9911796707
TMI BlogMaster Circular on Money Transfer Service Scheme.X X X X Extracts X X X X X X X X Extracts X X X X ..... SECTION I Guidelines for permitting Indian Agents under Money Transfer Service Scheme (MTSS) SECTION II Guidelines for Overseas Principals SECTION III Guidelines for appointment of Sub-Agents by Indian Agents SECTION IV Guidelines for renewal of permission of existing Indian Agents SECTION V Inspection of Indian Agents SECTION VI KYC/ AML/ CFT Guidelines for the Indian Agents PART-B Reports / Statements KYC/ AML/ CFT Guidelines for Indian Agents Statement showing details of remittances received through Money Transfer Scheme during the quarter ended PART-A SECTION I Guidelines for permitting Indian Agents under Money Transfer Service Scheme (MTSS) Brief Introduction 1.1 Money Transfer Service Scheme (MTSS) is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible. No outward remittance from India is permissible under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of sister/ associated concerns functioning in the financial sector. A certified copy of the board resolution for undertaking money transfer business. 4. Collateral requirement Collateral equivalent to 3 days' average drawings or USD 50,000 whichever is higher, may be kept by the Overseas Principal with a designated bank in India. The minimum amount of USD 50,000 shall be kept as a foreign currency deposit while the balance amount may be kept in the form of a Bank Guarantee. The adequacy of collateral should be reviewed at half yearly intervals on the basis of remittances received during the past six months. 5. Other conditions Only personal remittances shall be allowed under this arrangement. Donations/contributions to charitable institutions/trusts, trade related remittances, remittance towards purchase of property, investments or credit to NRE Accounts shall not be made through this arrangement. A cap of USD 2500 has been placed on individual remittance under the scheme. Amounts up to Rs.50,000/- may be paid in cash to a beneficiary in India. Any amount exceeding this limit shall be paid by means of account payee cheque/ demand draft/ payment order, etc. or cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / host country. The Overseas Principals will be fully responsible for the activities of their Agents and Sub-Agents in India. Proper records of remitters as also beneficiaries pertaining to all pay-outs in India are to be maintained by the Overseas Principals. All records must be made accessible on demand to the Reserve Bank or other agencies of the Government of India, viz., Customs, Ministry of Home Affairs, FIU-IND, etc. Full details of the remitters and the beneficiaries should be provided by the Overseas Principals, if called for. SECTION III Guidelines for appointment of Sub-Agents by Indian Agents The Indian Agent may appoint Sub-Agents who have place of business and a minimum net worth of `. 5 lakh.The Sub-Agents should operate through the Indian Agents and should not deal directly with the Overseas Principal. The Sub-Agents should act on the payment instructions issued by the Indian Agents. The Indian Agents are fully responsible for the activities of their Sub-Agents. While the Indian Agents will be encouraged to act as self-regulated entities, the onus of ensuring the proper conduct of activities of the Sub-Agents in the prescribed manner will lie solely on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eserve Bank within 15 days from the close of the quarter to which it relates. Agents must arrange to forward to the Chief General Manager-In-Charge, Reserve Bank of India, Foreign Exchange Department, Forex Markets Division, Central Office, Mumbai 400 001 addresses of their additional locations on a quarterly basis. Further, list of their sub-agents should be furnished at the above address on half yearly basis. Indian Agents should also submit to the Chief General Manager-In-Charge, Reserve Bank of India, Foreign Exchange Department, Forex Markets Division, Central Office, Mumbai 400 001 and to the Regional Office concerned, the information for the half-year in the format annexed (Annex-III) as at the end of June and December every year within the 15th of the following month. Annex-I KYC/ AML/ CFT Guidelines for Indian Agents SECTION-I Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons (Indian Agents) under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 - Cross Border Inward Remittance under Money T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary, should be sought separately with his/her consent. 4.2 KYC Policy APs (Indian Agents) should frame their KYC policies incorporating the following four key elements: a) Customer Acceptance Policy; b) Customer Identification Procedures; c) Monitoring of Transactions; and d) Risk Management. 4.3 Customer Acceptance Policy (CAP) a) Every AP (Indian Agent) should develop a clear Customer Acceptance Policy laying down explicit criteria for acceptance of customers. The Customer Acceptance Policy must ensure that explicit guidelines are in place on the following aspects of customer relationship in the AP (Indian Agent). i. No remittance is received in anonymous or fictitious/ benami name(s). [APs (Indian Agents) should not allow any transaction in any anonymous or fictitious name (s) or on behalf of other persons whose identity has not been disclosed or cannot be verified in view of Government of India Notification dated June 16, 2010 Rule 9, sub-rule (1C)]. ii. Parameters of risk perception are clearly defined in terms of the nature of business activity, location of customer and his clients, mode of payments, volume of turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AP (Indian Agent). However, while preparing customer profile, APs (Indian Agents) should take care to seek only such information from the customer, which is relevant to the risk category and is not intrusive. The customer profile is