With the Prevention of Money Laundering (Amendment) Act,
2009 (No. 21 of 2009) coming into force from June 1, the RBI has advised all
NBFCs to maintain records of clients for a period of 10 years from the date of
transaction. The NBFCs will have to keep records of the identity of the
clients, both domestic or international, which will permit reconstruction of
individual transactions so as to provide, if necessary, evidence for
prosecution of persons involved in criminal activity.
However, records pertaining to the identification of the
customer and his address (e.g., copies of documents like passports,
identity cards, driving licences, PAN card, utility bills, etc.) obtained
while opening the account and during the course of business relationship would
continue to be preserved for at least 10 years after the business relationship
is ended as required under Rule 10.
RBI has further issued detailed guidelines on Customer Due
Diligence (CDD) measures to be made applicable to Politically Exposed Persons
(PEP) and their family members or close relatives. It is further advised that
in the event of an existing customer or the beneficial owner of an existing
account, subsequently becoming a PEP, NBFCs (including RNBCs) should obtain
senior management approval to continue the business relationship and subject
the account to the CDD measures as applicable to the customers of PEP category
including enhanced monitoring on an ongoing basis.
(Source : Internet & Media Reports, dated 17-11-2009)
