Objective

1. Objective Implementation of the following norms in the Post Offices: • Know Your Customers (KYC) • Customer Due Diligence (CDD) • For the purpose of implementations of provisions on prevention of Money laundering Act 2002 & CFT, MOF Department of Economic affairs (Budget division) has formulated the Prevention of money laundering & combating of financing Terrorism in small savings schemes. The above norms are to be applied in Post Office transactions.

2. Know your customer • Three risk categories defined • Norms for each category spelt out.

3. Three risk categories : Know your customer

4. Low Risk : Norms- Three risk categories : Know your customer

5. Medium Risk : Norms- Three risk categories : Know your customer

6. High Risk : Norms- Three risk categories : Know your customer

7. FAQs • Minors - If account/certificate holder is minor, norms are applicable to guardians • Joint Holders- In case of joint holders , norms are applicable to all joint account/certificate holders • KYC documents already submitted - Customer who have already submitted KYC documents in any purchase, need not to submit these again. Account number/purchase application number through which KYC documents were given earlier to be mentioned. Note : Name and address of the customer should match with earlier KYC Documents. • Deposit is made through agent - The agent should attest all KYC documents. In case of direct investment, self attestation or attestation by Gazetted Officer is required.

8. FAQs • Minors - If account/certificate holder is minor, norms are applicable to guardians • Joint Holders- In case of joint holders , norms are applicable to all joint account/certificate holders • KYC documents already submitted - Customer who have already submitted KYC documents in any purchase, need not to submit these again. Account number/purchase application number through which KYC documents were given earlier to be mentioned. Note : Name and address of the customer should match with earlier KYC Documents. The Supervisor to pass the remarks “KYC documents already submitted vide A/C No./Regn. No.___dated____” • Deposit is made through agent - The agent should also attest all KYC documents. In case of direct investment, self attestation or attestation by Gazetted Officer is required. • Mandatory : “KYC documents Verified and attached” needs to be written by the Supervisor on account opening form or purchase application

9. Record keeping : Documents

10. Record keeping : Documents

11. Record keeping : Preservation

12. Reporting of transactions

13. Definition of Suspicious transaction • A transaction including an attempted transaction, whether or not made in cash which, to a person acting in good faith- (i) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the schedule to the Act regardless of the value involved: or (ii) appears to be made in circumstances of unusual or unjustified complexity: or (iii) appears to have no economic rationale or bonafide purpose: or • give rise to a reasonable ground of suspicion that involve financing of the activities relating to terrorism; (v) Transaction includes deposit, w/d, exchange or transfer of funds in whatever currency, whether in cash or in cheque , payment order or other instruments or by electronic or other physical means.

14. Instructions for existing Accounts/Certificates (only in case of suspicion)

15. Instructions for existing Accounts/Certificates (only in case of suspicion)

16. Instructions for existing Accounts/Certificates (only in case of suspicion)

17. Penalty • In case of non-implementation of AML/CFT norms, a penalty from Rs.10,000 to Rs. 1,00,000 can be imposed under PML Act and rules in addition to disciplinary action.

18. Exercise 1

19. Time Deposit

20. FEATURES Any number of accounts can be opened Deposit should be in multiple of Rs.200/- and there is no maximum limit An adult, two adults jointly, minor of 10 years and above and Guardian on behalf of minor can open TD account Interest is calculated compounded quarterly and payable annually Account can be closed on maturity and unpaid interest is paid alongwith principal

21. FEATURES…. Premature closure not allowed before six months from the date of opening SB rate interest is payable if account is closed after six months and before one year Premature closure after one year from the date of deposit in 2/3/5 TD account carries and interest which shall be 1% less than the rate specified for completed years Interest already paid at higher rate should be set off against the principal / interest payable

22. FEATURES…. In case of death of depositor : Nominee can continue the account If it is closed prematurely, it will be treated as completed year TD account and interest will be paid at the rate fixed for the completed year TD account and for less than a year SB rate of interest will be paid for the completed months Post-maturity interest : If account not closed after maturity, PMI will be paid at the rate admissible to savings A/C

23. FEATURES…. Pledging TD A/C can be pledged as security as in the case of security deposit saving A/C. Procedure of opening The procedure will be similar like that of savings account KYC documents as per the risk category are required.

