HomeCirculars › RBI/2009-10/303

PMLA Rules Amended: New KYC & NPO Reporting for UCBs

Current · Source: Reserve Bank of India · RBI/2009-10/303 · issued 03 Feb 2010 · ~2 min read
Quick answerRBI mandates UCBs to report NPO transactions above ₹10 lakh to FIU-IND monthly, verify identity for walk-in transactions ≥₹50,000, and maintain records for 10 years. Suspicious transaction reporting must remain confidential.
The rule, in the simplest words
How it plays out — a real example

Ravi, a compliance officer at a UCB in Surat, gets a monthly report showing a local NGO received ₹12 lakh in donations through three walk-in cash deposits of ₹50,000 each. He flags these as connected transactions, verifies the NGO's ID immediately, and files the report to FIU-IND by the 15th, keeping the suspicious transaction report confidential from branch staff.

What changed

The Prevention of Money-laundering Rules were amended in November 2009, introducing a definition for 'non-profit organization' and requiring banks to record all NPO receipts exceeding ₹10 lakh. The record retention period was extended to 10 years, and the requirement to verify identity for non-account based customers (walk-ins) for transactions of ₹50,000 or more was added. The earlier provision allowing identity verification within a reasonable time after the transaction was removed.

What it means for you

UCBs must now systematically monitor and report large NPO transactions, increasing compliance costs and operational focus on anti-money laundering. The stricter walk-in customer verification rule closes a loophole, requiring immediate KYC for cash transactions above ₹50,000. Banks need to update their systems to flag connected transactions and ensure confidentiality of STR filings.

What you must do

Who it affects

All Primary (Urban) Co-operative Banks, Compliance and AML teams, Branch staff handling cash transactions, Non-profit organization account holders

❓ Common questions

What is the new reporting requirement for non-profit organizations?

UCBs must maintain records of all transactions involving receipts by non-profit organizations exceeding ₹10 lakh (or equivalent in foreign currency) and report these to FIU-IND every month by the 15th of the succeeding month.

How should we handle walk-in customers under the amended rules?

For any transaction of ₹50,000 or more by a non-account based customer, you must verify their identity and address immediately. If you suspect a customer is splitting a larger transaction into smaller ones to avoid this threshold, you must still verify identity and consider filing a Suspicious Transaction Report.

What is the new record retention period?

All records referred to in Rule 3 (including transaction records and client identity documents) must be maintained for a period of ten years from the date of the transaction.

📜 Read the original circular — full text as issued by RBI
RBI/2009-10/303 UBD. BPD. (PCB).Cir.  No.  41 /12.05.001/2009-10  February 3, 2010 The Chief Executive Officers of All Primary (Urban) Co-operative Banks Dear Sir, UCBs - Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Amendment Rules, 2009 - Obligation of banks / Financial institutions As you are aware Government of India vide its Notification No.13/2009/F.No.6/8/2009-ES dated November 12, 2009, has amended the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. A copy of the Notification is enclosed for ready reference. 2. Some of the salient features of the amendment, relevant to banks and financial institutions are as under: Clause (ca) inserted in sub-rule (1) of Rule 2 defines "non-profit organization" Clause (BA) inserted in sub-rule (1) of Rule 3  requires  banks/financial  institutions  to maintain proper record of all transactions involving receipts by non-profit organizations of value more than rupees ten lakh or its equivalent in foreign currency. The amended Rule 6 provides that the records referred to in rule 3 should be maintained for a period of ten years from the date of transactions between the client and the banking company/financial institution. A proviso has been inserted in sub-rule (3) of Rule 8, which requires that banks /financial institutions and its employees should keep the fact of furnishing suspicious transaction information strictly confidential. Rule 9, now requires banks/financial institutions to verify identity of the non-account based customer while carrying out transaction of an amount equal to or exceeding rupees fifty thousand, whether conducted as a  single transaction or several transactions that appear to be connected. The amended sub-rule (1) of Rule 9, in terms of clause (b) (ii) requires verification of identity of the customer  for all international money transfer operations. Proviso to Rule 9 (1) regarding the verification of identity of the client within a reasonable time after opening the account/execution of the transaction has been deleted . 3. Accordingly, in view of amendments to the above Rules, banks / financial institutions are required to : (i) Maintain proper record of all transactions involving receipts by non- profit organizations of value more than rupees ten lakh or its equivalent  in foreign currency  and to forward a report to FIU-IND  of all such transactions in the prescribed format  every month  by the 15th of the succeeding month. (ii) In case of transactions carried out by a non-account based customer, that is a walk-in customer, where the amount of transaction is equal to or exceeds rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected, the customer's identity and address should be verified.  Further, if a bank has reason to believe that a customer is intentionally structuring a transaction into a series of transactions below the threshold of Rs.50, 000/- the bank should verify identity and address of the customer and also consider filing a suspicious transaction report (STR) to FIU-IND. 4. Urban Cooperative Banks are advised to strictly follow the amended provisions of PMLA Rules and ensure meticulous compliance to these Rules. Yours faithfully, (A.K.Khound) Chief General Manager-in-Charge Encl: As above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/303 · issued 03 Feb 2010. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Who does what — compliance checklist
🏦 Branch Manager
  • Configure transaction monitoring systems to flag walk-in transactions of ₹50,000 or more and connected smaller transactions.
📜 Compliance
  • Update internal AML policies to include the new NPO definition and ₹10 lakh reporting threshold.
  • Train staff on immediate identity verification for non-account based customers and on maintaining confidentiality of STR submissions.
  • Ensure monthly reporting to FIU-IND of all NPO transactions above ₹10 lakh by the 15th of the succeeding month.
  • Extend record retention for all client and transaction records to 10 years as per amended Rule 6.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Primary (Urban) Co-operative Banks, Compliance and AML teams, Branch staff handling cash transactions, Non-profit organization account holders), your first concrete step on “PMLA Rules Amended: New KYC & NPO Reporting for UCBs” is: “Update internal AML policies to include the new NPO definition and ₹10 lakh reporting threshold.” (RBI issued this 03 Feb 2010).

  1. Circular: RBI/2009-10/303 -- PMLA Rules Amended: New KYC & NPO Reporting for UCBs
  2. Issued: 03 Feb 2010
  3. Action required: Update internal AML policies to include the new NPO definition and ₹10 lakh reporting threshold.
  4. Action required: Configure transaction monitoring systems to flag walk-in transactions of ₹50,000 or more and connected smaller transactions.
  5. Action required: Train staff on immediate identity verification for non-account based customers and on maintaining confidentiality of STR submissions.
  6. Action required: Ensure monthly reporting to FIU-IND of all NPO transactions above ₹10 lakh by the 15th of the succeeding month.
  7. Action required: Extend record retention for all client and transaction records to 10 years as per amended Rule 6.
  8. Owner: ____________ Target date: ____________
  9. Board/committee approval needed? Y / N
  10. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5487&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