| SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES | VOL. 1 | NO. 2 | PAPER 1 |
|---|---|---|---|
| KNOW YOUR CUSTOMER | |||
| RM.Chidambaram | |||
| Professor and Head, Department of Bank Management, Dean, Faculty of Management, Alagappa University, Karaikudi, India. | |||
| Banks form the nerve center of an economy. They channelise the funds for nation’s development. The primary motive of any bank is to widen its customer base. Of late, attempts are made to misuse the banking channels for the violation of fiscal laws and evasion of taxes. The RBI has initiated the principle of “Know Your Customer”(KYC) with a view to safe-guarding banks from being unwittingly used for the transfer or deposit of funds derived from criminal activity (both in respect of deposit and borrowal accounts) or for financing terrorism. The RBI, as part of its KYC principle, issued several guidelines relating to the identification of customers and advised the banks to place systems and procedures to control financial frauds, identify money laundering and suspicious activities and for scrutiny/ monitoring of large value cash transactions. This paper attempts to discuss the principles of KYC. | |||
| KEYWORDS: KYC, Bank, Customers | JEL CLASSIFICATIONS: D11, G21 | FULL TEXT |