What changed
The Prevention of Money Laundering (Amendment) Act, 2009, effective June 1, 2009, extended record retention periods. RRBs must now keep transaction records for 10 years from the transaction date (previously shorter) and customer identification records for 10 years after business relationship ends. This modifies earlier circulars from 2005 and 2006.
What it means for you
RRBs must update their record-keeping systems to comply with the new 10-year retention mandates, ensuring all transaction and identity documents are preserved for legal evidence. The Principal Officer must have timely access to this data and report independently to senior management or the board. Enhanced due diligence for Politically Exposed Persons (PEPs) now requires senior management approval if a customer becomes a PEP post-account opening.
What you must do
- Retain all transaction records (domestic and international) for at least 10 years from the transaction date, as per PMLA Rules.
- Preserve customer identification documents (e.g., passports, PAN cards) for at least 10 years after the business relationship ends.
- Update internal policies to require senior management approval for continuing accounts where customers become PEPs, with enhanced monitoring.
- Ensure the Principal Officer has independent, timely access to all KYC/AML data and reports directly to senior management or the board.
Who it affects
Regional Rural Banks (RRBs), Principal Officers of RRBs, Senior management and board of RRBs, Compliance and AML teams at RRBs
What is the new record retention period for transaction records under PMLA 2009?
RRBs must maintain all necessary transaction records for at least 10 years from the date of each transaction, as per Section 12(2)(a) of the PMLA 2009.
How should RRBs handle accounts of customers who become Politically Exposed Persons (PEPs) after account opening?
If an existing customer or beneficial owner becomes a PEP, RRBs must obtain senior management approval to continue the relationship and apply enhanced due diligence measures, including ongoing monitoring.
What are the responsibilities of the Principal Officer under this circular?
The Principal Officer must have timely access to customer identification data, transaction records, and other relevant information, and must act independently, reporting directly to senior management or the board.