a confidential document and details contained therein should not be divulged for cross selling or any other purposes. c) For the purpose of risk categorisation, individuals (other than High Net Worth) and entities whose identities and sources of wealth can be easily identified and transactions by whom by and large conform to the known profile, may be categorised as low risk. Customers that are likely to pose a higher than average risk should be categorised as medium or high risk depending on customer's background, nature and location of activity, country of origin, sources of funds and his client profile, etc. APs should apply enhanced due diligence measures based on the risk assessment, thereby requiring intensive due diligence for higher risk customers, especially those for whom the sources of funds are not clear. Examples of customers requiring enhanced due diligence include (a) non resident customers; (b) customers from countries that do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Agent) should (i) verify the legal status of the legal person through proper and relevant documents; (ii) verify that any person purporting to act on behalf of the legal person is so authorised and identify and verify the identity of that person; and (iii) understand the ownership and control structure of the customer and determine who are the natural persons who ultimately control the legal person. Customer identification requirements in respect of a few typical cases, especially, legal persons requiring an extra element of caution are given in paragraph 4.5 below for guidance of APs (Indian Agents). APs (Indian Agents) may, however, frame their own internal guidelines based on their experience of dealing with such persons, their normal prudence and the legal requirements as per established practices. If the AP (Indian Agent) decides to undertake such transactions in terms of the Customer Acceptance Policy, the AP (Indian Agent) should take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are [in view of Government of India Notification dated June 16, 2010 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual remittances under the scheme. Amounts up to `.50,000 may be paid in cash. Any amount exceeding this limit shall be paid only by means of cheque/D.D. /P.O., etc. or credited directly to the beneficiary's bank account. However, in exceptional circumstances, where the beneficiary is a foreign tourist, higher amounts may be disbursed in cash. Only 30 remittances can be received by a single individual during a calendar year. 4.5 Customer Identification Requirements Transactions by Politically Exposed Persons (PEPs) - Indicative Guidelines Politically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g., Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. APs (Indian Agents) should gather sufficient information on any person/customer of this category intending to undertake a transaction and check all the information available on the person in the public domain. APs (Indian Agents) should verify the identity of the person and seek information about the source /s of wealth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and where necessary, the source of funds [In view of Government of India Notification dated June 16, 2010 -Rule 9, sub-rule (1B)] APs (Indian Agents) should examine the background and purpose of transactions with persons (including legal persons and other financial institutions) from jurisdictions included in the FATF Statements and countries that do not or insufficiently apply the FATF Recommendations. Further, if the transactions have no apparent economic or visible lawful purpose, the background and purpose of such transactions should, as far as possible, be examined and written findings together with all the documents should be retained and made available to the Reserve Bank/ other relevant authorities, on request. 4.7 Attempted transactions Where the AP (Indian Agent) is unable to apply appropriate KYC measures due to non-furnishing of information and /or non-cooperation by the customer, the AP should not undertake the transaction. Under these circumstances, APs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which give rise to a reasonable ground of suspicion that these may involve the proceeds of an offence mentioned in the Schedule to the PMLA, regardless of the value involved. APs (Indian Agents) should, therefore, develop suitable mechanism through appropriate policy framework for enhanced monitoring of transactions suspected of having terrorist links and swift identification of the transactions and making suitable reports to the FIU-IND on priority. b) APs (Indian Agents) are advised to take into account risks arising from the deficiencies in AML/CFT regime of certain jurisdictions viz. Iran, Uzbekistan, Pakistan, Turkmenistan, Sao Tome and Principe, Democratic People s Republic of Korea (DPRK), 1 Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, Turkey and Nigeria 2 , as identified in FATF Statement (www.fatf-gafi.org) issued from time to time, while dealing with individuals from these jurisdictions. In addition to FATF Statements circulated by the Reserve Bank of India from time to time, (latest as on July 2, 2012, circulated vide the A.P. (DIR Series) Circular No. 108 dated April 17, 2012), APs (Indian Agents) should also consider using publicly available inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Prevention of Money Laundering (Amendment) Act, 2009, casts certain obligations on the APs (Indian Agents) in regard to preservation and reporting of transaction information. APs (Indian Agents) are, therefore, advised to go through the provisions of Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and the Rules notified there under and take all steps considered necessary to ensure compliance with the requirements of Section 12 of the Act ibid . (i) Maintenance of records of transactions APs (Indian Agents) should