RBI proposes tough norms for money changing operations
Money changers will be required to report all suspicious transactions involving sale or purchase of foreign currency to watchdog Financial Intelligence Unit.
By PTI |
MUMBAI: Money changers will be required to report all suspicious transactions involving sale or purchase of foreign currency to watchdog Financial Intelligence Unit (FIU), says draft guidelines issued by the Reserve Bank on Friday.
Under the proposed guidelines that seek to consolidate the money changing business, all authorised money changers (AMCs) would be required to appoint Money Laundering Reporting Officers (MLRO) to monitor transactions and ensure compliance of the RBI's anti-money laundering regulations.
As per the draft, comments on which have been sought by October 3, onus of reporting suspicious transactions will be on MLROs.
Suspicious activities will include those transactions where the customer is reluctant to provide necessary documents on frivolous grounds. Further, size and frequency of transactions not commensurate with the normal business and activities undertaken by one or more intermediaries to protect the identity of beneficiary will also be included in suspicious activities category.
Only companies under the 1956 Act with a net-owned funds of Rs 25 lakh in case of a single branch full-fledged money changers (FFMCs) and Rs 50 lakh for multi branch FFMCs, will be able to carry out money changing operations as per the proposal.
The money changers will need to fully comply with the know-your-customers norms before entering into a transaction with a client.
As per the guidelines, the money changers will be required to keep the copies of identification for five years if the purchase of foreign currencies exceeds $2,000 and for one year in case it is between $200-2000.
Under the proposed guidelines that seek to consolidate the money changing business, all authorised money changers (AMCs) would be required to appoint Money Laundering Reporting Officers (MLRO) to monitor transactions and ensure compliance of the RBI's anti-money laundering regulations.
As per the draft, comments on which have been sought by October 3, onus of reporting suspicious transactions will be on MLROs.
Suspicious activities will include those transactions where the customer is reluctant to provide necessary documents on frivolous grounds. Further, size and frequency of transactions not commensurate with the normal business and activities undertaken by one or more intermediaries to protect the identity of beneficiary will also be included in suspicious activities category.
Only companies under the 1956 Act with a net-owned funds of Rs 25 lakh in case of a single branch full-fledged money changers (FFMCs) and Rs 50 lakh for multi branch FFMCs, will be able to carry out money changing operations as per the proposal.
The money changers will need to fully comply with the know-your-customers norms before entering into a transaction with a client.
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As per the guidelines, the money changers will be required to keep the copies of identification for five years if the purchase of foreign currencies exceeds $2,000 and for one year in case it is between $200-2000.
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