The Government has made it mandatory for banks and financial institutions to check the original identification documents of individuals dealing in cash above the prescribed threshold, to weed out the use of forged or fake copies.
The Department of Revenue in the Finance Ministry has issued a gazette notification making an amendment to the Prevention of Money-Laundering (Maintenance of Records) Rules.
The new rule now requires the reporting entity to compare “the copy of officially valid (identification) document so produced by the client with the original and recording the same on the copy”.
The Prevention of Money Laundering Act (PMLA) imposes obligation on reporting entities like banks, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to the Financial Intelligence Unit of India (FIU—IND).
Intermediaries like stock broker, chit fund company, cooperative bank, housing finance institution and non-banking finance companies are also classified as reporting entities.
Aadhaar number and other official documents are required to be obtained from anyone opening a bank account, as well as for any financial transaction of ₹50,000 and above.
