INDIA: IBA initiates steps to implement KYC norms
- IBA initiates steps to implement KYC norms
MUMBAI: With the Reserve Bank of India (RBI) stepping up pressure on banking institutions to follow `Know Your Customer' (KYC) and `Anti Money Laundering' (AML) norms strictly, Indian Banks' Association (IBA) is taking initiatives to understand the problems faced by bankers while implementing these norms by strengthening their existing technological framework to detect any possible fraudulent activity.
"We are trying to understand the problems faced by bankers while enforcing KYC and AML norms," said H. N. Sinor, Chief Executive Officer (CEO), IBA. The association is organising a conference for bankers in Mumbai on Wednesday and similar ones in other cities in future. According to Mr. Sinor, banks in India can no longer afford to take a lax approach towards KYC and AML norms and the actions stipulated by the RBI against banks indicted in the recent initial public offer (IPO) scam emphasise the need for strengthening KYC and AML policies and processes in banks.
Putting in place an effective KYC and AML framework is required for cross-border correspondent banking relationships also.
Despite due diligence in KYC, "banks on their own cannot be expected to weed out all known criminals (black list) or the possible ones (watch list), as it is not their core business activity," IBA felt.
"What the banks need, therefore, is a single reliable source which can provide them with an updated list of such criminals or suspicious entities," it added.
INONU AKGUN ALP
Financial Crimes Investigation Expert
MASAK - Turkish FIU
Ministry of Finance - TURKEY