24. FEATURES…. Procedure of opening… If cheque is accepted, the date of realization shall be the date of opening Separate long book / LOT are generated for 1/2/3/5 TD accounts Interest is not added to the principal amount but it is shown separately both in ledger and passbook

25. Premature Closure of TD A/c After six months Interest shall be paid for completed years and month Shall carry interest 1% less than the rate specified for completed years TD Completed Years as per table Completed months as per formula RULE NO : 133 & 140 POSB Manual Volume -I

26. Premature Closure of TD A/c Period Rate (wef-1-4-13) Up to 6 M Nil 6M- 1 Yr SB rate (4%) 1Yr- 2 Yr 8.2-1 =7.2 2Yr- 3 Yr 8.3 -1=7.3 3Yr- 5 Yr 8.4 -1=7.4 RULE NO : 133 & 140 POSB Manual Volume -I

27. Final closure on maturity All Head and Sub Postmasters can close the account independently Procedure as in the case of Savings Account Interest due, if any, determined Post Maturity Interest if any to be calculated on amount due at SB rate. RULE NO : 133 & 140 POSB Manual Volume -I

28. FEATURES • Accounts can be opened at all HOs and SOs • Who can open? • Individuals can open these accounts either singly or jointly by two or three adults • Minor who has completed 10 years of age • Guardian on behalf of minor • In SB-3, depositor needs to furnish declaration in respect of balance in all MIS accounts does not exceed prescribed limit

29. FEATURES…. • Deposit • Minimum deposit is Rs.1500/- and in multiple of Rs.1500/- • Maximum deposit is Rs.4.5 lakhs and Rs.9 lakhs in single and joint account respectively • Only one deposit in an account • Interest • Monthly interest is payable on completion of a month from the date of deposit. If interest not withdrawn, no interest on interest

30. FEATURES…. • Interest… • Rate of interest -- 8.4% • Monthly interest is rounded off to the nearest rupee. • Maturity period is 5 years for the accounts opened on or after 1.12.2011 • Bonus • No Bonus is payable at the time of maturity for accounts opened on or after 1.12.2011

31. MIS- Monthly Interest Procedure as per Savings Bank Account withdrawal. Check whether interest is due. For automatic transfer, both Savings Bank Account & Monthly Income Scheme account should be in the same office Agent shouldnot act as messenger to withdraw interest PPT 5.18.1 RULE NO : 162 POSB Manual Volume -I

32. AUTO TRANSFER OF INTEREST • Authority letter is given by depositor to the postmaster for crediting MIS Interest to SB A/C. • PA prepares one withdrawal form for List of Auto Credit on the warrant side and postmaster signs it with remarks. • PA fills in foil portion of pay-in-slip for List of Auto crediting the amount of interest into savings account .

33. AUTO TRANSFER OF INTEREST • Entries in passbook are made whenever depositor presents it • In sanchay post option S.I entry available for auto entry

34. Closure of account • PMC Permitted after one year • If account is closed after one year but before three years, reduction of 2% on deposit amount and if the account is closed after three years a reduction of 1% on deposit amount • No bonus is paid in such case • Account is closed on maturity after completion of maturity period, then principal amount is paid together with admissible bonus (if any) and outstanding interest (if any)

35. POST MATURITY INTEREST • If account is not closed after maturity, PMI is paid for the completed months at the rate admissible to savings account

36. AMENDMENTSIN MIS RULES • Rate of bonus 5% has been effective from 8/12/2007 to 30/11/2011. • Auto transfer of MIS interest to Bank Account through ECS facility is available in selected HOs • Through this system interest may be transfered from PO to bank . • Facility for remittance of interest through money order available subject to certain conditions(SB order 13/2012)

