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Project

Banking And Portfolio

Topic

Know your customer

Presented to:
Ms.Shehla Sohail

Presented By:
• Bilal Amjad

• M. Nadeem
Table of Content

• Introduction
• Reason for its existence
• Prudential Regulations as prescribed by SBP
• Guidelines for different Accounts
• Guidelines to fill the KYC form
• Verification of KYC form
• How the form rejects
• KYC policies of HBL
• Conclusion
Know your customer
KYC Mean:
A standard form in the investment industry that ensures investment
advisors know detailed information about their clients' risk tolerance,
investment knowledge and financial position.

KYC forms protect both clients and investment advisors. Clients are
protected by having their investment advisor know what investments
best suit their personal situations. Investment advisors are protected
by knowing what they can and can not include in their client's portfolio.

Know your customer (KYC) is the due diligence and bank regulation
that financial institutions and other regulated companies must perform
to identify their clients and ascertain relevant information pertinent to
doing financial business with them. In the USA, KYC is typically a policy
implemented to conform to a customer identification program
mandated under the Bank Secrecy Act and USA PATRIOT Act. Know
your customer policies are becoming increasingly important globally to
prevent identity theft fraud, money laundering and terrorist financing.

Beyond name matching, a key aspect of KYC controls is to monitor


transactions of a customer against their recorded profile, history on the
customers account(s) and with peers.

Banks doing KYC monitoring for anti-money laundering (AML) and


checks relating to combating the financing of terrorism (CFT)
increasingly use specialised transaction monitoring software,
particularly names analysis software and trend monitoring software.
The generated alerts identify unusual activity which is then subject to
due diligence or enhanced due diligence (EDD) processes that use
internal and external sources of information on the subject, including
the internet. This helps to determine whether a transaction or activity
is suspicious and requires reporting to the authorities. In the US, it
would require Suspicious Activity Reporting (SAR) filing to Financial
Crimes Enforcement Network (FinCEN). In the UK, it would require a
report to Serious Organised Crime Agency (SOCA). In Canada KYC is
monitored and managed by the Financial Transactions and Reports
Analysis Centre of Canada also known as FINTRAC[1]

KYC has different connotations and the definition above is from an


AML/CFT perspective.
Know Your Customer processes are also employed by regular
companies of all sizes, for the purpose of ensuring their proposed
agents', consultants' or distributors' anti-bribery compliance. Banks,
insurers and export credit agencies are increasingly demanding that
customers provide detailed anti-corruption due diligence information,
to verify their probity and integrity.

Some specialist consultancies help multinational companies and SMEs


conduct Know Your Customer processes when entering new markets.

Enhanced due diligence

EDD has not been internationally defined. As a result financial


institutions are at risk of being held to differing standards dependent
upon their jurisdiction and regulatory environment. An article published
by Peter Warrack in the July 2006 edition of ACAMS suggests the
following:

“A rigorous and robust process of investigation over and above (KYC)


procedures, that seeks with reasonable assurance to verify and
validate the customer’s identity; understand and test the customer’s
profile, business and account activity; identify relevant adverse
information and risk assess the potential for money laundering and / or
terrorist financing to support actionable decisions to mitigate against
financial, regulatory and reputational risk and ensure regulatory
compliance.”

Rigorous and robust

Generally this means consistent, thorough and accurate. The process


must be documented and available for inspection by regulators.

The process must be SMART (Specific, Measurable, Achievable,


Realistic and Timebound),[2] scalable and proportionate to the risk and
resources.

An IT workflow system ensuring that the KYC process and procedures


are Defined, Repeatable and Measurable is recommended.

Over and above KYC procedures

EDD files rely upon initial client screening. This definition requires
revalidation of the customer’s identity – knowing the client’s identity,
not who they say they are. EDD processes should use a tiered
approach dependent upon the risk.
Crucial to the integrity of any EDD process is the reliability of
information and information sources, the type and quality of
information sources used, properly trained analysts who know where to
look for information, how to look and how to corroborate, interpret and
decide the results. Open source intelligence companies such as World
Compliance and C6, aggregate this information and compile it daily
into a comprehensive database.

