Anti-money laundering rules for urban cooperative banks

Mumbai, March 22 | Updated: Mar 23 2006, 05:30am hrs
In a notification issued for urban cooperative banks (UCB) the Reserve bank of India has laid down rules under prevention of money laundering Act (PMLA). Earlier banks were advised to put in place a policy framework within three months from the date of the circular and ensure that they were fully compliant with the provisions of the circular by December 31, 2005.

The RBI in the release said that banks should introduce a system of maintaining proper record of transactions prescribed under Rule 3. All cash transactions of the value of more than Rs 10 lakh or its equivalent in foreign currency should be recorded. Also all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security has taken place needs to be recorded. Even the suspicious transactions whether or not made in cash and by way of as mentioned in the Rules should be recorded.

Further RBI has asked the UCBs to maintain all necessary records of transactions for at least ten years from the date of cessation of transaction between the bank and the client, so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity. Finally the central bank has also asked CEOs of UCBs to personally monitor the progress and take appropriate steps to ensure that systems and procedures are put in place and instructions had percolated to the operational levels.