What changed
This master circular consolidates all previous instructions on KYC/AML/CFT norms issued up to June 30, 2010, replacing the earlier circular dated July 1, 2009. It does not introduce new requirements but brings together existing guidelines into a single reference document.
What it means for you
Banks must ensure their KYC policies are board-approved and aligned with FATF recommendations and Basel Committee guidance. Non-compliance with these consolidated norms can attract penalties under the Banking Regulation Act, 1949. The circular serves as a single point of reference for all AML/CFT obligations.
What you must do
- Review and update your bank's KYC/AML policy to align with the consolidated master circular.
- Ensure board approval for the KYC policy framework and any subsequent changes.
- Train staff on customer identification procedures and suspicious transaction monitoring as per the circular.
- Maintain records as required under PMLA, 2002 and report suspicious transactions to appropriate authorities.
Who it affects
All scheduled commercial banks (excluding RRBs), All India financial institutions, Local area banks
Does this master circular introduce new KYC requirements?
No, it consolidates all existing instructions issued up to June 30, 2010, into one document. Banks should refer to this circular for all KYC/AML/CFT guidelines.
What happens if a bank fails to comply with these guidelines?
Non-compliance or contravention of these guidelines attracts penalties under the Banking Regulation Act, 1949, as they are issued under Section 35A of that Act.
Which entities are covered under this master circular?
It applies to all scheduled commercial banks (excluding Regional Rural Banks), all India financial institutions, and local area banks.