1 KYC(KNOW YOUR CUSTOMER) INFORMATION FOR CUSTOMERS INTENDING TO OPEN BANK ACCOUNTS WITH US The Reserve Bank of India

(RBI) has advised banks to follow a 'KYC guidelines', wherein certain personal information of the account-opening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers. This is also in the interest of customers to safeguard their hard earned money. The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are 1. Photograph 2. Proof of identity 3. Proof of address Accordingly, Axis Bank has framed its KYC procedure according to which, a photograph and documentary proof of personal identification and address proof are required to be provided. Our KYC procedure specifies certain commonly available documents as proof of personal identification and address proof, so as to not cause inconvenience to those intending to open bank accounts in our Bank. The Account Opening Form provides the nature of documents required / procedure to be followed for opening a new account. You may also log in to our website www.axisbank.com for such information which is displayed product-wise. Our Branch officials at the Account Opening Desk / Sales Team will also be able to provide guidance regarding the different types of documents acceptable for opening any new account. We request your kind co-operation in providing the required documents for opening new accounts to enable us to adhere to the KYC policy.

KNOW YOUR CUSTOMER WHAT YOU MUST KNOW What is KYC? Know Your Customer - KYC enables banks to know/ understand their customers and their financial dealings to be able to serve them better Who is a customer of the Bank? For the purpose of KYC Policy, a Customer is defined as: A person or entity that maintains an account and/or has a business relationship with the Bank; One on whose behalf the account is maintained (i.e. the beneficial owner);2 Beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors, etc. as permitted under the law, and Any person or entity connected with a financial transaction, which can pose significant reputation or other risks to the Bank, say, a wire transfer or issue of a high value demand draft as a single transaction. Why does the Bank ask you for proof of your identity and address? The identification of a customer is a very critical process with a view to protect the customer interests by preventing from fraudsters who may use the name, address and forge signature to undertake benami / illegal business activities, encashment of stolen drafts, cheques, dividend warrants, etc. This also helps to safeguard banks from unwittingly used for the transfer of deposit of funds derived from criminal activity or for financing terrorism. Identification of customers will also help to control financial fraunds, identify money laundering and suspicious activities, and for scrutiny / monitoring of large value cash transactions. Are KYC requirements new? No, KYC requirements have always been in place and Banks have been taking KYC documents in accordance with the guidelines issued by RBI from time to time. RBI has

revisited the KYC guidelines in the context of recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering standards and on Combating Financing of Terrorism and enhanced the KYC standards in line with international benchmarks Is KYC mandatory? Yes. It is a regulatory and legal requirement. Regulatory: In terms of the guidelines issued by the Reserve Bank of India (RBI) on November 29, 2004 on Know Your Customer [KYC] Standards Anti Money Laundering [AML] Measures, all banks are required to put in place a comprehensive policy framework covering KYC Standards and AML Measures. Legal: The Prevention of Money Laundering Act, 2002 (PMLA) which came into force from July 1, 2005 (after rules under the Act were formulated and published in the Official Gazette) also requires Banks, Financial Institutions and Intermediaries to ensure that they follow certain minimum standards of KYC and AML as laid down in the Act and the rules framed there under When does KYC apply? KYC will be carried out at the following stages: Opening a new account Opening a subsequent account where documents as per current KYC standards not been submitted while opening the initial account Opening a Locker Facility where these documents are not available with the bank for all the Locker facility holders 3 When the bank feels it necessary to obtain additional information from existing customers based on conduct of the account When there are changes to signatories, mandate holders, beneficial owners etc KYC will also be carried out in respect of non-account holders approaching the bank for high value one-off transactions.

