RBI notifies Master Direction on KYC to update the instructions on Wire Transfer

The Reserve Bank of India (“RBI”) has issued an amendment to Master Direction (MD) on KYC to update the instructions on Wire Transfer and also align the same with the relevant FATF Recommendation.

 Key Takeaways:

1. Information requirements for wire transfers for the purpose of this Master Direction:

a. All cross-border wire transfers has to be accompanied by accurate, complete, and meaningful originator and beneficiary information as mentioned below:

• name of the originator;
• the originator account number where such an account is used to process the transaction;
• the originator’s address, or national identity number, or customer identification number, or date and place of birth;
• name of the beneficiary; and
• the beneficiary account number where such an account is used to process the transaction.

In the absence of an account, a unique transaction reference number should be included which permits traceability of the transaction

b. Domestic wire transfer, where the originator is an account holder of the ordering RE, has to be accompanied by originator and beneficiary information, as indicated for cross-border wire transfers mentioned in points one and two above.

c. Domestic wire transfers of rupees fifty thousand and above, where the originator is not an account holder of the ordering RE, shall also be accompanied by originator and beneficiary information as indicated for cross-border wire transfers.

2. Regulated Entities (“REs”) have to ensure that all the information on the wire transfers shall be immediately made available to appropriate law enforcement and/or prosecutorial authorities as well as FIU-IND on receiving such requests with appropriate legal provisions.

3. Please note, the wire transfer is not intended to cover the following types of payments:

a. Any transfer that flows from a transaction carried out using a credit card / debit card / Prepaid Payment Instrument (PPI), including through a token or any other similar reference string associated with the card / PPI, for the purchase of goods or services, so long as the credit or debit card number or PPI id or reference number accompanies all transfers flowing from the transaction. However, when a credit or debit card or PPI is used as a payment system to effect a person-to-person wire transfer, the wire transfer instructions shall apply to such transactions and the necessary information should be included in the message

b. Financial institution-to-financial institution transfers and settlements, where both the originator person and the beneficiary person are regulated financial institutions acting on their own behalf. It is, however, clarified that nothing within these instructions will impact the obligation of an RE to comply with applicable reporting requirements under PML Act, 2002, and the Rules made thereunder, or any other statutory requirement in force.

4. There are other responsibilities of ordering RE, intermediary RE and beneficiary RE, effecting wire transfer.

5. Other obligations:

a. Obligations in respect of REs’ engagement or involvement with unregulated entities in the process of wire transfer

b. REs’ responsibility while undertaking cross-border wire transfer with respect to name screening (such that they do not process cross-border transactions of designated persons and entities)

c. REs’ responsibility to fulfil record management requirements.

For a detailed read of the amendment, please write to us at inquiries@lexplosion.in

Source: Reserve Bank of India