Searching on Google, for example, means different things to different


people. Experience has shown poor returns from staff that believed
they were experienced, but in practice were not and consequently
failed to find relevant information.

Reasonable assurance

What is reasonable depends upon factors including jurisdiction, risk


and resources. For sanction matches it depends upon information
provided by regulators. In all cases the suggested standard is to the
civil standard of proof i.e. on the balance of probability.

KYC Process Capability Maturity Model

The KYC Maturity Model is based on the typical 5 levels of the standard
Capability Maturity Model. These levels are typically described as
Initial, Repeatable, Defined, Managed and Optimized and have very
strict meanings. The KYC maturity has however been somewhat
simplified, renamed and re-built as follows: Chaotic, Reactive,
Proactive, Service Managed and Value Managed.

Continuous due diligence

CDD refers to the monitoring of clients and their activities to see if the
client does not change markedly over time. In effect this combats the
possibility that an individual (or more often an organisation) that has
passed KYC is still who they say they are and doing what they said
they would do when they underwent KYC checks. For example a
corporate account set up honestly and openly by one person who
passes KYC checks could be passed years later to another person that
would not, without CDD the services provider would not know that the
new owner is present. KYC (CDD) policy would normally demand KYC
checks on the new owner regardless of the account history.
Laws by country
• India: RBI has introduced KYC guidelines for all banks first time
vide circular DBOD. No. AML.BC.18/ 14.01.001/2002-2003 dated
August 16 2002. Later vide circular no
DBOD.NO.AML.BC.58/14.01.001/2004-05 dated November 29
2004, RBI has directed that all banks shall ensure that they are
fully compliant with the provisions of this circular before
December 31 2005. The purpose was to prevent money
laundering, terrorist financing, theft and so on.
• South Africa: The Financial Intelligence Centre Act 38 of 2001
(FICA)
• USA: Pursuant to the USA Patriot Act of 2001, the Secretary of
the Treasury was required to finalize regulations before October
26 2002, so KYC is now mandatory for all US banks

PRUDENTIAL REGULATION XI: KNOW YOUR CUSTOMER (KYC)

In view of recent heightened global efforts to prevent the possible use


of the banking sector for money laundering, terrorist financing, transfer
of illegal/ill-gotten monies and as a conduit for white collar crime etc.,
the importance of ‘Know Your Customer (KYC)’/”customer due
diligence” has increased. In line with the international best practices,
the existing instructions issued vide PR XI need to be further
strengthened to reinforce the checks and controls already developed
by banks as also to ensure due diligence is done while starting
relationship with a new customer and maintaining and continuing
relationship with existing customers. Although, overall PRs are being
revised and will be issued shortly, the sensitivity and importance of the
subject (KYC) requires that revised PR XI be issued straightaway and
implemented immediately. This revised PR XI will be included in the
overall Prudential Regulations when the latter are issued. Accordingly
the existing PR XI is being substituted with following minimum
guidelines to be followed while opening /dealing with the accounts of
the customers. Banks are, however, free to obtain any further
information/documents as they deem fit, provided the same are
reasonable and applied across the board to all of their customers.

GUIDELINES
a) All reasonable efforts shall be made to determine true identity
of every prospective customer. The following minimum set of
documents must be obtained from various types of customers/
account holder(s).

S.No. Nature of Documents/papers to be obtained


Account
I 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.
II Partnership (i) Attested photocopies of identity cards of all partners.
(ii) Attested copy of “Partnership Deed” duly signed by all
partners of the firm.
(iii) 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.
(iv) Authority letter, in original, in favor of the person
authorized to operate on the account of the firm.
III Joint Stock Certified copies of:
companies (i) Resolution of Board of Directors for opening of
account specifying the person(s) authorized to operate the
company account.
(ii) Memorandum and Article of Association
(iii) Certificate of Incorporation.
(iv) Certificate of Commencement of Business.
(v) Attested photocopies of identity cards of all the
directors.
IV Clubs, (i) Certified copies of
Societies and (a) Certificate of Registration.
Associations (b) By-laws/Rules & Regulations.
(ii) Resolution of the Governing Body/Executive
Committee for opening of account authorizing the person(s)
to operate the account and attested copy of the identity card
of the authorized person(s).
(iii) An undertaking signed by all the authorized persons
on behalf of the institution mentioning that when any
change takes place in the persons authorized to operate on
the account, the banker will be informed immediately.
V Agents (i) Certified copy of “Power of Attorney”.
Accounts (ii) Attested photocopy of identity card of the agent.
VI Trust Account (i) Attested copy of Certificate of Registration.
(ii) Attested copies of NIC of all the trustees.
(iii) Certified copies of Instrument of Trust.
VII Executors and (i) Attested photocopy of identity cards of the
Administrators Executor/Administrator.
(ii) Certified copy of Letter of Administration or Probate.