Who is your contact point in the Bank for KYC purposes? Your contact point in the Bank will be the Relationship Manager / the official who opens your account and who is in touch with you for your transactions. What is Money Laundering? Money Laundering refers to conversion of money illegally obtained to make it appear as if it originated from a legitimate source. Money laundering is being employed by launderers worldwide to conceal criminal activity associated with it suahc as drugs / arms trafficking, terrorism and extortion. All crimes that produce a financial benefit give rise to money laundering. What has this got to do with opening bank accounts? The first step in the laundering process for criminals is to get their money into an account with a Bank, often using a false identity and address. The funds so deposited will be transferred to other accounts locally or abroad or used for buying goods or services. These transactions would appear to be like any legally earned money and becomes difficult to trace it back to its criminal past. Banks under law should not only prevent this, but should stop criminals who wish to use the banking channel to launder the ill-gotten money from illegal / criminal activities. How could this affect you as a customer? A key defense against money laundering is to prevent accounts being opened in false identities. Anyone wishing to open an account will therefore be asked for proof of their identity and address. These documents have to be essentially obtained irrespective of the type of account to be opened and the purpose for which the account is opened for. The fact that these documents are asked for opening of account does not mean that you are suspected of money laundering. Criminals try to appear to be normal lawabiding customers, for example they may try to open a number of accounts using small amounts of money. Hence it is necessary to identify all prospective account holders or customers. Any body including a criminal could falsely use your identity, if these identity

documents are not obtained. What proof of identity will you need? The best identification documents are those, which are issued by a Government authority, which should have a photograph, address and signature. For an individual documents like copy of the Passport, Election Identity Card, Permanent Account Number (PAN) card, etc. would be sufficient for the purpose of establishing the identity 4 of a customer. This has to be submitted along with a document to establish the address of the customer. You may approach the nearest branch of the Bank for the list of acceptable documents to be submitted for proof of identity and address. Similarly, for other entities like firms, companies, trusts, etc., documents like Partnership Deed, Trust Deed, Memorandum & Articles of Association, Certificate of Incorporation, Registration and Service Tax, License under Shops and Establishment Act, etc. would be applicable and the branch / sales staff / call center would be able to help you in providing the details of the list of approved documents. What will happen if you do not provide the required KYC information / documents to the Bank? The Bank will be entitled to refuse to open the account (if you are a prospective customer) or discontinue its relationship with you citing non-providing of KYC information / documents (if you are an existing customer). If you however, require reasonable time to furnish certain non-critical documents you can approach the branch / sales staff. If you are a small depositor, would you still have to go through the stringent KYC requirements? While the internal procedures of the Bank and the guidelines of RBI require that satisfactory proof of your identity and address, RBI has simplified the KYC procedure with the objective of greater financial inclusion, i.e. making available the basic banking facilities to those persons who intend to keep balances not exceeding Rupees Fifty Thousand (Rs. 50,000/-) in all their accounts taken together and the total credit in all the

accounts taken together is not expected to exceed Rupees One Lakh (Rs.1,00,000/ in a -) year. Help us to Help You Please help us to prevent crime, tax evasion and the laundering of the proceeds of such crime or evasion by being patient when staff asks you to provide documents to prove your identity. You can also help prevent crime against yourself and others by maintaining the confidentiality of your account details and identity documents. Indian Regulations on Prevention of Money Laundering A customer must know Under the Prevention of Money Laundering Act (PMLA) 2002, and the Rules thereof, the banks are required to report: a) All cash transactions (deposits and withdrawals) of the value of more than Rupees Ten Lakhs or equivalent thereof in foreign currency; b) All series of cash transactions integrally connected to each other, which have been valued below Rupees Ten Lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds Rupees Ten Lakhs.5 c) All cash transactions where forged or counterfeit currency notes or Bank notes have been used as genuine and where any forgery of a valuable security has taken place; d) All suspicious transactions whether or note made in cash and by way of as mentioned in the Rules. Under regulatory instructions issued by the Reserve Bank of India in consultation with the Government of India and Indian Bank s Association a) Demand drafts, mail transfers and travelers cheques for Rs. 50,000/- and above can be issued by banks only by debit to the customer s account or against cheque or other instrument tendered by the purchaser and not against cash

payment; b) Demand drafts, mail transfers and travelers cheques for Rs. 50,000/- and above can be poaid by banks only by credit to the customer s account or through other banking channels and not in cash. *************

GIST OF KYC NORMS

1 Gist of Know Your Customer[KYC] Norms 1. Objectives of KYC Norms 1.1 Banking operations are susceptible to the risks of money laundering and terrorist financing. In order to arrest money laundering, where banks are mostly used in the process, it is imperative that they know their customers well. 1.2 On combating financing of terrorism, RBI has specified certain standards based on which our Bank has formulated a policy on identification and acceptance of customers to have a business relationship with us. Our branches are required to prepare and maintain documentation on their customer relationships and transactions to meet the provisions of the Prevention of Money Laundering Act and other laws and regulations. 1.3 RBI has issued the KYC guidelines under Section 35 (A) of the Banking Regulation Act, 1949 and any contravention of the same will attract penalties under the relevant provisions of the Act. Thus, the Bank has to be fully compliant with the provisions of the KYC procedures. 1.4 The due diligence expected under KYC involves going into the purpose and reasons for opening an account, anticipated turnover in the account, sources of wealth (net worth) of the person opening the account and sources of funds flowing into the account. 2. Customer Acceptance

