Processing of Questionable transactions – Additional Due Diligence

Characteristics of MoneyTransfer Transactions which which may be termed as “Questionable”

Money Transfer Service Scheme (MTSS) is a quick and easy way of transferring personal remittances from abroad to
beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and
remittances favouring foreign tourists visiting India are permissible. No outward remittance from India is permissible under
MTSS.
Only cross-border personal remittances, such as, remittances towards family maintenance and remittances favouring foreign
tourists visiting India shall be allowed under this arrangement. Donations/ contributions to charitable institutions/t rusts, trade
related remittances, remittance towards purchase of property, investments or credit to NRE Accounts shall not be made through
this arrangement.
These guidelines are issued to ensure that person/s with malafide intentions do not misuse the MTSS channel to receive payments
in violation of the RBI guidelines, particularly to prevent (a) transactions that are arising out of consumer fraud at send-side
countries where senders are lured/ threatened into sending remittances to recipients in India; or (b) non-personal or commercial
transactions.
Typical Characteristics of Questionable transactions:
1. Transactions originating from English speaking countries: e.g. US, Canada, UK & Australia etc.
2. Senders with Western/Anglo-Saxon names sending money to receivers having Indian name (example: Michael Clarke
sending to Ajit Rahane); or
3. Sender/s having an Indian name sending money to receivers with Western/Anglo-Saxon names;
4. Senders with Western/Anglo-Saxon names sending money to receivers who have a similar Western / Anglo-Saxon name. In
most cases these beneficiaries have local KYC identification documents (example: Graeme Smith sending a remittance to
Gary Stevens, who provides Indian kyc id while collecting the payouts in India)
5. There is no apparent relationship between the sender and receiver
ADDITIONAL DUE DILIGENCE (ADD) Process required for such transactions
In addition to the collection of the normal KYC documents, the following additional documentation/ controls (additional due diligence) should be
applied for transactions meeting the above characteristics –
 KYC photo ID valid Passport or Aadhar card should be collected in addition to any other valid kyc document.
 ADDRESS PROOFCollect a copy of the latest Bank Statement or landline / mobile phone bill / electricity bill as Address proof
 Make payments only by Account Payee cheque for amounts greater than INR 9,999(In case of banks, amount can be transferred to bank
accounts of the beneficiary)
 ADD Form as per attachment to be collected for every transaction meeting the above characteristics.

Reiteration of Do’s and Don’ts :

DO’s
 Beneficiary must be physically present at the location.
 Original photographic identification and address proof should be sighted.
 All documents (identification, address proof and any other supporting document) collected from the beneficiary should be self-attested by
the beneficiary (signature in original) for each transaction.
 Copies of documents should be retained for the period required by regulations (currently 5 years).
 Ensure self-attestation signature and signature on TRM / ACR copy matches that on the ID document.
 Ensure genuineness of photographic identification/address proof documents and ensure they are valid for use on the date of transaction.
 Retain copies of any cheque issued.
 Verify contact number (mobile/Land line number) validity.
 The attached additional due diligence form is to be completed and attached to the TRM form for transactions meeting the above mentioned
characteristics.
DON’Ts
 Voter’s identification, PAN card and driver’s license or any other identification should not be accepted as additional documents
 Do not issue bearer cheques.
Important Points to Consider before paying out “questionable transactions”

 If there is no apparent relationship between the sender and receiver, then it is unlikely that such a transaction is being received by the
beneficiary for personal use. It is more likely to be a commercial transaction or also proceeds of criminal activities.
 If a beneficiary is frequently receiving such MT remittances from different senders and from different countries, the transactions are more
than likely to be commercial transaction or also proceeds of criminal activities and sub-agent should ensure compliance of these Additional
Due Diligence guidelines.
 The ADD form collected from the beneficiary should be reviewed thoroughly before payout. All relevant information has to be obtained
from the beneficiary. Necessary inquiries may be made from the beneficiary to clear doubts if any. The replies of the beneficiary should be
recorded either on the TRM or the ADD form for future reference.
 As per regulatory guidelines, only transactions that are personal in nature essentially for family maintenances are permitted.
 Commercial transactions and transactions that are for investment of any kind (including property) or for Charity / donations are strictly
prohibited. Remittances between unrelated parties could be interpreted as commercial transactions so please ensure purpose of remittance is
conclusively established as a personal / family maintenance.
 Payments to minors are not permitted.
 If you are suspicious of any transaction, do inform immediately to your Area Manager/marketing staff .