RBI updates KYC norms: Strengthen Anti-Money Laundering and Terror Financing measures

Brief Overview:

 The RBI vide its notification dated 17th October 2023 amended Master Directions on KYC dated 25th February 2016 (“Amended Master Directions”) to strengthen anti-money laundering and counter-financing of terrorism measures; and to ensure that regulated entities are complying with the latest laws and regulations.

Technical Details:

The key highlights of the Amended Master Directions are provided below:
1)  Updated instructions considering amendments to the Prevention of Money Laundering Rules (“PML Rules”):
(a)  Lowered percentage of controlling ownership for determination of beneficial owner to 10%.
(b)  Aligned definitions of ‘Politically Exposed Persons’ and ‘Non-profit Organization’ with the PML Rules.
(c)  Proposed new concept of “Group”.
2)  Amended as per Financial Action Task Force’s recommendations: Mitigated risks posed by virtual assets and virtual asset service providers;
3)  Specified requirements for ‘Regulated Entities’ to comply with the Foreign Contribution (Regulation) Act, 2010;
4)  Clarified customer due diligence requirements for low-risk and high-risk customers;

5)  Enhanced due diligence requirements for customers from high-risk jurisdictions.

For further details, please see:

 Amendment to the Master Direction (MD) on KYC

CIRCULARMDONKYC5406E44FAC85476798B09989D51F7498.PDF (rbi.org.in)

For any queries/clarifications, please feel free to ping us and we will be happy to chat:

● Mr. Ankit Sinha (ankit.sinha@jclex.com)
● Mr. Saurabh Sharma (saurabh.sharma@jclex.com)
● Ms. Rupul Jhanjee (rupul.jhanjee@jclex.com)

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