2.1 Before commencing a business relationship with a prospective customer, the Bank has to ensure that such a relationship does not, in any way, go against its Customer Acceptance principles viz., i. No account is opened in anonymous or fictitious/ benami name(s) and ii. Customers are categorised based on risk perceptions in terms of the nature of business activity, location of customer and his clients, mode of payments, volume of turnover, social and financial status, etc. 2.2 A Customer Profile (in the prescribed format) containing information relating to the customer's social/ financial status, nature of business activity, information about his clients' business and their location, Sources of funds, Annual Income, etc. shall be obtained from/prepared for all the applicants for opening SB/CA/ Term deposits accounts. 2.3 The customer profile shall be updated, on a periodical basis, as under: For low risk customers Once in three years For medium risk customers Every year For high risk customers Every year Note: However, these periodicities are only indicative and wherever warranted, the updation exercise may be done even at lesser frequencies taking into account the activities, conduct of operations, etc. 3. Customer identification 3.1 Customer identification means identifying the customer and verifying his/her/its identity by using reliable, independent source documents, data or information. 3.2 Customer Identification is carried out at different stages i.e., while establishing a banking relationship, carrying out a financial transaction or when the branch has a doubt about the authenticity/veracity or the adequacy of the previously obtained customer identification data. 2 3.3 For opening an account, normally, the customer should come to the Bank in person. An account shall not, normally, be opened without a meeting between the bank official and the customer.

3.4 Branches need to obtain sufficient information to their satisfaction, to establish the identity of each new customer, whether regular or occasional and the purpose of the intended nature of banking relationship. 3.5 The process of enquiry/verification of the documents shall be a thorough one by having a dialogue with the prospective depositor, introducer, borrower and guarantor and confirmation through other channels, if necessary. Wherever it is necessary, a discreet verification shall also be made about the credentials of the parties, their business potential etc. 3.6 The process of verifying a customer's identity and his/her credentials is not a faultfinding exercise but to create a better customer relationship that may safeguard the mutual interests of the Bank as well as the customer. 4. Identification Documents to be submitted by customers for opening of accounts 4.1 Branches shall ask for documents to verify a. the identity of the customer, his/her address, location and b. his/her recent photograph. 4.2 For accounts of Individuals under Low Risk Category, the following documents are accepted: a. Passport alone where the address on the passport is the same as the address on the account opening form (OR)

b. Any one document (latest/recent) from each of the lists given below, for a photo identity and a proof of residence/address Towards Name proof Photo Identification Towards address proof 1. Passport where the address differs 1. Telephone Bill 2. Voter s Identity Card 2. Bank account statement 3. PAN Card 3. Income/Wealth tax assessment order 4. Driving Licence 4. Credit Card Statement 5. Govt. /Defence ID card * 5. Electricity Bill 6. ID cards of reputed employers * 6. Ration Card

7. Letter from a recognised public authority or public servant verifying the identity and residence of the customer* 7. Letter from employer*

* Subject to the satisfaction of the officer authorising the opening of the account Note: Original should be produced for verification and copy, duly attested by the verifying official, shall be kept along with the account opening form. 4.3 In case of joint accounts, applicants are required to independently establish their identity and address. 4.4 `Care of .' or incomplete address should not be accepted.

