The Reserve Bank of India has said that regulated entities must provide all information related to wire transfers to relevant law enforcement and prosecutorial authorities, as well as the FIU-IND, when requested with proper legal provisions
The Reserve Bank of India (RBI) has issued guidelines to all banks and financial institutions in India to maintain complete information about the originator and beneficiary of all international wire transfers, and in case of domestic transfers, for amounts exceeding Rs. 50,000, and provide the same to the relevant law enforcement agencies when required.
This move is aimed at curbing money laundering and terror financing, the two major areas of concern for India’s financial and security apparatus.
The RBI has instructed banks to align their ‘know your customer’ (KYC) policies with the recommendations of the Financial Action Task Force (FATF). The new guidelines require all cross-border wire transfers to include accurate, complete, and meaningful information about both the originator and beneficiary. This means that banks must verify the identity of both parties involved in the transfer and ensure that their information is recorded correctly.
The RBI has further said that all relevant information about the remittance, including applicable laws, should be shared with relevant law enforcement authorities, prosecutors, and the Financial Intelligence Unit of India (FIU-IND). This is to ensure that any suspicious transactions are identified and investigated promptly.
For cross-border wire transfer, if the originator is not an account holder of the ordering regulated body, the same originator and beneficiary information must be provided, the RBI has said.
Also, the RBI’s guidelines covering domestic wire transfers have been extended to international wire transfers. This means that information about both the originator and beneficiary must be included in the transfers where the originator is the account holder of the originating regulated entity.
The RBI’s guidelines, however, do not apply to wire transfers made for the purpose of purchasing goods or services using credit cards, debit cards, or prepaid payment instruments (PPI). However, any regulated entity acting as an intermediary in the remittance chain must ensure that all sender and payee information related to the remittance is on its files.
By enforcing these guidelines, the RBI aims to strengthen India’s financial system by preventing the exploitation of wire transfers for illicit purposes. The guidelines provide a clear framework for banks and financial institutions to follow, and ensure that the relevant authorities have the information they need to identify and investigate suspicious transactions.