By Faisal Kamran

By FAISAL KAMRAN

KNOW YOUR CUSTOMER (CUSTOMER OR ENHANCED DUE DILIGENCE)

KYC REQUIREMENTS • Account Holder ID • NTN • Funds Transfers • Investment / Security Purchase • Compliance Program

KYC OBJECTIVES • • • • • •

Facilitate Compliance Facilitate Safe & Sound Practices Decrease the Likelihood of Abuse Protect the Reputation of the Bank Timely Detection of Suspicious Activity Reduce Risk of Seizure or Forfeiture

CONTENTS OF KYC PROGRAM • Vary Based on Institution's Size and Complexity • Nature and Extent of Activities • Levels of Risk • Delineate Appropriate Documentation Requirements

CONTENTS OF KYC PROGRAM [continued]

• Understand Intended Relationship • True Identity of Customers • • •

Source of Funds Monitoring Activity Suspicious Activity Reporting

CUSTOMER IDENTIFICATION PROCESS • Satisfactorily Establish Identity • Extent of Identification Process • Best Documents for Verifying Identity • Introductions or Referrals • Necessary Information – Minimum Threshold

NATURAL PERSON Examine and Record Primary Identification • • • • •

CNIC Drivers License Passport Any other ID Registration Card

NATURAL PERSON

[continued]

Record Primary Information • • • • • •

Name and Address National Tax Number Foreign ID Number Date of Birth Phone Numbers Bank References

NATURAL PERSON

[continued]

Examine and Record Secondary Identification • • • • •

Credit Card Employer Card Union Card Voter Registration School ID

NATURAL PERSON

[continued]

Verifying Information • • • •

Physical Observation • Telephone Book • Contacts Call Backs Third Party Checks • Credit Reports Verification Services

BUSINESS ENTITY Establish True Identity • Verify and Record Evidence of Legal Status • Verify Information About Business • Verify and Record ID of Principals • Verify Information on Principals

REVIEW-EXAMINATION CONSIDERATIONS • Internal Controls • Account Opening Procedures • Management Information and Monitoring Systems • Compliance With Laws and Regulations.

INTERNAL AUDIT CATEGORIES OF CUSTOMER RISK • Type of Customer • Products and Services • Geographical Locations

TYPE OF CUSTOMER • Cash Intensive • NBFC Activities • Financial Services – Money Transmitters – Currency Exchangers – Cash Cheques

• Non-Resident Accounts • Professional Service Providers

PRODUCTS & SERVICES • • • •

Private Banking Offshore Activity Money Transfers Monetary Instrument Sales

KYC FACILITATES SUSPICIOUS ACTIVITY REPORTING • • •

Detection Timely Reporting Controlling Risk – – – –

Reputation Compliance Civil & Criminal Liability Penalties

Thanks