The Finance Ministry is likely to recommend freezing and closure of bank accounts found suspicious during the ongoing exercise by banks to collect information under the ‘Know Your Customer’ (KYC) norms.
Banks in both the national and private sector are at present undertaking a one-time exercise to ensure hundred per cent compliance of the KYC procedures from all-new and old-customers.
The KYC filing includes sharing personal and other details by a bank customer to the respective banks. All the banks have asked their customers to file fresh and updated details to help compile a fresh list of the account holders as instructed by RBI.
The KYC- suggested by banking regulator RBI to be mandatorily undertaken by all the banks- is a vital procedure adopted by the financial institutions to check money laundering and tackling of terrorist-related financing.
“Once the KYC compliance, as notified by various banks on the directions of the RBI, is completed by this month end the enforcement agencies keeping track of suspicious transactions will suggest freezing or termination of non-KYC accounts,” said a senior Revenue Department official.
Financial enforcement agencies like the Enforcement Directorate (ED) and the Financial Intelligence Unit will also have a better input of the account holder from the banks once they demand information on spotting a suspicious account or transaction, the official said.
The step is aimed at strengthening Anti-money laundering mechanism and checking terror financing through Indian banking channels, the official said.