b) The Banks shall obtain “Introduction” on the new account to assess


the prospective customer’s/account holder’s integrity, respectability
and the nature of business etc. Any laxity in this regard may result in
serious consequences for the banker. The following guidelines are to
be followed in this regard:
(i) Where the introducer is an existing account holder of
the same branch, his introduction should be accepted,
after due verification of signature by the official of the
branch. In case the introducer is an account holder of
another branch of the same bank, the account should only
be opened after proper verification of the signature from
the concerned branch.

(ii) Where the introducer happens to be an account


holder of another bank, the introduction should be
accepted after complete verification of the signature and
other particulars of the introducer from that bank.

(iii) The introduction by the employees of the bank may


also be acceptable. However, he or she will have to
establish that sufficient information has been collected on
the new account holder for making the introduction and
that they believe that “Introduction” from a person other
than the bank’s employee is not necessary.

c) The Bank/branch shall obtain satisfactory evidence duly


verified/authenticated by the branch manager and shall be placed on
record in respect of
(i) the true identity of the beneficial owners of all accounts opened by
a person, entity etc.
(ii) the real party in interest or controlling person/entity of the
account(s) in case of nominee or minors account.
d) The Banks are also advised that KYC/customer due diligence is not a
one time exercise to be conducted at the time of entering into a formal
relationship with customer/account holder. KYC/Customer due
diligence is an on-going process for prudent banking practices,
therefore the banks are encouraged to:-
(i) Set up a compliance unit with a full time Head.
(ii)Put in place a system to monitor the accounts and transactions on a
regular basis.
(iii)Update customer information and records, if any, at reasonable
intervals.
(iv Install an effective MIS to monitor the activity of the customers’
accounts.
(v) Chalk out plan of imparting suitable training to the staff of bank
periodically.
(vi) Maintain proper records of customer identifications and clearly
indicate, in writing, if any exception is made in fulfilling the due
diligence procedure.
(vii) Monitor and check unusually large cash transactions, especially
those which are out of character/ inconsistent with the history, pattern
etc of the individual account(s).
e) The banks shall develop guidelines for customer due diligence,
including a description of the types of customers that are likely to pose
a higher than average risk to a bank. In preparing such policies, factors
such as customers’ background, country of origin, public or high profile
position, nature of business etc should be considered. Enhanced due
diligence shall be applied:
(i) To high-risk customers such as those belonging to
countries where KYC and money laundering regulations are lax, those
with links to offshore tax havens, customers in cash based businesses
in high-value items, and high net worth customers with no clearly
identifiable source of income etc.

(ii) Where they have reason to believe that the


customer has been refused banking facilities by another
bank.
(iii) For opening of correspondent banks’ accounts, and
taking appropriate measures to obtain all relevant
information about the respondent bank.

(iv) In dealing with non-face-to- face/ on-line customers.


Adequate measures in this regard should also be in place,
e.g. independent verification by a reliable third party,
client report from the previous bank of the customer etc.

2) Each Bank shall formulate and keep in place, in writing, a


comprehensive Know-Your-Customer policy duly approved by their
Board of Directors and in case of branches of foreign banks, approved
by their head office, and cascade the same down the line to each and
every branch/office/ concerned officers for strict compliance.

3) State Bank of Pakistan, during the course of inspection, would


particularly check the efficacy of the KYC system put in place by the
banks and its compliance by all the branches and the staff. Appropriate
action shall be taken against the bank and the concerned staff
members for non-compliance and negligence in this area under the
provisions of Banking Companies Ordinance 1962

Guidelines for Documents Required For Various Categories

Important points:

1. Copies of all documents submitted by applicants should be self-


attested.

