The Department of Posts has issued a notification stating that certain categories of investors who wish to invest in small saving schemes will now need to provide income proof.
This step has been taken to combat the issues of money laundering and terrorism financing.
The circular emphasizes the adoption of Anti-Money Laundering (AML) measures in post offices,
in accordance with the guidelines of the Financial Intelligence Unit – India (FIU-IND) and the Financial Action Task Force (FATF).
Revised guidelines on Customer Due Diligence (CDD) and Combating the Financing of Terrorism (CFT) norms will also be issued.
The objective behind implementing Know Your Customer (KYC)/Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) guidelines is
to prevent criminal elements from using Post Office Savings Bank for money laundering or terrorist financing activities, whether knowingly or unknowingly.
By following KYC procedures,
Post Office Savings Banks can gain a better understanding of their customers, enabling them to manage risks effectively.
Customers will be classified into three categories based on their risk level:
- low risk
- medium risk
- high risk
For customers falling under the high-risk category,
in addition to providing a photograph and identity proof, proof of the source of funds will also be required.
These measures aim to ensure the integrity and security of small saving schemes and protect against illicit activities.