introduce a system of maintaining proper record of transactions prescribed under Rule 3, as mentioned below: all cash transactions of the value of more than Rupees ten lakh or its equivalent in foreign currency; all series of cash transactions integrally connected to each other which have been valued below Rupees ten lakh 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 lakh; all transactions involving receipts by non-profit organisations of value more than Rupees ten lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ps (Indian Agents) have been advised to pay special attention to all complex, unusual large transactions and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose. It is further clarified that the background including all documents/office records / memoranda pertaining to such transactions and purpose thereof should, as far as possible, be examined and the findings at branch as well as Principal Officer s level should be properly recorded. Such records and related documents should be made available to help auditors in their day-to-day work relating to scrutiny of transactions and also to Reserve Bank/other relevant authorities. These records are required to be preserved for ten years as is required under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g month. Cash transaction reporting by branches to their controlling offices should, therefore, invariably be submitted on a monthly basis and APs (Indian Agents) should ensure to submit CTR for every month to FIU-IND within the prescribed time schedule. ii) While filing CTR, details of individual transactions below `.50,000 need not be furnished. iii) CTR should contain only the transactions carried out by the AP on behalf of their customers excluding transactions between the internal accounts of the AP. iv) A cash transaction report for the AP as a whole should be compiled by the Principal Officer of the AP every month in physical form as per the format specified. The report should be signed by the Principal Officer and submitted to the FIU-IND. v) In case of Cash Transaction Reports (CTR) compiled centrally by APs (Indian Agents) for the branches at their central data centre level, APs (Indian Agents) may generate centralised Cash Transaction Reports (CTR) in respect of branches under central computerized environment at one point for onward transmission to FIU-IND, provided: The CTR is generated in the format prescribed by Reserve Bank in Para 4.12(iv)(b) of this Cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following indicative list of suspicious activities. Some possible suspicious activity indicators are given below: Customer is reluctant to provide details / documents on frivolous grounds. The transaction is undertaken by one or more intermediaries to protect the identity of the beneficiary or hide their involvement. Large amount of remittances. Size and frequency of transactions is high considering the normal business of the customer. The above list is only indicative and not exhaustive. vi) APs (Indian Agents) should not put any restrictions on payment to beneficiaries where an STR has been made. Moreover, it should be ensured that employees of APs shall keep the fact of furnishing such information as strictly confidential and there is no tipping off to the customer at any level. 4.14 Customer Education/Employees Training/Employees Hiring a) Customer Education Implementation of KYC procedures requires APs (Indian Agents) to demand certain information from customers which may be of personal nature or which has hitherto never been called for. This can sometimes lead to a lot of questioning by the customer as to the motive and purpose of collecting such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adoption of a risk-based approach, assessment of risk and putting in place a system which would use that assessment to take steps to effectively counter ML/FT. The recommendations of the Committee have since been accepted by the Government of India and need to be implemented. Accordingly, APs (Indian Agents) should take steps to identify and assess their ML/TF risk for customers, countries and geographical areas as also for products/ services/ transactions/delivery channels, in addition to what has been prescribed in the paragraph 4 above. APs (Indian Agents) should have policies, controls and procedures, duly approved by their boards, in place to effectively manage and mitigate their risk adopting a risk-based approach as discussed above. As a corollary, APs (Indian Agents) would be required to adopt enhanced measures for products, services and customers with a medium or high risk rating. APs (Indian Agents) may design risk parameters according to their activities for risk based transaction monitoring, which will help them in their own risk assessment. Note:- The above KYC/ AML/ CFT Guidelines would also be applicable mutatis mutandis to all Sub-agents of the Indian Agents unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons Appendix List of Circulars/ Notifications which have been consolidated in the Master Circular on Money Transfer Service Scheme Sl. No. Notification/ Circular Date 1. Notification on MTSS June 4, 2003 2. A.P. (DIR Series) Circular No. 18 [ A.P.(FL Series) Circular No. 05] November 27, 2009 3. A.P. (DIR Series) Circular No. 19 [ A.P.(FL Series) Circular No. 02] November 25, 2010 4. A.P. (DIR Series) Circular No. 21 [ A.P.(FL Series) Circular No. 04] November 30, 2010 5. A.P. (DIR Series) Circular No. 24 [ A.P.(FL Series) Circular No. 05] December 13, 2010 6. A.P.(DIR Series) Circular No.26 [A.P.(FL Series) Circular No. 07] December 22, 2010 7. A.P.(DIR Series) Circular No.28 [A.P.(FL Series) Circular No. 09] December 22, 2010 8. A.P.(DIR Series) Circular No.50 [A.P.(FL Series) Circular No. 12] April 6, 2011 9. A.P.(DIR Series) Circular No. 52[A.P.(FL Series) Circular No. 14] April 6, 2011 10. A.P. (D ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
