The Reserve Bank of India (RBI) has set forth guidelines for all banks and financial institutions in the country mandating them to guarantee complete information about the originator and beneficiary for all the domestic and international wire transfers in their names. This action is intended to prevent such transfers from being exploited for money laundering or terrorist financing.
Instructions regarding Know Your Customer (KYC) involving wire transfers stand amended as banks have to now align them with the Financial Action Task Force (FATF) recommendations. As per the new guidelines stipulated, all cross-border wire transfers must contain accurate, complete, and meaningful details about both the originator and beneficiary.
The RBI guidelines covering domestic wire transfers now extend to international wire transfers too. Information regarding both the originator and recipient must also be included in domestic transfers where the originator is the account holder of the originating regulated entity (RE).
Domestic wire transfers of ₹50,000 or more must include the same originator and beneficiary information as cross-border wire transfers if the originator is not an account holder of the ordering regulated body.
In addition, RBI has ordered that the full details of the remittance along with the relevant laws should be passed on to the relevant law enforcement authorities and/or prosecutors as well as the Financial Intelligence Unit of India (FIU-IND) upon receipt of the applications.
The RBI stressed that the instructions do not apply to transfers to purchase goods or services via credit card, debit card, or prepaid payment instrument (PPI).
The RBI also stated that any RE acting as an intermediary in the remittance chain should ensure that all sender and payee information related to the remittance is on the files of the remittance.