2. The copies of all documents should be accompanies by original for


verification by POS.
3. In case the original of any document is not produced for verification
then the copies should be properly attested by entities authorized to
attest the copy as per the list of persons authorized for attestation.

4. In case of NRIs, a Consular Officer or an authorized official of


overseas branches of scheduled commercials banks registered in India
can attest the documents.

5. Further, if any proof of identity or address is in a foreign language,


then translation in to English is required.

Proof of Identity: - Self attested copy of PAN card is mandatory.

Permanent Account Number (PAN) for all investment in Mutual Fund is


mandatory. To comply with the same PAN has been made mandatory
for all categories of investors.

PAN field in the application form is a mandatory field. The POS should
ensure that PAN field in the application form is not left blank by the
investor and the name on the PAN card copy should tally with that
mentioned on the KAF.

Proof of Address: - List of documents admissible as Proof of Address:

1. Passport

2. Voters Identity Card

3. Ration Card

4. Registered Lease/ Sale Agreement Of Residence

5. Driving License
(Documents having an expiry date should be valid on the date of
submission)

Mandatory self certified true documents to be submitted.

1. Certificate of Incorporation

2. Memorandum & Articles of Association

3. Authorized signatories list with specimen signatures

4. Board resolution for investment in Mutual Fund

Partnership Firm: -

Mandatory certified documents to be submitted.

1. Certificate Of Registration (for registered partnership firms only)

2. Partnership Deed

3. Authorized signatories list with specimen signatures

Trusts: -

Mandatory certified documents to be submitted.

1. Certificate of registration (for registered trusts)

2. Trust deed

3. Authorized signatories list with specimen signatures

Unincorporated association or a body of individuals: -

Mandatory certified documents to be submitted.


1. Proof of Existence/Constitution document {Resolution of the
managing body & Power of Attorney granted to transact business on its
behalf are mentioned currently)

2. Authorized signatories list with specimen signatures

Banks/Institutional Investors:

Mandatory certified documents to be submitted.

1. Copy of constitution/registration documents.

2. List of authorized signatories.

Foreign Institutional Investors: -

Mandatory certified documents to be submitted.

1. Certificate of registration with SEBI.

2. Authorized signatories list with specimen signatures.

Army / Government Bodies: -

Mandatory certified documents to be submitted.

1. List of authorized signatories.

2. Self-certification on letterhead. (It was copy of constitution/


registration documents earlier)

GUIDELINES TO FILL UP KYC FORM

The KYC Application Form (KAF) or Change Request Form (CRF) should
be filled as per instructions – i.e. in legible block letters with each letter
in appropriate box provided in blue or black ink only (preferably in
black ink).

1. Applicant has to fill in all the required information as per the KAF
Instructions.

2. There should not be overwriting in the KAF. Any overwriting in the


application form is counter signed by the applicant.

3. In case any information is struck off, then the applicant has to sign
the same and the signature matches with the signature in the
signature block.

4. PAN field is not to be left blank and copy of PAN card copy should be
submitted.

5. If the applicant name as mentioned on the KAF does not match with
the PAN card name then additional document for proof of identity
should also be provided.

6. Applicant has to submit Proof of Identity & Proof of Address as per


list of admissible documents –list mentioned in this document and also
available on the KAF / CRF. In case of change in name by the applicant,
POI for the new name should be submitted and POA would be required
if the applicant wishes to change any of the addresses.

7. Copies of all documents submitted should be legible and signed by


the applicant.

8. There is no prima facie evidence to suspect tampering with the


original documents or the copies submitted by applicant.

9. When the applicant does not submit the original document for
verification, the copies should be properly attested by entities
authorized to attest the copy as per the list of persons authorized for
attestation. In such case, the attested copy submitted should be
original. Photocopy of attested document would not be acceptable as
Proof.

NOTE: List Of Entities Authorized To Attest The Documents.

