Identity checks to be mandatory for cash dealings of above Rs. 50,000

TomorrowMakers ™

Identity checks to be mandatory for cash dealings of above Rs. 50,000

24 October 2017
Banks and financial institution are now required to check IDs for cash transactions above Rs. 50,000. Here's what you need to know about the changes

The government has recently made it mandatory to check original identification proof of individuals carrying out cash transaction above the prescribed threshold limit.

This move is an amendment to the Prevention of Money-laundering rules, also called 'Maintenance of records'. The move has been initiated by the Revenue Department, under the administrative control of the Finance Ministry. The Prevention of Money Laundering Act (PMLA), governed by legal bodies of state, was brought up to combat money laundering and rising of black money. 

Related: Government makes linking Aadhaar number mandatory with several investments

What the new rule says
The reporting entity such as banks, financial institutions and intermediaries, will verify the copy of the valid identification document with the original copy. They will also maintain records and furnish information to the Financial Intelligence Unit of India (FIU-IND). 

Who all are classified as reporting entities?
Intermediaries like stockbrokers, chit fund companies, cooperative banks, housing finance institutions and non-banking finance companies are qualified as reporting entities.  

You would need to provide Aadhaar card number (or biometric identification) and other official documents to reporting entities at the time of opening an account, and also while dealing with cash transactions of Rs. 50,000 or above. 

 

Suspicious transactions
This identification will also be verified for cash transactions of more than Rs. 10 lakhs or foreign currency of the same amount. The same will be required for cash transactions involving counterfeit or forged currency notes, and suspicious transactions. 

Related: What do to do if you find yourself with fake cash

Dealing in foreign currency
You will also have to provide your identification details when carrying out wire transfers of more than Rs. 5 lakhs across countries, or purchasing or selling immovable property that is worth Rs. 50 lakhs or more. 

Prevention of Money Laundering: Rule 9
The rule states that when setting up an account-based relationship with a client, every reporting entity will have to verify their client's identity and obtain information for the same. The entity must also acknowledge the intended nature of the business relationship. 

What you need to know about linking your Aadhaar and PAN card?

Additionally, property or municipal tax receipt, pension or family pension payment orders that are given to retirees by a government body or letter of allotment of accommodation given by an employer can be used as address proof for the same. 

 

 
 

MOST VIEWED CONTENT

Simple ways in which you can diversify your financial portfolio

Simple ways in which you can diversify your financial portfolio

As an investor, diversification, when done sensibly, helps you balance out risk and optimize returns. Here are some useful tips on diversifying your financial portfolio across assets.

7 Must-have things for a frequent traveller

7 Must-have things for a frequent traveller

All smart travellers know that there are certain things they must take with them to ensure their journeys are enjoyable, safe and stress-free.

5 things you need to know about the NITI Aayog lottery

5 things you need to know about the NITI Aayog lottery

Still wondering if you should #GoCashless? This lottery scheme will help you decide.

What does it cost to educate your child in India [Infographic]

What does it cost to educate your child in India [Infographic]

Education is a gift we all want to give our children, but as it gets costlier every year, it becomes more and more essential to plan our financial from the start to ensure that we can afford to send them to quality institutions.

Locking your Aadhaar card biometrics can prevent misuse

Locking your Aadhaar card biometrics can prevent misuse

Your Aadhaar card contain sensitive data that only you should be able to use. So how do you keep this information safe.

Investing in Money markets vs capital markets

Investing in Money markets vs capital markets

Are money markets and capital markets the same thing? How do they work? Here are some things you must know about the two.

What is ASBA? All you need to know

What is ASBA? All you need to know

Everything you need to know about ASBA (Application Supported by Blocked Account) and how it helps investors.

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

NEWSLETTER