KYC norms for Foreign Portfolio Investors – Urban Cooperative Banks
RBI/2013-14/604
UBD.BPD (PCB) Cir. No. 9/14.01.062/2013-14
UBD.BPD (PCB) Cir. No. 9/14.01.062/2013-14
May 26, 2014
The Chief Executive Officer,
All AD Category I Primary (Urban) Co-operative Banks.
All AD Category I Primary (Urban) Co-operative Banks.
Madam / Dear Sir,
Know Your Customer (KYC) Norms /Anti-Money Laundering (AML) Standards/ Combating of Financing of Terrorism (CFT)/ Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002 – Harmonization of KYC norms for Foreign Portfolio Investors (FPIs) – Primary (Urban) Cooperative Banks (UCBs)
Please refer to the first Bi-Monthly Monetary Policy Statement, 2014-15 wherein, inter-alia, it has been proposed to simplify the KYC related procedure for opening bank accounts by FPIs.
2. Consequent to the Budget proposal for the year 2013-2014 and the recent amendments to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (Rules), Securities and Exchange Board of India (SEBI) has rationalised the KYC norms for entry of FPIs (vide their circular MIRSD/07/2013 dated September 12, 2013). Reserve Bank of India has been receiving suggestions regarding rationalisation of KYC norms in case of FPIs for opening bank accounts along the similar lines. The matter has since been examined in consultation with the Government and it has been decided to simplify the KYC norms in the case of FPIs.
3. FPIs have been categorized by SEBI based on their perceived risk profile as detailed in Annex I. In terms of Rule 9 (14) (i) of the Rules, simplified norms have been prescribed for those FPIs who have been duly registered in accordance with SEBI guidelines and have undergone the required KYC due diligence/verification prescribed by SEBI through a Custodian/Intermediary regulated by SEBI. Such eligible/registered FPIs may approach a bank for opening a bank account for the purpose of investment under Portfolio Investment Scheme (PIS) for which KYC documents prescribed by the Reserve Bank of India (as detailed in Annex II) would be required. For this purpose, banks may rely on the KYC verification done by the third party (i.e. the Custodian/SEBI Regulated Intermediary) subject to the conditions laid down in Rule 9 (2) [(a) to (e)] of the Rules.
4. In this regard, SEBI has been requested to advise Custodians/Intermediaries regulated by them to share the relevant KYC documents with the banks concerned based on written authorization from the FPIs. Accordingly, a set of hard copies of the relevant KYC documents furnished by the FPIs to the Custodians/Regulated Intermediaries may be transferred to the concerned bank through their authorised representative. While transferring such documents, the Custodian/Regulated Intermediary shall certify that the documents have been duly verified with the original or notarised documents have been obtained, where applicable. In this regard, a proper record of transfer of documents, both at the level of the Custodian/Regulated Intermediary as well as at the bank, under signatures of the officials of the transferor and transferee entities, may be kept. While opening bank accounts for FPIs in terms of the above procedure, banks may bear in mind that they are ultimately responsible for the customer due diligence done by the third party (i.e. the Custodian/Regulated Intermediary) and may need to take enhanced due diligence measures, as applicable, if required. Further, banks are required to obtain undertaking from FPIs or a Global Custodian acting on behalf of the FPI to the effect that as and when required, the exempted documents as detailed in Annex II will be submitted.
5. It is further advised that to facilitate secondary market transactions, the bank may share the KYC documents received from the FPI or certified copies received from a Custodian/Regulated Intermediary with other banks/regulated market intermediaries based on written authorization from the FPI.
6. The provisions of this circular are applicable for both new and existing FPI clients. These provisions are applicable only for PIS by FPIs. In case the FPIs intend to use the bank account opened under the above procedure for any other approved activities (i.e. other than PIS), they would have to undergo KYC drill as prescribed in our Master Circular UBD.BPD. (PCB).MC.No.16/ 12.05.001/ 2013-14 dated July 1, 2013 on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002.