10. When the Present Address is other than the Current /


correspondence address, proof is required for both the addresses. In
case the applicant has written the same address at both the places
instead of writing “SAME AS ABOVE’, only one proof for the address
provided would be sufficient. The address proof should not be more
than three month old.

11. When documents like Passport, Driving License carrying an expiry


date is submitted as proof of address; the document must be current
on the date of acceptance.

12. Affix most recent colour photograph of size 30mm * 40mm &
applicant has to sign across the photograph.

13. Applicant should sign the KAF in the specific space provided for.
Authorised person in case of non-individual case should sign the KAF
with proper stamp.

Guidelines for Verification of KYC Application Form:

A: IDENTITY DETAILS:

Individual:

1. Name – The name in the application form should match with the
name mentioned in the PAN card.
2. Father’s Name – Father’s name should be provided for married
women also.

3. Date of Birth – DOB should be provided in dd/mm/yyyy format only.


Also, as minors are not allowed to apply for KYC, it should be checked
that the applicant age is not less than 18 years.

4. Nationality – Nationality should be provided in the space provided.

Foreign nationals are not allowed to apply, unless they are Non-
Resident Indian (NRI) or Person of Indian Origin (PIO). In such cases
appropriate proof must be obtain.

5. Status – The status of individual can be either Resident Indian (RI) or


Non Resident Indian (NRI). PAN will be mandatory document for all
status of individuals (NRIs also need to submit PAN no. along with the
proof of PAN document & copy of passport & details of overseas
address & proof for the same.)

6. Permanent Account Number (PAN) – As per the regulatory guidelines


quoting Permanent Account Number (PAN) for all investments in
Mutual Fund is mandatory. To comply with the same PAN has been
made mandatory for all categories of investors.

PAN field in the application form is a mandatory field. The POS should
ensure that PAN field in the application form is not left blank by the
investor and the name on the PAN card copy should tally with that
mentioned on the KAF If there is a major mismatch in the name
appearing in the PAN card and name mentioned in the KAF then the
investor should submit one additional document as proof of identity
from the permissible list of document for proof of identity.

GENERAL:
1. The applicant should not be a minor (less than 18 years).

2. Name in KAF should exactly match with the name mentioned in the
proof of identity.

3. All the mandatory fields are filled by the applicant.

4. In case of PAN, Passport, Voter ID card or UIN provided as proof of


identity or address, the document number is to be mentioned in the
space provided.

B: ADDRESS DETAILS:

Guidelines for verification of Proof of Address (POA):

• Self attested copy of Proof of Address should be verified with the


original. If original copy of documents has not been submitted for
verification then Notarized/ True copy of the same should be submitted
in original & not the photocopy/is.

• The proof of address should be on A4 paper size only and one-sided


copy.

• If correspondence & permanent address are different then proof for


the both are required.

• Take care to obtain all the relevant pages of POA where name &
address are appearing on separate pages.

List of documents admissible as a Proof of Address:

a. Passport

b. Voter Identity Card


c. Ration Card

d. Registered Lease/ Sale Agreement of Residence

e. Driving License

f. Continuous Discharge Certificate (CDC)

g. Telephone Bill (Not Mobile Bill)

h. Electricity bill

i. Bank Passbook

j. Bank Account Statement

Note:

1. Document submitted proof submitted should not have is not in the


name expired on the day of applicant then submission at POS i.e.
additional document it should not be more supporting the than 6
months old or relationship with the documents having an addressee
should be expiry date should be submitted such as valid on the date of
marriage certificate, submission. gazetted copy of name

C: OTHER DETAILS:

1. Annual Income – The client has tick the appropriate income slab
from the list provided in the KAF. Only one of the options must be
ticked.
2. Occupation – The client has tick any one of the options provided in
KAF as his/her primary occupation. Only one of the options must be
ticked.

3. Signature – Signature has to be provided within the space specified


in the application form.

Black Ink should be preferred for signing the application form.

4. Photograph – One recent colour photograph (30mm*40mm) should


be pasted (not stapled) at the specified region in the application form.
The applicant has sign across the photograph and the signature should
match with the signature on the application form. The photograph
matches with photograph on Proof of Identity document provided by
the investor.

Non-Individuals:

A: IDENTITY DETAILS:

1. Name - Name should match with the name mentioned in the


document for Proof of Identity submitted.