37. Exercise 3

38. Senior Citizen’s Savings Scheme

39. FEATURES • Period of account is 5 years • Account can be opened through SAS who does not get commission w.e.f. 1.12.2011. • Who can open Account? • Individual who has attained the age of 60 years on the date of opening • Person who retires on superannuation

40. FEATURES…. • Who can open Account?... • Person who retires on VRS and attained the age of 55 years subject to the condition that account is opened within one month from the date of getting retirement benefits • Defense personnel who retires from service • Joint account can be opened with spouse only • The investor will be 1st holder and his wife / husband will be joint depositor

41. FEATURES…. • Depositor may operate more than one account subject to the condition that the balance in all accounts taken together shall not exceed the maximum limit • Minimum amount of deposit is Rs.1000/- and in multiple of Rs.1000/- subject to the maximum of Rs.15 lakhs or retirement benefits whichever is less • No withdrawal is permitted before 5 years • Account can be continued for a further period of 3 years by making application

42. FEATURES…. • Deposit can be made in cash or cheque • Cash can be accepted if the amount of deposit is less than Rs.1 lakh • If deposit by cheque, date of realization will be the date of deposit • Nomination facility is available • If nominee is spouse, he/she can continue the account provided he/she does not have another account in his / her name

43. FEATURES…. • Rate of interest is 9.2% • Interest is payable quarterly • If period is less than quarter, it shall be paid proportionately • If there is excess deposit in the account, the postmaster will inform the depositor to withdraw the excess deposit amount • Such excess deposit amount carries SB rate of interest • Interest paid at higher rates is recovered

44. FEATURES…. • Facility of auto-credit of interest into savings account is available • Pre-mature closure is allowed after one year from the date of opening • If account is not closed after maturity, the depositor is paid PMI @ Saving account rate • If closed after one year but before 2 years from the date of opening – deduct 1.5% on deposit. If the account is closed after 2 years – deduct 1% • Fee for duplicate passbook – first time – Rs.10/- subsequent issue – Rs.20/-

45. FEATURES…. • Account can be transferred from one PO to another and from post office to Bank. • No transfer fee for deposit amount upto Rs.99000/- • In other cases, first transfer Rs.5/- per lakh and subsequent transfer Rs.10/- per lakh

46. FEATURES…. • Interest shall be payable from the date of deposit to 31st March, 30th June, 30th Sept & 31st Dec. • If the date of payment of interest falls on holiday , the payment may be made on the previous working day. • For calculation of interest less than quarter following formula may be applied • No. of days in Period X Interest for the Quarter Total No. of days in Quarter • Interest can be remitted through Money Order and amount of commission is to be deducted from the interest • Interest payable is subject to TDS recovery unless form 15G or 15H is submitted

47. Closure Of SCSS Account Depositor to present : Fill up form-E Passbook Role of PA Examine passbook & form -E Verify balance & signature. Pass necessary remarks on form-E Postmaster will check all the records and will issue order for closure PPT 5.11.1

48. Different Forms used for SCSS form A - for a/c opening form-B - for extension of account form-C - nomination change/cancellation form form-D – pay in slip form-E- a/c closure by Depositor Form F- a/c closure by spouse/legal heir / nominee PPT 5.11.1

49. Different Forms used for SCSS Form -15-G-income certificate submitted by person aged less than 65 years Form -15 H-income certificate submitted by person aged above 65 PPT 5.11.1

50. FEATURES • Minimum Denomination Rs.10/- and thereafter in multiple of Rs.5/-. • Maximum - no limit • Maturity period 5 years. • Maturity value for Denomination of Rs.10/- Rs.746.51 / w.e.f. 1.4.2012. • Rs 744.53/ w.e.f. 1.04.2013 • Opened by any adult or minor ( 10 year) or by guardian on behalf of minor • Two adults jointly can open Account