(l) In these rules, unless the context otherwise requires,-
(a) "Act" means the Prevention of Money-laundering Act, 2002 (15 of 2003);
4[(aa) "Central KYCRecords Registry" means a reporting entity, substantially owned and controlled by the Central Government, and authorised by that Government through a notification in the Official Gazette to receive, store, safeguard and retrieve the KYC records in digital form of a client as referred to in clause (ha) in such manner and to perform such other functions as may be required under these rules;]
5[(aaa) "Aadhaar number" means an identification number as defined under sub-section (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016;]
5[(aab) "authentication" means the process as defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016;]
5[(aac) "Resident" means an individual as defined under sub-section (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016;]
1. Vide G.5.R. 444(E), dated 1st July, 2005, published in the Gazette of India, Extra., Pt. II, Sec. 3(i), dated 1st July, 2005.
2. Subs. by G.S.R. 481(E), dated 24th June, 2011, for "Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules" (w.e.f. 24-6-2011). .
3. Came into force on 1-7-2005.
4. Ins. by G.5.R. 544(E), dated 7th July, 2015 (w.e.f. 7-7-2015).
5. Ins. by G.5.R. 538(E), dated 1st June, 2017 (w.e.f. 1-6-2017).
74 The Prevention of Money-laundering (Maintenance of Records) 75 Rules, 2005 l[(aad) "identity information" means the information as defined in subsection (n) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016;]
l[(aae) "e - KYCauthentication facility" means an authentication facility as defined in Aadhaar (Authentication) Regulations, 2016;]
l[(aaf) "Yes/No authentication facility" means an authentication facility as defined in Aadhaar (Authentication) Regulations, 2016;]
2[(b) "client due diligence" means due diligence carried out on a client referred to in clause (ha) of sub-section (1) of section 2 of the Act;]
3[(ba) "Designated Director" means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under Chapter IV of the Act and the Rules and includes-
(i) the Managing Director or a whole-time Director duly authorized by the Board of Directors if the reporting entity is a company,
(ii) the managing partner if the reporting entry is a partnership firm,
(iii) the proprietor if the reporting entity is a proprietorship concern,
(iv) the managing trustee if the reporting entity is a trust,
(v) a person or individual, as the case may be, who controls and manages the affairs of the reporting entity if the reporting entity is an unincorporated association or a body of individuals, and
(vi) such other person or class of persons as may be notified by the Government if the reporting entity does not fall in any of the categories above. ,
Explanation.-For the purpose of this clause, the terms "Managing Director" and "Whole-time Director" shall have the meaning assigned to them in the 4[Companies Act, 2013 (18 of 2013)];]
5[(bb) "Designated Officer"means any officeror a class of officersauthorized by a banking company, either by name or by designation, for the purpose of opening small accounts.]
(c) "Director" means the Director appointed under sub-section (1) of section 49 of the Act for the purposes of 6[sections 12, 12A and 13] of the Act;
1. Ins. by G.S.R. 538(E), dated 1st June, 2017 (w.e.f. 1-6-2017).
2. Subs. by CS.R. 576(E), dated 27th August, 2013, for clause (b) (w.e.f. 27-8-2013).Clause (b), before substitution, stood as under:
'(b) "client" means a person that engages in a financial transaction or activity with a banking company, or financial institution or intermediary and includes a person on whose behalf the person that engages in the transaction or activity, is acting;'.
3. Ins. by C.S.R. 576(E), dated 27th August, 2013 (w.e.f. 27-8-2013).
4. Subs. by CS.R. 544(E), dated 7th July, 2015, for "Companies Act, 1956 (1 of 1956)" (w.e.f.
7-7-2015).
5. Ins. by G.S.R. 980(E), dated 16th December, 2010 (w.e.f. 16-12-2010).
6. Subs. by CS.R. 576(E), dated 27th August, 2013, for "sections 12 and 13" (w.e.f.
27-8-2013).
