Provisions under

Anti Money Laundering

Act

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PTC,Mysuru

What is Money Laundering?....

The efforts for legitimizing the illegal money is known as
money laundering .
Sources of illegal money or Dirty money

Illegal arms sales

Smuggling
Prostitution rings/human trafficking
Embezzlement
Insider trading
Bribery
Computer frauds,
Fake Currency Notes circulation,
Drugs trafficking etc.
Immigration rackets
Human organ trafficking
Wildlife trafficking etc.

Processing to convert such proceeds of crime, the to make it appear

Legitimate Money is Money Laundering
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PTC,Mysuru

What is the offence of Money Laundering ?

Whosoever directly or indirectly

attempts to indulge
or knowingly assists
or knowingly is a party
or is actually involved in any process or
activity connected with the proceeds of
crime
and projecting it as untainted property
shall be guilty of offence of money
laundering.
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PTC,Mysuru

Actions which can be taken against persons

involved in Money Laundering?

Attachment of property. The

attached properties may be
confiscated and disposed off.
Persons found guilty are punishable
with imprisonment for a term which
shall not be less than three years
but may extend up to seven years
and shall also liable to a fine up to
Rs.5 lakhs.
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PTC,Mysuru

What is PMLA and its

Objective?
Prevention of Money Laundering Act 2002.
It has come into effect from 1st July 2005
amended on 1.6.2009
It extends to whole of India including
Jammu & Kashmir.
To prevent money- laundering and to
provide for confiscation of property derived
from, or involved in, money laundering.

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PTC,Mysuru

Definition of Suspicious transaction

A transaction including an attempted transaction,
whether or not made in cash which, to a person
acting in good faith1.
2.
3.
4.
5.

gives rise to a reasonable ground of suspicion that it may

involve proceeds of an offence specified in the schedule to
the Act regardless of the value involved
appears to be made in circumstances of unusual or
unjustified complexity
appears to have no economic rationale or bonafide purpose
give rise to a reasonable ground of suspicion that involve
financing of the activities relating to terrorism;
Transaction includes deposit, w/d, exchange or transfer of
funds
in whatever currency, whether in cash or in cheque payment
order or other instruments or by electronic or other physical
means.

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PTC,Mysuru

Terminology
AML
CFT

Anti Money Laundering

Combating of Financing of Terrorism

PMLA

Prevention of Money Laundering Act

PCO
CDD
KYC
CIN

Principal Compliance Officer

Customer Due Diligence
Know Your Customer
Customer Identification Number

CTR
RBA
STR
FIU-IND

Cash Transaction Report

Risk Based Approach
Suspected Transaction Report
Financial Intelligence Unit-India

Obligations of Department of Posts

Department has to
maintain a record of all transactions, the nature
and value of which may be prescribed ( already
prescribed will be discussed in future slides)
whether such transactions comprise a single
transaction or series of transactions integrally
connected to each other
furnish such information to the Enforcement
Directorate within such time prescribed through
Principal Compliance Officer in Postal Dte.
Records are to be maintained for a period of 5
years

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 Exercise-1

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PTC,Mysuru

Implementation of norms in the

POs:

Know Your Customers (KYC)

Client Due Diligence (CDD)
For the purpose of implementations of
provisions on prevention of Money laundering
Act, MOF Department of Economic affairs
(Budget division) has formulated the
Prevention of money laundering & combating
of financing Terrorism in small savings
schemes. The above norms are to be applied in
Post Office transactions.
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Know your customer

Three risk categories are defined
Norms for each category spelt out.

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Risk categories :
Risk Category

Low Risk

Accounts
opened/Certificate
purchased with initial
deposit
upto Rs.50,000

Medium Risk

Rs.50,000 to Rs.10 lakh

High Risk

above Rs.10 lakh

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PTC,Mysuru

Low Risk : Norms

Low Risk Accounts opened/Certificate
purchased with initial deposit below Rs.50,000
Norms
Proof
1 Recent Photograph (2 in case of EDBO)
Photograph

In case of SCSS accounts 2 photographs are

mandatory.

Identity proof

Any one of the following :

Electoral Photo identity card, Ration card,
Passport, Driving License, POSB identity card,
Govt. Identity card, (PPO, BPL, Job card). Note:
PAN not mandatory.

Address proof

Any one of the following :

Electoral Photo identity card, Bank/POSB PB,
Current electricity bill/telephone bill, certificate
from any public authority including area
postman GDS or BPM, Aadhar card.

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PTC,Mysuru

Medium Risk : Norms

Medium Risk Accounts opened/Certificate
purchased with initial deposit between
Rs.50,000 to Rs.10 lakh
Norms
Proof
1 Recent Photograph(2 in case of EDBO)
Photograph

In case of SCSS accounts 2 photographs are

mandatory

Identity proof

PAN or Declaration in Form 60/61,if PAN card

not available then any one of the following :
Electoral Photo identity card, Ration card,
Passport, Driving License, POSB identity card,
Govt. Identity card, (PPO, BPL, Job card).

Address proof

Any one of the following :

Electoral Photo identity card, Bank/POSB PB,
Current electricity bill/telephone bill, salary slip
of reputed employer with current address and
PTC,Mysuru
Aadhar card.