4.5 In respect of Medium/High risk customers, besides the normal documents prescribed above for low risk customers, branches shall call for additional information and documentary evidence as under: 3 Type of Customers/accounts Additional Information/Documents i. For opening Non-Resident accounts Introduction in the form of passport and/or by another bank/Indian Embassy/ Notary Public/ Person known to the account opening branch. ii. For opening accounts of other than NRIs under Medium and High Risk categories iii. For current accounts in all risk categories iv. For accounts of other than individuals in all risk Introduction by an existing account holder or by a person known to the Bank 4.6 For customers who are legal persons or entities (i.e., other than individuals), branches shall verify the legal status of the legal person/entity through proper and relevant documents a. verify that any person(s) purporting to act on behalf of the legal person/entity is duly authorised and such person(s) is/are properly identified by calling for documents (as listed above for individual low risk customers)

and verify the identity of that person(s) b. understand the ownership and control structure of the customer and determine those natural persons who ultimately control the legal person. 5. Quoting of PAN 5.1 As per clause (C) of rule 114B of the Income Tax Rules 1962, it is mandatory for the customers to quote the PAN (Permanent Account Number) or GIR (General Index Register) Number, in the account opening forms pertaining to Term deposits exceeding Rs.50,000 and for opening an account of all other types. 5.2 In case PAN or GIR Number has not been allotted or the person is not an Income Tax assessee, a declaration in Form No.60 or 61, as the case may be, should be given to the Bank. 6. Furnishing of Photographs 6.1 While tendering applications for opening SB/Current accounts in the names of Individuals/Sole Proprietary concerns, two copies of latest passport size photographs should be furnished. 6.2 In case of joint accounts, Accounts of Partnerships, Limited Companies, Clubs, Associations, Societies, Trust, Institutions, etc. the photographs of person(s)/official(s) who are authorised to operate the account and in case of HUF, the photograph of the Karta should be provided. 6.3 In case of Term Deposits, one copy of photograph shall be obtained provided the depositor does not have a Savings or Current account with the branch. 6.4 The above provisions cover all categories of depositors including non-residents. 7. Introduction of accounts to the Bank 7.1 It is essential that the introducer should know fully well the prospective account holder whom he/she is introducing for a sufficiently long time. The introducer should be in a position to identify or be able to give more particulars about the

account holder from his personal knowledge, when there arises any occasion at a later date. 7.2 A dialogue or enquiry with the introducer is had so that he/she could be informed of his responsibility and the implications of introducing an account. 4 7.3 In respect of accounts introduced by employees of other branches or where the introducer was not present while introducing the customer at the time of opening the account, no cheque/draft shall be collected till a confirmation of being introduced the account is received. 8. Rejection of applications for opening accounts 8.1 Where the Bank is unable to apply appropriate customer due diligence measures i.e. unable to verify the identity and/or obtain documents required as per the risk categorisation due to non-cooperation of the customer or the data/information furnished to the bank is not reliable, it may take a decision not to open the account. 9. Relaxed KYC Procedure 9.1 Relaxed KYC procedure refers to acceptance of an introduction in lieu of full KYC procedure subject to certain conditions prescribed. 9.2 This relaxation is applicable for Low Income Group customers, individuals falling under the 'No frill' category, persons affected by natural calamities like floods, cyclone, tsunami, etc. 9.3 Low Income group customers are those who keep balances not exceeding Rs.50000/ in all their accounts (FDR/CA/SB) taken together and the total credit summation in all the accounts taken together is not expected to exceed Rupees One Lakh (Rs.100000/-) in a year. 9.4 For these customers, branches are permitted to open accounts subject to the following conditions: i. An introduction (in lieu of the KYC documents) from another account holder who has been subjected to full

KYC procedure should be given. ii. The introducer's account with the Bank should be at least six month's old and should show satisfactory transactions. iii. The photograph of the customer who proposes to open the account and his address need to be certified by the introducer. 9.5 When, at any point of time, the total balance in all his/her accounts (FDR/SB/CA) with the Bank taken together exceeds Rupees Fifty thousands (Rs.50000/-) or total credit summation in all the accounts exceeds Rupees one lakh (Rs.100000/-) in a year, no further transactions will be permitted until the full KYC procedure is completed. 10. KYC norms for Remittances within India 10.1 Issue and payment of travellers cheques, demand drafts, mail transfers, telegraphic transfers, electronic funds transfers and other remittances of Rs.50,000 and above could be made only by debit/credit to customers' accounts or against cheques and not against cash. 10.2 Further, the applicants (whether customers or not) for the above transactions for amount of Rs.50,000 and above should furnish PAN (Permanent Account Number allotted by Income Tax Authorities) on the applications. 11. Closure of accounts on account of non-cooperation from the customer 11.1.1 If the Bank is not able to adhere to the KYC norms in a particular account due to non cooperation by the customer or non-reliability of the data/ information furnished to the Bank, it may close the account, after giving due notice to the customer explaining the reasons for such a decision.