Foreign Account Tax Compliance Act (FATCA) is a US Law that requires foreign financial institutions to identify and report on the assets held by US account holders through enhanced due diligence reviews and report them periodically to the U.S. The report is in line with local FATCA regulations, based on citizenship. The purpose of FATCA…
Correspondent banking refers to a banking relationship between two banks, where one bank (the “correspondent bank”) provides banking services to another bank (the “respondent bank”), allowing the respondent banks to access services in foreign markets. Correspondent Banking relationships are essential in facilitating the cross-border payment system and vital to international trade and investments. A risk-based…
The Financial Action Task Force (FATF) is an international policy-making and standard-setting body dedicated to tackling money laundering, terrorist, and proliferation financing. It is a global money laundering and terrorist financing watchdog that sets international standards that aim to prevent these illegal activities and the harm they cause to society. The FATF constantly identifies and…
Enhanced due diligence (EDD) is a set of additional measures that financial institutions have to implement to check and monitor high-risk customers and unusual transactions for potential money laundering and terrorist financing (ML/TF) activities. Enhanced due diligence (EDD) is an in-depth KYC process that can help to identify high-risk customers including politically exposed persons (PEPs).…
Money laundering is the process wherein criminals attempt to conceal their booty and make an attempt to cover them as a legitimate source of income. The bill on money laundering described it as an offence (i) when a crime has been committed. (ii)There are proceeds or gains from the crime. (iii) There is a transaction…
In the realm of risk management and compliance, Customer Due Diligence (CDD) is a pivotal player. The Customer Due Diligence meaning, often abbreviated as CDD, is a process that financial institutions, businesses, and other organisations use to gather information about their customers and clients to identify and mitigate risks such as money laundering, financing terrorism,…
Anti-Money Laundering (AML) regulations in India are governed by the PMLA (Prevention of Money Laundering Act, 2002), which requires financial institutions and other entities to implement robust measures to detect and prevent money laundering activities. The PMLA lays down the broad framework for AML compliance requirements applicable to banking companies, financial institutions, and other intermediaries.…
Banks in India offer a wide range of banking services to their customers, such as savings and Current Accounts, loans (personal, business, and mortgages), debit cards, ATMs, credit cards, export credits, corporate and retail lending, investment services, Treasury operations, and electronic banking options like UPI, ECS, mobile banking, NEFT, and RTGS, SWIFT & ISO 20022 messages,…
A deposit generally refers to money held in a customer’s bank account. Banks offer different types of deposit accounts to their customers with diverse features. Let us understand the types of accounts available to Bank customers Savings account Savings Bank (SB) accounts are opened mainly for saving purposes. Customers cannot open an SB account for…
Indemnity is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims. There are generally two parties in indemnity contracts. Someone who promises to protect or compensate another person if he suffers any loss or damage is the indemnifier…