7. UCBs may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same.
Yours faithfully,
(P.K. Arora)
General Manager
General Manager
Annex I
| Category | Eligible Foreign Investors |
| I | Government and Government related foreign investors such as Foreign Central Banks, Governmental Agencies, Sovereign Wealth Funds, International/ Multilateral Organizations/ Agencies. |
| II |
|
| III | All other eligible foreign investors investing in India under PIS route not eligible under Category I and II such as Endowments, Charitable Societies/Trust, Foundations, Corporate Bodies, Trusts, Individuals, Family Offices, etc. |
Annex II
KYC documents for eligible FPIs under PIS
| FPI Type | ||||
| Document Type | Category I | Category II | Category III | |
| Entity Level | Constitutive Documents (Memorandum and Articles of Association, Certificate of Incorporation etc.) | Mandatory | Mandatory | Mandatory |
| Proof of Address | Mandatory (Power of Attorney {PoA} mentioning the address is acceptable as address proof) | Mandatory (Power of Attorney mentioning the address is acceptable as address proof) | Mandatory other than Power of Attorney | |
| PAN Card | Mandatory | Mandatory | Mandatory | |
| Financial Data | Exempted * | Exempted * | Mandatory | |
| SEBI Registration Certificate | Mandatory | Mandatory | Mandatory | |
| Board Resolution | Exempted * | Mandatory | Mandatory | |
| Senior Management (Whole Time Directors/ Partners/ Trustees/ etc.) | List | Mandatory | Mandatory | Mandatory |
| Proof of Identity | Exempted * | Exempted * | Entity declares* on letter head full name, nationality, date of birth or submits photo identity proof | |
| Proof of Address | Exempted * | Exempted * | Declaration on Letter Head * | |
| Photographs | Exempted | Exempted | Exempted * | |
| Authorized Signatories | List and Signatures | Mandatory – list of Global Custodian signatories can be given in case of PoA to Global Custodian | Mandatory – list of Global Custodian signatories can be given in case of PoA to Global Custodian | Mandatory |
| Proof of Identity | Exempted * | Exempted * | Mandatory | |
| Proof of Address | Exempted * | Exempted * | Declaration on Letter Head * | |
| Photographs | Exempted | Exempted | Exempted * | |
| Ultimate Beneficial Owner (UBO) | List | Exempted * | Mandatory (can declare "no UBO over 25%") | Mandatory |
| Proof of Identity | Exempted * | Exempted * | Mandatory | |
| Proof of Address | Exempted * | Exempted * | Declaration on Letter Head * | |
| Photographs | Exempted | Exempted | Exempted * | |
| * Not required while opening the bank account. However, FPIs concerned may submit an undertaking that upon demand by Regulators/Law Enforcement Agencies the relative document/s would be submitted to the bank. | ||||
How to send form 16, Form 16A and other Forms automatically
Sending Form 16, Form 16A and other Forms automatically saving human Time, Energy and Resources
How can we save Time, Energy and Resources? Simple, by using the Powerful Tool Microsoft Excel!!
How to send Form
Let us say you want to send Salary Slips to Employees on a monthly basis or Form 16 to Employees on a yearly basis or Form 16A to Deductees on a quarterly basis or any other Personnel specific attachment. Many Companies/Businesses send these Forms in hard copy by couriering it to the receiving Party which calls for the Courier cost and the company's resources. Sending this via e-mail will save the courier cost and the company's resources, but still there would be human time and energy involved. Let us look at a Procedure created in Microsoft Excel which can help you minimize the human time and energy by automating the process.
