Business Relationships before customer verification under IFSCA (AML, CFT & KYC) Guidelines

International Financial Services Centre Authority’s (IFSCA) AML Guidelines mandate that the regulated entities conduct customer verification before establishing a customer relationship. However, there are certain exceptions to this requirement.

If the customer verification causes hindrance to the ordinary course of business, then the business can postpone the verification.

Besides that, when the customer is identified as posing low risk and the entity can effectively manage such low risk, the customer verification process can be delayed for concluding post establishing the business relationship.

Further, when the business relationship is in the context of opening the bank account, then delay in identity verification is allowed, provided that the customer neither closes the account nor does he execute any transaction before verification.

However, businesses can’t postpone the verification endlessly. There’s a strict period of 30 days within which the customer’s identity must be verified. If the business fails to do so, then it must record the reason for non-compliance and report it to senior management. Further, the regulated entities must suspend the customer relationship and shall not execute any transaction except to entertain refund requests for the funds deposited earlier.

The business relationship must be terminated if the customer can’t be verified within 120 days.

AML India can surely assist you in your AML compliance journey. We will help you with AML compliance so that you focus on increasing your business growth opportunities while safeguarding your business from money laundering and financial crime risks.

We are committed to assisting proper enforcement of AML and CFT regulations to regulated entities in India by designing a personalised AML framework – policies, internal controls, and procedures – and ensuring effective implementation of the same.

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Business Relationships before customer verification under IFSCA (AML, CFT & KYC) Guidelines

Business Relationships before customer verification under IFSCA (AML, CFT & KYC) Guidelines