76 [Rule 2The Prevention of Money-laundering (Maintenance of Records) Rules, 2005 l[(ca) "Know Your Client (KYC)Identifier" means the unique number or code assigned to a client by the Central KYCRecords Registry;]
l[(cb) "Know Your Client (KYC)records" means the records, including the electronic records, relied upon by a reporting entity in carrying out client due diligence as referred to in rule 9 of these rules;]
l[(cc) "last KYCverification or updation" means the last transaction made by a reporting entity in the Central KYCRecords Registry by which the KYC records of a client were recorded, changed or updated by a reporting entity;]
2[3[(cd)] "non profit organisation" means any entity or organisation that is registered as a trust or a society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a company registered under 4[section 8 of the Companies Act, 2013 (18 of 2013)];]
(d) "officiallyvalid document" means 5[thepassport, the driving licence, the Voter's Identity Card issued by Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, the letter issued by the National Population Register containing details of name, address or any other document as notified by the Central Government in consultation with the Regulator]:
6[Providedthat where simplifiedmeasures are applied for verifying the identity of the clients the following documents shall be deemed to be officiallyvalid documents:-
(a) identity card with applicant's Photograph issued by Central/State Government Departments, Statutory IRegulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;
(b) letter issued by a gazetted officer,with a duly attested photograph of the person:]
7[Provided further that where simplified measures are applied for verifying the limited purpose of proof of address of the
1. Ins. by C.5.R. 544(E), dated 7th July, 2015 (w.e.f. 7-7-2015).
2. Ins. by C.s.R. 816(E), dated 12th November, 2009 (w.e.f. 12-11-2009).
3. Clause (ca) re-numbered as clause (cd) thereof by C.s.R. 544(E), dated 7th July, 2015 (w.e.f.
7-7-2015).
4. Subs. by C.s.R. 544(E), dated 7th July, 2015, for "section 25 of the Companies Act, 1956 (1 of 1956)" (w.e.f. 7-7-2015).
5. Subs. by C.s.R. 538(E), dated 1st June, 2017, for "the passport, the driving licence, the Permanent Account Number (PAN) Card, the Voter's Identity Card issued by Election Commission of India, job card issued by NRECA duly signed by an officer of the State Covernment, the letter issued by the Unique Identification Authority of India or the National Population Register containing details of name, address and Aadhaar number or any other document as notified by the Central Government in consultation with the Regulator". (w.e.f.
1-6-2017).Earlier these words were amended by C.5.R. 980(E), dated 16th December, 2010 (w.e.f. 16-12-2010),by C.S.R. 576(E), dated 27th August, 2013 (w.e.f. 27-8-2013)and by C.S.R.
544(E), dated 7th July, 2015 (w.e.f. 7-7-2015).
6. Ins. by C.S.R. 576(E), dated 27th August, 2013 (w.e.f. 27-8-2013).
7. Ins. by C.S.R. 288(E), dated 15th April, 2015 (w.e.f. 15-4-2015).
Rule 2] The Prevention of Money-laundering (Maintenance of Records) Rules, 2005 77 clients, where a prospective customer is unable to produce any proof of address, the following documents shall be deemed to be 'officially valid document':
(a) utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, Water bill);
(b) property or Municipal tax receipt;
(c) bank account or Post Office savings bank account statement;
(d) pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
(e) letter of allotment of accommodation from employer issued by State or Central Government departments,. statutory or regulatory bodies, public sector undertakings, scheduled commercialbanks, financial institutions and listed companies.
Similarly, leave and licence agreements with such employers allotting official accommodation; and 1[(£)***] 2[Provided also that in case the officially valid document presented by a foreign national does not contain the details of address, in such case the documents issued by the Government departments of foreign jurisdictions and letter issued by the Foreign Embassy or Mission in India shall be accepted as proof of address.]
3[Explanation.-For the purpose of this clause, a document shall be deemed to an "officially valid document" even if there is a change in the name subsequent to its issuance provided it: is supported by a marriage certificate issued by the State Government or Gazette notification, indicating such a change of name.]
(e) "prescribed value" means the value of transaction prescribed under these rules;
(f) "Principal Officer" means an officer designated by a 4[reporting entity];
5[(fa) Regulator means-
(i) a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the ------
1. Clause (f) omitted by G.S.R. 1318(E),dated 23rd October, 2017 (w.e.f. 23-10-2017).Clause (f), before omission, stood as under:
"(f) documents issued by Government departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission in India.".
