What changed
RBI amended the KYC Master Direction to align with recent changes in the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. It also incorporated procedures from a Government Order dated January 30, 2023, regarding Section 12A of the Weapons of Mass Destruction Act. Additionally, instructions were updated per FATF recommendations and some existing provisions were refined after review.
What it means for you
Banks and other regulated entities must update their KYC policies and procedures to comply with the amended Master Direction. The changes require enhanced due diligence measures related to money laundering and proliferation financing risks, particularly concerning weapons of mass destruction. Immediate implementation is needed to avoid compliance gaps.
What you must do
- Review the Annexure to the circular for specific changes and update your KYC policy accordingly.
- Train compliance and operations teams on the new WMD Act Section 12A procedures.
- Ensure your CDD processes align with the updated FATF recommendations.
- Implement the amended provisions with immediate effect as per RBI directive.
Who it affects
All regulated entities (banks, NBFCs, payment system operators, etc.), Compliance officers and KYC teams, Senior management responsible for AML/CFT policies
What is the effective date of these KYC amendments?
The amended provisions in the Master Direction on KYC shall come into force with immediate effect from the date of the circular (April 28, 2023).