2. Date of Registration/ Incorporation – The date of registration/


incorporation should match with the date mentioned in the
Memorandum and Article of Association.

3. Status – The best applicable choice should be selected from the list
provided in the application form.

B: IDENTITY DETAILS

1. Present and Permanent Address – Present address will be used for


all correspondence. Permanent address for FII should be overseas
address. Address proofs for both present and permanent address
should be provided and it should be verified with the original.

2. Authorized Signatures – The persons signing KAF should be one of


the persons authorized by the Board Resolution to open an account for
investment in mutual funds.

C: OTHER DETAILS:

1. Gross Annual Income - The client should tick the appropriate income
slab from the list provided in the KAF. Only one of the options must be
ticked.

2. Mandatory Certified Documents – All the mandatory documents


referred under the respective category should be obtained with duly
certified.

Guidelines for verification of Proof of Documents submitted

• Self attested copy of Proof of Identity should be verified with the


original.

• Attested copies by competent authority should be accepted in


original only.

• The name in the KAF should match with the name in proof of identity.
If there is mismatch in the name on POI & KAF, then additional proof of
identity should be submitted.

• The appropriate box should be ticked in the application form for proof
of identity.

• In case of PAN, Passport, Voter ID Card or UIN the applicant must


write the document number in the space provided in the KAF. POS
should carefully capture this number in the software at the time of
data entry.

• POS should check for any proof of tampering with the copy of the
document.

• After the POS completes verification they should stamp the copy of
proof of identity with “Original of <name of Document> verified” along
with signature & name of the verifying official. The name of the
document i.e. ration card, driving license etc. should be clearly
mentioned on the stamp.

• For documents produced in vernacular, the POS should verify the


contents of the document with the details provided in the application
form and stamp it with “Original of <name of Document> & contents
of the same verified”. The name of the document i.e. ration card,
driving license etc. should be clearly mentioned on the stamp.

KYC application is liable to reject if any one of the copy submitted is


not clear or legible.

When the POS should reject KYC application form (KAF)

1. Any of the mandatory fields are left blank in the KYC Application
Form (KAF).

2. The age of the applicant is less than 18 years i.e. if a minor has
applied for KYC.

3. Permanent Account Number (PAN) is not provided in the application


form, except for PAN exempt category.

4. POI and POA and any constitution documents for Non-Individuals not
submitted.
5. If the name in PAN card does not match with the name in KYC
application form and if not accompanied with a Marriage certificate OR
Gazette notification. POS to ensure that the name in the marriage
certificate and Gazette notification matches with the application form.

8. Any evidence of tampering with the original document for proof


copies submitted.

9. If the copy of supporting documents are not legible.

10. If the photo has not been affixed & the applicant have not signed
across the photo.

11. Passport copy not submitted in case of NRI.

12. Details in the application form do not match with the document/s
submitted.

13. Respective form, Individual or Non-Individual, according to


investor’s category, is not used.

14. If application is not signed by the applicant.

HABIB BANK LIMITED

KYC POLICY & PROCEDURES For Prevention of Money


Laundering

It is a Policy of the Bank that:

Prior to establishing a relationship with new customer obtain basic


information i.e. business, source of income, expected level of activity
in the account and reasons for opening the account.

• Prior to establishing relationships with correspondent banks or


agents, appropriate steps must be taken to confirm the identity,
integrity and due diligence procedures of those representatives
or agents and, where necessary, the identities of underlying
clients.
• The underlying beneficial ownership of all companies and other
legal entities with which the bank conducts business must be
established, including the beneficial ownership of all funds or
other properties that are handled by the Bank.
• Customer’s Information Profile (CIP) must be updated on a
regular basis as appropriate and customer activity must be
monitored against a pre-determined profile, paying special
attention to higher risk customers or activities.

