PMLA Compliance: CTR, STR & Risk Monitoring for Co-op Banks

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 86 kb ) StCBs/DCCBs - PMLA, 2002 – Obligation of Banks RBI/2007-2008/381 RPCD.CO.RF.AML.BC.No.81/07.40.00/2007-08 June 25, 2008 The Chief Executives of All State and Central Co-operative Banks Dear Sir, Prevention of Money Laundering Act, 2002 - Obligation of Banks in Terms of Rules Notified there under Please refer to our circular RPCD.CO.RF.AML.BC.65/07.02.12/2005-06 dated March 3, 2006 . In Paragraph 3 of the said circular, it was advised that banks are required to maintain and preserve information in respect of transactions with its client referred to in Rule 3 in hard and soft copies. It is further clarified that banks should also report information in respect of all transactions referred to in Rule 3, ibid to the Director, Financial Intelligence Unit-India (FIU-IND). 2. In terms of instructions contained in paragraph 2 of the guidelines on 'Know Your Customer Norms' and 'Anti-Money Laundering Measures' of our circular dated February 18, 2005, banks are required to prepare a profile for each customer based on risk categorization. Further, vide paragraph 4 of our circular dated February 28, 2008, the need for periodical review of risk categorization has been emphasized. It is, therefore, reiterated that banks, as a part of transaction monitoring mechanism, are required to put in place an appropriate software application to throw alerts when the transactions are inconsistent with risk categorization and updated profile of customers. It is needless to add that a robust software throwing alerts is essential for effective identification and reporting of suspicious transactions. 3. In paragraph 6 of our circular dated March 3, 2006, referred to above, banks were advised to initiate urgent steps to ensure electronic filing of cash transaction report (CTR) and Suspicious Transaction Reports (STR) to FIU-IND. It has been reported by FIU-IND that many banks are yet to file electronic reports. It is, therefore, advised that in case of banks, where all the branches are not yet fully computerized, the Principal Officer of the bank should cull out the transaction details from branches which are not computerized and suitably arrange to feed the data into an electronic file with the help of the editable electronic utilities of CTR / STR as have been made available by FIU-IND on their website http://fiuindia.gov.in . 4. In paragraph 6(I)(a) of our circular dated March 3, 2006, referred to above, banks were advised to make Cash Transaction Reports (CTR) to FIU-India for every month latest by 15th of the succeeding month. It is further clarified that cash transaction reporting by branches to their Principal Officer should invariably be submitted on monthly basis (not on fortnightly basis) and the Principal Officer, in turn, should ensure to submit CTR for every month to FIU-IND within the prescribed time schedule. 5. In regard to CTR, it is reiterated that the cut-off limit of Rupees ten lakh is applicable to integrally connected cash transactions also. Further, after consultation with FIU-IND, it is clarified that: a) For determining integrally connected cash transactions, banks should take into account all individual cash transactions in an account during a calendar month , where either debit or credit summation, computed separately, exceeds Rupees ten lakh during the month. However, while filing CTR, details of individual cash transactions below rupees fifty thousand may not be indicated. Illustration of integrally connected cash transactions is furnished in Annex-I to this circular. b) CTR should contain only the transactions carried out by the bank on behalf of their clients / customers excluding transactions between the internal accounts of the bank. c) All cash transactions, where forged or counterfeit Indian currency notes have been used as genuine should be reported by the Principal Officer to FIU-IND immediately in the format (Counterfeit Currency Report - CCR) as per Annex-II & Annex-III . Electronic data structure has been furnished in Annex-IV to enable banks to generate electronic CCRs. These cash transactions should also include transactions where forgery of valuable security or documents has taken place and may be reported to FIU-IND in plain text form. 6. In paragraph 4 of the Guidelines on KYC Norms / AML Measures annexed to our circular RPCD.AML.BC.No.80/07.40.00/2004-05 dated February 18, 2005, banks have been advised to pay special attention to all complex, unusual large transactions and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose. It is further clarified that the background including all documents / office records / memoranda pertaining to such transactions and purpose thereof should, as far as possible, be examined and the findings at branch as well as Principal Officer level should be properly recorded. These records are required to be preserved for ten years as is required under PMLA, 2002. Such records and related documents should be made available to help auditors in their work relating to scrutiny of transactions and also to Reserve Bank / other relevant authorities. 7. In paragraph 7 of our March 3, 2006 circular, banks have been advised that the customer should not be tipped off on the STRs made by them to FIU-IND. It is likely that in some cases transactions are abandoned / aborted by customers on being asked to give some details or to provide documents. It is clarified that banks should report all such attempted transactions in STRs , even if not completed by customers, irrespective of the amount of the transaction. 8. While making STRs, banks should be guided by the definition of 'suspicious transaction' as contained in Rule 2(g) of Rules ibid. It is further clarified that banks should make STRs if they have reasonable ground to believe that the transaction involves proceeds of crime generally irrespective of the amount of transaction and / or the threshold limit envisaged for 'predicate offences' in part B of Schedule of PMLA, 2002. 9. In the context of creating KYC / AML awareness among the staff and for generating alerts for suspicious transactions, banks may consider the indicative list of suspicious activities contained in Annex-E of the 'IBA's Guidance Note for Banks, 2005' (copy enclosed).   10.  These guidelines are issued under Section 35A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) and Rules ibid. Any contravention of the said guidelines may attract penalties under the relevant provisions of the Act. Yours faithfully, (G. Srinivasan) Chief General Manager-in-Charge Annex – I Illustration of Integrally Connected Cash Transaction The following transactions have taken place in a branch during the month of April, 2008: Date Mode Dr (in Rs.) Cr (in Rs.) Balance (in Rs.) BF - 8,00,000.00 02/04/2008 Cash 5,00,000.00 3,00,000.00 6,00,000.00 07/04/2008 Cash 40,000.00 2,00,000.00 7,60,000.00 08/04/2008 Cash 4,70,000.00 1,00,000.00 3,90,000.00 Monthly summation   10,10,000.00 6,00,000.00   (i)    As per above clarification, the debit transactions in the above example are integrally connected cash transactions because total cash debits during the calendar month exceeds Rs. 10 lakh. However, the bank should report only the debit transaction taken place on 02/04 & 08/04/2008. The debit transaction dated 07/04/2008 should not be separately reported by the bank, which is less than Rs.50,000/-. (ii) All the credit transactions in the above example would not be treated as integrally connected, as the sum total of the credit transactions during the month does not exceed Rs.10 lakh and hence credit transaction dated 02, 07 & 08/04/2008 should not be reported by banks. 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/381 · issued 25 Jun 2008. The plain-English explanation above is BankPulse’s own independent summary.

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