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High Risk : Norms

High Risk Accounts opened/Certificate purchased
with initial deposit
above Rs.10 lakh
Norms
Proof
Photograp 1 Recent Photograph (2 in case of EDBO)
In case of SCSS accounts 2 photographs are mandatory.
h
Identity
proof

PAN or Declaration in Form 60/61,if PAN card not available

then any one of the following :
Electoral Photo identity card, Ration card, Passport,
Driving License, POSB identity card, Govt. Identity card,
(PPO, BPL, Job card).

Address
proof

Any one of the following :

Electoral Photo identity card, Bank/POSB PB, Current
electricity bill/telephone bill, salary slip of reputed
employer with current address and Aadhar card.

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Additional

PTC,Mysuru

Copy of source of funds to be collected

Clarifications
Minors - If account/certificate holder is minor, norms are
applicable to guardians
Joint Holders- In case of joint holders , norms are applicable
to all joint account/certificate holders
KYC documents already submitted - Customer who have
already submitted KYC documents in any purchase, need not
submit these again. Account number/purchase application
number through which KYC documents were given earlier to be
mentioned on the account opening / purchase application form.

Name and address of the customer should match with earlier KYC
Documents.

Deposit
is
made
through
agent
The
depositor/purchaser as well as the agent should attest
all KYC documents. In case of direct investment, self
attestation or attestation by Gazetted Officer is required.

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 Exercise-2

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Record Keeping:
Record keeping and preservation of
documents assumes very high
significance in this exercise.
Handling of the documents collected for
accounts/ certificates of various risk
categories
Preservation of records

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PTC,Mysuru

Record keeping :
Post
Office

POSB Accounts

Certificates

HO

KYC documents
(including those
received from EDBOs or
SOs )should be
attached with Account
Opening Forms and
kept in guard files.

KYC documents (including received

from EDBOs) should be attached
with Purchase Application Forms
and kept in guard files.

SO

For SB/TD/PPF KYC

documents should be
retained in the SO in a
guard file in the
custody of SPM and for
RD/MIS/SCSS kept in
guard files a/w SB-3

KYC documents should be

attached with Purchase Application
Forms and kept in guard files.

BO

KYC Documents should KYC Documents should be

be attached with
attached with Purchase Application
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account opening form
form and sent to Account Office.

22.6.2015

Record keeping :
Documents
Post
Office

POSB Accounts and Certificates

Attestation

HO

Photo should be pasted with Account APM to Attest

Opening form/purchase application
photograph from ID
form.
proof.
In case of SCSS account one photo to
be pasted in the Pass book.

SO

Photo should be pasted in the SS

Book in case of SB/TD/PPF accounts
on SB-3 in case of RD/MIS /SCSS
accounts
on purchase application form in
case of certificates.
For SCSS accounts, one photo to
be pasted in the Pass book

SPM to Attest
photograph from ID
proof.

BO

One photo should be pasted in SS

Book and other to be sent to AO a/w
PTC,Mysuru form.
SB-3 or purchase application

BPM to Attest
photograph from ID
proof.

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Record keeping :
Preservation
Details of record

Period of
preservation

Record relating to closure of account i.e. SB3, SB-7 (a) and KYC documents to be
preserved by SBCO

5 years from
the date of
closure of
account

All Purchase Applications along with KYC

documents

5 years after
discharge.

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PTC,Mysuru

Process flow of record keeping

All post
offices

HO

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while sealing the daily vouchers, have to

segregate the closed vouchers & seal them
separately a/w account opening form and KYC
documents.
These closed vouchers a/w LOT & other
vouchers will be sent to HO
HO will seal all closed voucher bundles of
SOs and hand over to SBCO.
At the time of closure of account of HO also ,
the account opening form along with KYC
documents should be attached with closure
voucher and transferred to SBCO

PTC,Mysuru

 Exericise-3

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PTC,Mysuru

Reporting of transactions
Category (Cash Transaction)

Method of monitoring

All cash transactions exceeding

10,00,000/All cash transactions in series which are
less than 10,00,000/- at a time but are
integrated & total exceeds 10,00,000/- in
a month

Category (Suspected Transaction)

Prepare list & send to :

Head of Division on 3rd of
following month.
Head of the Division to Circle by
5th
Head of the Circle to Principal
officer at Directorate by 8th

Method of monitoring

Cash is accepted & Forged or counterfeit

currency notes used or forgery of
Security or documents
Any attempted transaction of Forged or
counterfeit currency notes used or
forgery of Security or documents

Prepare list & send to :

Head of Division on the same day.
Head of the Division to Circle by
same day of receipt from PO
Head of the Circle to Principal
officer at Directorate by same
day of receipt from Head of the
Division.

Suspected transaction
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PTC,Mysuru

Instructions for existing Accounts/Certificates

EXISTING ACCOUNTS
Nature of
measures to
be taken

Procedure

KYC

1 Give a notice to depositor while making first

transaction after this order to submit KYC documents as
per his/her existing balance on next transaction.
2 Depositor to present KYC documents up to third
transaction failing to which fourth transaction will not be
allowed.
3 in case of RD accounts opened through agent , agent
has to attest the documents .
4 If depositor has made a fresh investment with KYC
documents ,he has to produce the same pass
book/certificate as proof.
5 Necessary remark to be given in SS book or SB-3 of old
account
6 KYC to be obtained in case of transfer , revival and
difference in signature .

Record
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keeping

Same as prescribed
for new accounts/certificates.
PTC,Mysuru

 Exercise -4
Q.

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