2.3 AML/ KYC ASSOCIATED POLICIES


Following associated policies form an integral part of the AML/ KYC
Policy and have been developed specifically to achieve the objectives
outlined in the AML/ KYC Policy and the regulatory requirements of the
State Bank of Pakistan

Internal controls and communication

It is a Policy of the Bank:

• To institute controls which comply fully with all applicable anti-


money laundering laws and regulations.
• To conduct risk assessment and develop risk profiles of the
Bank’s products, services and customers and to apply
appropriate policies and procedures to manage such risks.
Undertaking enhanced due diligence for ‘High Risk’ products,
services and customers.
• To communicate Bank’s policies to management and staff and
provide them with written procedures and control requirements
to ensure ongoing compliance with

Recognition and reporting of suspicion Recognition and


reporting of suspicion

It is a Policy of the Bank:

• To establish and follow procedures that requires employees to


refer promptly any suspicious activity to GCG or respective
country MLRO who will review the transaction to determine
whether a report should be filed with the Regulators.
• To be alert to unusual or suspicious transactions or other
activities that appear not to make good business or investment
sense, or activities that appear to be inconsistent with the
counterparty or customer’s expected activity, including activities
that may be indicative of criminal conduct, terrorism or
corruption.
• To act competently and honestly when assessing information
and circumstances that might give reasonable grounds to
suspect ML or TF.
• To provide GCG or respective country MLRO (at request) access
to all customers, correspondents or counterparties information
within the Bank.
• To co-operate fully with law enforcement authorities in
investigations concerning possible ML or TF within the confines of
applicable laws, and in consultation with GCG or respective
country MLRO.
• Not to alert or provide any information to any person suspected
of illegal activity regarding suspicion or inquiry on his or her
account or transactional activities or any indication of being
reported to Regulators.

Awareness raising and training

It is a Policy of the Bank:

• To make all management and staff aware of what is expected of


them to prevent moneylaundering or terrorist financing and to
advise them of the consequences for them and for the Bank if
they fall short of that expectation.
• To provide initial and annual update training for all appropriate
personnel, including all personnel who set up and manage
customer account opening or transactions,correspondent
relationships, and/or are involved in trade finance activity.
• That management and staff will be required to sign a
memorandum confirming they have read and understood the
Bank’s AML/KYC policies and procedures. Format attached
Record keeping

It is a Policy of the Bank:

• To retain identification and transaction documentation for the


minimum period required by applicable Laws and Regulations.
• To retain records of all reports made by staff to GCG or
respective country MLRO and all suspicious activity reports made
by MLRO to Regulators for an indefinite period unless advised by
the Regulator otherwise.
• To be in a position to retrieve, in a timely fashion, records that
are required by law enforcement agencies as part of their
investigations.
• To keep records of dates when anti-money laundering training
was given, the nature of the training and the names of staff who
received such training.

ACCOUNTABILITIES AND RESPONSIBILITIES


The Board is Responsible for:

• Ensuring that adequate systems and controls are in place to


deter and recognize criminal activity, money laundering and
terrorist financing.
• Seeking annual money laundering compliance reports from the
CCO and taking necessary decisions required to protect the bank
from use by criminals for ML & TF.
• Ensuring that GCG and respective country MLRO is provided
with adequate resources to carryout their duties effectively.

Management is Responsible for:

• Day-to-day compliance with anti-money laundering and terrorist


financing obligations within the areas of the Bank.
• Ensuring that GCG and respective country MLRO is promptly
advised where there are reasonable grounds to know or suspect
that transactions or instructions are linked to criminal conduct,
money laundering or terrorist financing.
• Ensuring that GCG and respective country MLRO is provided with
all relevant information to enable a complete assessment of
underlying transaction for suspicion.

All Employees are Responsible for:

• Remaining vigilant to the possibility of money laundering through


use of bank’s products and services.
• Complying fully with all anti-money laundering policies and
procedures in respect of customer identification, account
monitoring, record keeping and reporting.
• Promptly reporting to GCG or respective country MLRO where
they have knowledge or grounds to suspect a criminal activity or
where they have suspicion of money laundering or terrorist
financing.
• Ensuring that the customer is not disclosed any information
related to inquiry or filing of a suspicious activity report.
• Understanding Bank’s Policy and Procedures on AML/ KYC and to
sign-off on the required Form.
Employees who violate any of the Regulations or the Bank’s AML/ KYC
policy and procedures will be subject to disciplinary action.