KYC & AML Guidelines

PEPs are individuals who hold important public positions in a foreign country. This includes heads of state, senior politicians, and military officers. Banks treat them as 'High Risk' because they have more opportunities to be involved in corruption. Banks need senior management approval to open accounts for PEPs. Example: A foreign Prime Minister opening a personal bank account in India is a PEP.

Money laundering happens in three distinct phases. 1. Placement: Putting 'dirty' cash into a bank. 2. Layering: Moving money through many complex transactions to hide the trail. 3. Integration: Bringing the money back into the legal economy, like buying property. Example: A criminal deposits cash (Placement), transfers it to five overseas accounts (Layering), and then buys a luxury hotel (Integration).

An STR is a report that banks must file if they find a transaction that makes no sense or looks illegal. This must be sent to the Financial Intelligence Unit (FIU-IND) within 7 days of being sure the activity is suspicious. This applies even if the money involved is small. Example: If a student's account suddenly gets 10 small transfers from 10 different countries every day, the bank files an STR.