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Staff and Customer Awareness

One of the most important controls over the prevention and detection of money laundering is to have staff members who are alert to the risks of money laundering/terrorist financing and well trained in the identification of unusual activities or transactions, which may prove to be suspicious. The effective application of even the best-designed control systems can be quickly compromised if the staff members applying the systems are not adequately trained. The effectiveness of the training will therefore be important to the success of the bank’s AML/ CFT strategy.

Training Methods

  • Induction training in money laundering prevention, recognition and reporting of suspicions and the KYC requirement should be given to relevant staff at the start of their employment in that role.
  • Relevant staff members are those who handle or are managerially responsible for handling transactions, which may involve money laundering.
  • On-going training/ information must then be given to relevant staff at appropriate intervals to keep them abreast with developments in the area of AML.

Banks need to take appropriate measures so that relevant employees are aware of,

  • Policies and procedures put in place to prevent money laundering.
  • The legal requirements contained in the PMLA and the rules and regulations framed there under.
  • KYC/ AML guidelines issued by the RBI from time to time.

Banks are required to take reasonable steps to ensure that staffs who handle or are responsible for the handling of transactions which may involve money laundering, are aware of,

  • The potential effect on the bank, on its employees and its customers, of any breach of law.
  • The identity and responsibilities of the PO.
  • Findings on countries with a poor record in their anti-money laundering legislations/ regulations and their implementation (e.g. FATF notified list of NCCT).
  • Their responsibilities under the Bank’s arrangements for money laundering prevention including those for obtaining sufficient evidence of identity, recognizing and reporting knowledge or suspicion of money laundering activity.
  • All relevant staff should be made aware of the importance of the KYC requirements for money laundering prevention purposes.

The creation of awareness and training of staff in this respect should cover,

  • The need to know the true identity of the customer.
  • Where a business relationship is being established, the need to know enough about the nature of business activities expected in relation to that customer.
  • At the outset to know what might constitute suspicious activity at a future date and the circumstances that would give rise to reasonable grounds for suspicion.