
Act (PMLA) forms the core of the legal framework put in place by India to
combat money laundering and generation of black money.
The PMLA and its rules impose obligation
on reporting entities like banks, financial institutions and intermediaries to
verify identity of clients, maintain records and furnish information to
Financial Intelligence Unit of India (FIU-IND).
As per Rule 9, every reporting
entity shall at the time of commencement of an account-based relationship,
identify its clients, verify their identity and obtain information on the
purpose and intended nature of the business relationship.
Intermediaries like stock broker,
chit fund company, cooperative bank, housing finance institution and
non-banking finance companies are also classified as reporting entities.
Biometric identification number
Aadhaar and other official documents are required to be obtained by the
reporting entities from anyone opening a bank account as well as for any
financial transaction of Rs 50,000 and above.
The same is also required for all
cash dealing of more than Rs 10 lakh or its equivalent in foreign currency,
cash transactions where forged or counterfeit currency notes have been used and
all suspicious transactions.
All cross-border wire transfers of
more than Rs 5 lakh in foreign currency and purchase and sale of immovable
property valued at Rs 50 lakh or more also fall under this category, according
to the reporting rules.
The Gazette notification said in
case the officially valid document furnished did not contain updated address, a
utility bill like electricity, telephone, post-paid mobile phone, piped gas or
water bill which is not more than two months old could be considered as a proof
of address.
Also,
property or municipal tax receipt, pension or family pension payment orders
issued to retired employees by Government departments, or letter of allotment
of accommodation from employer can be considered for the same purpose. PTI
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