What changed
RBI issued a Master Circular that consolidates all previous KYC/AML/CFT instructions for NBFCs, MNBCs, and RNBCs into one document, consolidating instructions up to June 30, 2012. This replaces earlier standalone circulars listed in the appendix, ensuring a single reference point for compliance.
What it means for you
NBFCs must now refer to this Master Circular as the sole source for KYC/AML/CFT obligations, reducing confusion from multiple circulars. The circular reinforces the need for Board-approved policies, customer identification, transaction monitoring, and reporting to FIU-IND, with penalties for non-compliance under the RBI Act and PMLA.
What you must do
- Review and align your NBFC's KYC/AML/CFT policy with this Master Circular, ensuring Board approval.
- Update internal procedures for customer due diligence, including acceptance of Aadhaar letter as an identification document and handling of PEP accounts as per KYC norms.
- Ensure proper record-keeping of transactions as per PMLA rules and timely filing of Suspicious Transaction Reports (STRs) with FIU-IND.
- Train staff on the consolidated guidelines, especially on risk assessment and monitoring for money laundering/terrorist financing.
Who it affects
All Non-Banking Financial Companies (NBFCs), Miscellaneous Non-Banking Companies (MNBCs), Residuary Non-Banking Companies (RNBCs), Compliance officers and principal officers of NBFCs, Board of directors of NBFCs
What is the key change in this Master Circular?
It consolidates all previous KYC/AML/CFT circulars for NBFCs into one document, updated to June 30, 2013, making it the single reference for compliance.
Are these guidelines mandatory for all NBFCs?
Yes, they apply to all NBFCs, MNBCs, and RNBCs, issued under Sections 45K and 45L of the RBI Act, 1934, with penalties for non-compliance.
What are the key obligations under this circular?
NBFCs must have a Board-approved KYC/AML policy, perform customer due diligence, maintain transaction records, and report suspicious transactions to FIU-IND as per PMLA rules.