Let us say you have downloaded Form16A from the TDS CPC website and are ready to send it. (Note that Form 16A can be send via e-mail only if it is digitally signed. If it is signed manually then sending a hard copy is mandatory). I have attached herewith a Sample Automated Tool wherein you just need to put in the Deductee Name, PAN Number and E-mail ID alongwith few General Details viz Assessment Year, Quarter, Location of Form 16A and the Deductor details and all the Form 16A's are sent just with a click of the Command button. Download the Excel Sheet "Sending Form 16A" (attached herewith) and follow the Instructions given in the Sheet. You can either change in the data to your Actual Data or test check the Tool with the example fed into it. For test checking the Sheet with the example fed into the Automated Tool, you also need to download the Zipped Folder "Form 16A" (attached herewith) and save it on your Desktop. Whether you are trying this Automated Tool with your own data or sample data, make sure you change the E-mail ID's (belonging to you) so that you can assess the working of the Tool.
Notes:
- Enable the Macros/Content, if it is not enabled.
- This automated tool has been created to work with Microsoft Outlook. However the same can be amended to work with any other Mail Utility that your Company/Business is using. (Ensure that your Microsoft Outlook is open)
- This tool is a sample tool which will work only for 3 examples. Put in the details of three Deductees and press the command button.
- This tool sends Attachments in PDF Form. Alternatively the tool can be amended to send Attachments in any format.
You checked the above and it works!!. So now let us see how do you send Form 16 wherein you have two Attachments to be sent to each Employee. Part A is to be downloaded from the TDS CPC website and Part B is to be prepared by the Company/Business. Once you have downloaded Form16 from the TDS CPC website and are ready with Part B; which means you are ready to send Form 16 to Employees (Note that Form 16 can be send via e-mail only if it is digitally signed. If it is signed manually then sending a hard copy is mandatory), download the Sample Automated Tool "Sending Form 16" (attached herewith) wherein you just need to put in the Employee Name, PAN Number, E-mail ID and Employee Code alongwith few General Details viz Assessment Year, Quarter and the Deductor details and all the Form 16's are sent just with a click of the Command button. Make sure that Part B prepared by your Company/Business is named in the manner as mentioned in the Instructions (If the Name of Part B is in any other Form, the Tool can be amended accordingly). It is pertinent to note that the difference between sending Form 16 and Form 16A is Form 16 has two Attachments in each mail (Part A and Part B) as against Form 16A which has only one Attachment. You can either change in the data to your Actual Data or test check the Tool with the example fed into it. For test checking the Sheet with the example fed into the tool, you also need to download the Zipped Folder "Form 16" (attached herewith) and save it on your Desktop. Whether you are trying this Automated Tool with your own data or sample data, make sure you change the E-mail ID's (belonging to you) so that you can assess the working of the Tool.
Notes:
- Enable the Macros/Content, if it is not enabled.
- This automated tool has been created to work with Microsoft Outlook. However the same can be alternatively amended to work with any other Mail Utility that your Company/Business is using. (Ensure that your Microsoft Outlook is open)
- This tool is a sample tool which will work only for 3 examples. Put in the details of three Employees and press the command button.
- This tool sends Attachments in PDF Form. Alternatively the tool can be amended to send Attachments in any format.
The due for sending Form 16 is May 31, 2014 and Form 16A is May 30, 2014.
For those who are unable to send the mail with the Attachment:
When you unzip the Folder "Form 16A", it is created as Form 16A/Form 16A/PDF Files. It is nothing but although the Folder looks Unzipped to you, the outer folder is the Zipped Folder which contains the Inner Unzipped Folder and which further contains the PDF files. This is the way Unzipping takes place in the newer version of Windows. This Utility cannot get into the Zipped file and hence the Attachment could not be sent.
What you need to do is to cut paste the Inner Folder and save it to your Desktop so that it finally reads as Form 16A/PDF files and not Form 16A/Form 16A/PDF Files and then run the Utility. The mail will be sent with the relevant Attachment.
Or you can create a New Blank folder on your desktop and name is as you want and then copy/cut paste the PDF files into this folder and copy the Location Path of this folder into the Utility. It will work.
Or try using the Actual Data by putting your Actual TDS Certificates in a New Folder.
The only reason for the Attachment not being sent is the way in which the Unzipping of the folder takes place on your PC.
You can try sending once again!! Enjoy sending the TDS Certificate!!
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