RBI/2013-14/344
RPCD.CO.RRB.RCB.BC.No. Cir.No. 48/07.51.010//2013-14
October 29, 2013
The Chairman
All Regional Rural Banks (RRBs)
All State and Central Co-operative Banks (StCBs and CCBs)
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 / Regional Rural Banks by Scheduled Commercial Banks
It has been observed that some banks 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 for facilitating their remittances and payments.
2. Keeping in view the systemic and supervisory concerns that emanate from such an arrangement, RRBs/StCBs/CCBs are advised to utilize the ˜at par™ cheque facility only for:
i) their own use,
ii) 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) 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, RRBs/ StCBs/ CCBs 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.
RRBs/StCBs/CCBs should also ensure that all ˜at par™ cheques issued by them are crossed ˜account payee™ irrespective of the amount involved.
4. RRBs/StCBs/CCBs 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.
Yours faithfully,
(A.G. Ray)
General Manager
