apparent economic or visible lawful purpose in regard to customer ’ s proclaimed business / income activity and transactions that involve large amounts of cash, inconsistent with the normal and expected activity of the customer will qualify to be suspicious transactions. banks are required to be vigilant about these transactions. as per pmla, suspicious transactions are that which : • gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime ; or • appear to be made in circumstances of unusual or unjustified complexity ; or • appear to have no economic rationale or bonafide purpose or • raise suspicions involving financing of terrorism. hence, the banks are required to prescribe threshold limits for a particular category of accounts, to pay special attention to the transactions which exceed these limits and to set key indicators for accounts, taking note of the background of the customer, such as the country of origin, sources of funds, the type of transactions involved and other risk factors. banks are required to report such transactions ( strs ) as per definition in pmla. combating financing of terror banks are to develop suitable mechanism for enhanced monitoring of accounts suspected of having terrorist links and swift identification of the transactions and making suitable reports to fiu - ind on priority. strs should include suspected cases of terrorist financing. banks have to be particularly aware of the unscr enlisted individuals and entities and accounts and transactions are to be monitored vis - a - vis the list. any matching found is to be advised to mha ( uapa – section 51a ). bis central bankers ’ speeches unlawful activities ( prevention ) act, 1967 ( uapa ) govt is empowered to freeze, seize or attach funds / financial assets of persons engaged in or suspected to be engaged in terrorism. under uapa, rbi forwards the list of individuals / entities subject to un sanctions to banks. banks are required to ensure expeditious & effective implementation of the procedure of uapa for freezing / unfreezing of financial assets. financial intelligence unit ( fiu ) fiu - india has been set up pursuant to pmla. this is a central agency to collect, collate and analyze financial information. it also disseminates information to concerned investigating authorities, if need be. it receives ctr / str from banks / fis and from entities regulated by sebi / irda. the following types of transactions are to be reported to fiu - ind : • all cash transactions of the value of more than ₹ 10 lakh or its

in denial of banking service to public, especially to those who are financially or socially disadvantaged. banks have been advised not to deny public access to banking services, taking the indicative list of documents as an exhaustive list. what could be done if required documents are not available? we have special provision for close family members as mentioned earlier. small accounts could be opened by those who do not have the prescribed documents. small accounts can be opened with a form filled up & signed before the bank officer with self - attested photograph – bank officer to certify. the small accounts will have the following features : they will have limitations on credit / debit / balance ; will be available only at cbs - enabled branches ; no foreign remittances will be permitted ; will be available only for 12 months – further extension on application for officially valid document ; the aggregate of all credits in a financial year does not exceed ₹ one lakh ; the aggregate of all withdrawals and transfers in a month does not exceed ₹ ten thousand, and the balance at any point of time does not exceed ₹ fifty thousand. additional documents + aeps • documents such as aadhaar letter & nrega card are officially valid documents for identity and address proof. • aadhaar enabled payment system or aeps developed by national payments corporation of india allows a person with an aadhaar number to carry out financial transaction on a micro - atm provided by the banking correspondent. • with aeps, the account holders will be able to make balance enquiry, cash withdrawal, cash deposit and aadhaar to aadhaar funds transfer. to conclude do we need such elaborate structure? is it not taking the question of safety too far? are we paranoid about terrorism and money laundering? why we have to put ordinary customers of banks to such greater and deeper requirements? these are legitimate questions that can arise in your mind. but, we have to remember that we are responsible citizens ; we have to not only abide by the law, but also help enforcing the law. we are also a responsible nation among the international community. we have obligations to the rest of the world as well. this kyc structure built by us is not of our own only ; it is based on the consensual approach by all the committed nations. it is for the general good of the citizens of the world. bis central bankers ’ speeches we seek the understanding and the cooperation of all bank customers in complying with the kyc requirements on an ongoing