Page 9 - Banking Finance December 2023

RBI CORNER

Reserve Bank

News

RBI reports that over 97% "The public is asked to use the option of required to perform customer due dili-
sending the Rs 2,000 banknotes through gence (CDD).
of the Rs. 2,000 notes were India Post post offices. This will eliminate The modifications adhere to the most
returned. the requirement to visit RBI offices in recent directives from the government

Up until October 31, over 97% of the order to deposit or exchange the Rs regarding the Weapons of Mass De-
Rs 2,000 notes that were announced 2,000 banknotes," the RBI continued. struction and Their Delivery Systems
to be withdrawn by the Reserve Bank (Prohibition of Unlawful Activities) Act,
of India in May of this year had been RBI to accept Rs. 2,000 the Unlawful Activities (Prevention)
returned. Act (UAPA), and the Prevention of
notes by post.
"The total value of Rs 2,000 banknotes The RBI has requested that anyone Money-Laundering Rules.
in circulation, which amounted to Rs who is still in possession of Rs 2,000 in According to the Reserve Bank, it has
3.56 trillion as at the close of business banknotes send them to its office via also revised some guidelines to reflect
on May 19, 2023, when the with- the recommendations made by the
India Post. Although there are only Rs
drawal of Rs 2,000 banknotes was an- 10,000 crore worth of these notes in FATF.
nounced, has declined to Rs 0.10 tril- circulation, the central bank has stated "REs shall adopt a risk-based approach
lion as at the close of business on Oc- that they are still legal tender. If notes
tober 31, 2023," the Reserve Bank of and coins are sent for specified reasons for periodic updation of KYC ensuring
India stated in a statement. that the information or data collected
and follow RBI regulations, the direc- under CDD is kept up-to-date and rel-
"Thus, more than 97 per cent of the tor general of postal services may per- evant, particularly where there is high-
Rs 2,000 banknotes in circulation as on mit their transmission. risk," states the most recent Master
May 19, 2023, have since been re- Directions, which amend the risk-based
turned," said the statement. approach for periodic KYC updates.
Banks requested that KYC
The Rs 2,000 banknotes are still valid take a risk-based ap- It went on to say that in order to re-
forms of payment, the central bank re- duce the activities of "Money Mules,"
affirmed. proach. which are criminals who obtain unau-
Initially available at all bank branches The Reserve Bank strengthened the thorized access to deposit accounts
nationwide until September 30, 2023, requirements surrounding customer and use them to launder the proceeds
the option to deposit and/or exchange due diligence (or CDD). The central of fraud schemes (such as phishing and
the Rs 2,000 banknotes was later ex- bank has revised the Know Your Cus- identity theft), stringent adherence to
tended until October 7, 2023. tomer (KYC) Master Direction (MD) instructions on opening accounts and
following an evaluation. monitoring transactions is necessary.
The RBI's 19 Issue Offices are still open
for deposits and/or exchanges of the According to the procedure for their "Banks shall undertake diligence mea-
Rs 2,000 banknotes. customers, Regulated Entities (REs) are sures and meticulous monitoring to

8 | 2023 | DECEMBER | BANKING FINANCE