2. Ins. by G.S.R. 1318(E),dated 23rd October, 2017 (w.e.f. 23-10-2017).
3. Ins. by G.S.R. 730(E), dated 22nd September, 2015 (w.e.f. 22-9-2015).
4. Subs. by G.5.R. 576(E), dated 27th August, 2013, for "banking company, financial institution or intermediary, as the case may be," (w.e.f. 27-8-2013).
5. Subs. by G.5.R. 347(E), dated 12th April, 2017, for clause (fa) (w.e.f. 12-4-2017).Earlier clause
(fa)was inserted by G.S.R.816(E),dated 12th November, 2009 (w.e.f. 12-11-2009)and amended by G.S.R 576(E), dated 27th August, 2013 (w.e.f. 27-8-2013).Clause (fa), before substitution, stood as under:
"(fa) "Regulator" means a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the activity of reporting entities or the Director as may be notified by the Government for a specific reporting entity or a class of reporting entities or for a specific purpose;".
The Prevention of Money-laundering (Maintenance of Records) Rules, 2005 [Rule 278 activity of reporting entities or the Director as may be notified by the Government for a specific reporting entity or a class of reporting entities or for a specific purpose;
(ii) the Reserve Bank of India with respect to Central KYC Records Registry as defined in clause (aa) of sub-rule (1) of rule 2;]
1[(iii) the Directorate General of Goods and Service Tax intelligence with respect to Gems and Jewellery Sector.]
2[(faa) "Rules" means the Prevention of Money-laundering (Maintenance of Records) Rules, 2005;]
3[(fb) "small account" means a savings account in a banking company where-
(i) the aggregate of all credits in a financial year does not exceed rupees one lakh,
(ii) the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand, and
(iii) the balance at any point of time does not exceed rupees fifty thousand:]
4[Provided that this limit on balance shall not be considered while making deposits through government grants, welfare benefits' and payment against procurements.]
5[(g) "suspicious transaction" means a transaction referred to in clause (h), including an attempted transaction, whether or not made in cash, which to a person acting in good faith-
(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or
(b) appears to be made in circumstances of unusual or unjustified complexity; or
(c) appears to have no economic rationale or bona fide purpose; or
(d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism;]
6[Explanation.- Transaction involving financing of the activities relating to terrorism includes transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organisation or those who finance or are attempting to finance terrorism.]
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1. Ins. by G.S.R. 1057(E),dated 23rd August, 2017 (w.e.f. 23-8-2017).
2. Ins. by G.5.R. 576(E), dated 27th August, 2013 (w.e.f. 27-8-2013).
3. Ins. by G.S.R. 980(E), dated 16th December, 2010 (w.e.f. 16-12-2010).
4. Ins. by G.S.R. 1038(E),dated 21st August, 2017 (w.e.f. 21-8-2017).
5. Subs. by G.5.R. 816(E), dated 12th November, 2009 for clause (g) (w.e.f. 12-11-2009).Earlier clause (g) was amended by G.S.R.389(E),dated 24th May, 2007 (w.e.f. 24-5-2007).Clause (g), before substitution by G.S.R. 816(E), stood as under:
"(g) "suspicious transaction" means a transaction whether or not made in cash which, to a person acting in good faith-
(a) gives rise-to a reasonable ground of suspicion that it may involve the proceeds of crime; or
(b) appears to be made in circumstances of unusual or unjustified complexity; or
(c) appears to have no economic rationale or bona fide purpose; or
(d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism;". .
6. Ins. by G.S.R. 508(E), dated 16th June, 2010 (w.e.f. 16-6-2010).
Rule 3] The Prevention of Money-laundering (Maintenance of Records) Rules, 2005 l[(h) "transaction" means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof and includes-
(i) opening of an account;
(ii) deposits, withdrawal, exchange or transfer of funds in whatever currency, whether in cash or by cheque, payment order or other instruments or by electronic or other nonphysical means;
(iii) the use of a safety deposit box or any other form of safe deposit;
(iv) entering into any fiduciary relationship;
(v) any payment made or received in whole orin part of any contractual or other legal obligation;
(vi) any payment made in respect of playing games of chance for cash or kind including such activities associated with casino;
and
(vii) establishing or creating a legal person or legal arrangement.]
(2) All other words and expressions used and not defined in these rules but defined in the Act shall have the meaning respectively assigned to them in the Act.