UBD.BPD (PCB) Cir. No. 32/14.01.062/2013-14
October 22, 2013
The Chief Executive Officer
All Primary (Urban) Co-operative Banks.
Madam / Dear Sir,
Know Your Customer (KYC)/Anti Money Laundering (AML) Standards/Combating Financing of Terrorism (CFT)/ Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002 ˜At par™ cheque facility extended to Cooperative Banks by Scheduled Commercial Banks
It has been observed that UCBs are utilizing ˜at par™ cheque facility extended by Scheduled Commercial Banks not only for their own use but also for their customers, including walk-in customers.
2. Keeping in view the systemic and supervisory concerns that emanate from such an arrangement, UCBs are advised to utilize the ˜at par™ cheque facility only for the following purposes:
i) for their own use.
ii) for their account holders who are KYC compliant provided that all transactions of `. 50,000.00 or more should be strictly by debit to the customer™s account.
iii) for walk-in customers against cash for less than `. 50,000.00 per individual.
3. In order to utilise the ˜at par™ cheque facility in the above manner, UCBs should maintain
i) records pertaining to issuance of ˜at par™ cheques covering inter alia applicant™s name and account number, beneficiary™s details and date of issuance of the ˜at par™ cheque.
ii) sufficient balances/drawing arrangements with the commercial bank extending such facility for purpose of honouring such instruments.
UCBs should also ensure that all ˜at par™ cheques issued by them are crossed ˜account payee™ irrespective of the amount involved.
4. UCBs are advised to make use of more efficient means of remittances for the customers like NEFT or RTGS by providing such services directly or by becoming sub-members of banks providing such services as per regulations in this regard issued by RBI from time to time.
Tags: Bank, cheque, Indian Settlement Systems, Know Your Customer, KYC, Modern Language Association, money laundering, Prevention of Money Laundering Act 2002