Money laundering transaction records & definition of beneficial owner in Amendment Rules 2010 - RBI

Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Amendment Rules, 2010 - Obligation of banks/All India Financial institutions

 

Government of India vide its Notification No. 7/2010-E.S.F.No.6/8/2009-E.S dated February 12, 2010 has amended the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. A copy of the Notification is enclosed for ready reference in DBOD. AML.BC. No. 95 /14.01.001/2009-10 dated 23rd April 2010.

The salient features of the amendment inter alia require banks and All India
Financial Institutions:
• to maintain the records of all transactions including the records of transactions detailed in rule 3 sub-rule (1).
• the records referred to in rule 3 should contain all necessary information specified by the Regulator to permit reconstruction of individual transactions including the information detailed in rule 4.

Further, in rule 9 in sub-rule (1A) an explanation of 'beneficial owner' has been inserted in terms of which " ' Beneficial Owner' shall mean the natural person who ultimately owns or controls a client and or the person on whose behalf a transaction is being conducted, and includes a person who exercise ultimate effective control over a juridical person".