RBI updates KYC instructions on wire transfers for banks, institutions

The Reserve Bank on Thursday instructed banks and other financial institutions to ensure cross-border as well as domestic wire transfers contain complete information about the originator and beneficiary.

The central bank has updated instructions in the Master Direction on Know Your Customer (KYC) related to wire transfers and also aligned the same with the relevant recommendation of the Financial Action Task Force (FATF).

“All cross-border wire transfers shall be accompanied by accurate, complete, and meaningful originator and beneficiary information…,” as per the updated instructions in the Master Direction.

Also, domestic wire transfers, where the originator is an account holder of the ordering regulated entity (RE), should be accompanied by originator and beneficiary information, as in the case of cross-border wire transfers.

“Domestic wire transfers of Rs 50,000 and above, where the originator is not an account holder of the ordering RE, shall also be accompanied by originator and beneficiary information as indicated for cross-border wire transfers,” the RBI said.

‘Ordering RE’ refers to the financial institution which initiates the wire transfer and transfers the funds on behalf of the originator.

The RBI further said REs should make available all the information on the wire transfers to appropriate law enforcement and/or prosecutorial authorities as well as FIU-IND on receiving such requests with appropriate legal provisions.

The latest instructions, however, are not intended to cover any transfer that flows from a transaction carried out using a credit card, debit card, or Prepaid Payment Instrument (PPI) for the purchase of goods or services.

RBI further said RE processing an intermediary element of a chain of wire transfers should ensure that all originator and beneficiary information accompanying a wire transfer is retained with the transfer.