24-25 Promotion Material Bank of Baroda PDF

) 49 1 31 Y1.(R A Reference Study Material for Promotion Exercise of Officers...

) 49 1 31 Y1.(R A Reference Study Material for Promotion Exercise of Officers ER D 2024-25 N VI A R V A D Y A r. M y: B d de oa Baroda Academy nl ow Bank of Baroda D For internal circulation only Do Not Print unless extremely required. Save Paper, Save Trees and preserve Environment. Page 1 of 876  Disclaimer: This booklet is to supplement the learning efforts of the promotion aspirants. topics are indicative in nature and Apex Academy advises to the readers to refer to Book of Instructions, Circulars/Guidelines, etc for updated information. ) 49 This booklet is focusing mainly on the promotion exam 31 within the Bank (based on previous trends) and should not 1 Y1 be considered as an instruction manual. Employees are supposed to update themselves by reading Bank’s latest.(R circulars & Bank guidelines. Please update yourself by reading latest banking industry/ other general awareness ER related news. D N VI A R V A D YA r. M y: B d de oa nl ow D Page 2 of 876  Legal & Statutory Provisions 1. Important Acts related to Banking: 1.1 Negotiable Instruments Act, 1881: Negotiable Instrument Act 1881: At a glance – ❑ A Negotiable instrument means Promissory Note, Bill of Exchange, or Cheque ) 49 payable either to order or to the bearer. ❑ As per practice and usage and as per court decisions, certain instruments such as 31 Treasury Bills, Certificate of Deposit, Commercial Paper, Gov. Promissory Note 1 are also Negotiable instruments. Y1 ❑ Some Instrument like Railway Receipt, Bills of Lading, Warehouse Receipt etc..(R are also treated as Negotiable instruments as per Section 137 al Transfer of Property Act. ❑ The main feature of a negotiable instrument is that it in freely transferable and the ER title of the transferee will be better than transferor. D Promissory note: As per Sec 4, PN is in writing, containing unconditional N undertaking or promise, signed by the maker, to pay a certain amount of money to or VI to the order of a certain person or to the bearer thereof. It requires payment of stamp A duty and can be demand PN or usance PN. There are 2 parties (maker and payee). R Currency /Bank notes are excluded from the definition of promissory note. V A Bill of exchange: As per Sec 5. BOE s an instrument in writing containing an D unconditional order, signed by maker, directing a certain person to pay a certain sum A of money only or to the order of a certain person or to the bearer of the instrument. In Y a Bill of Exchange, the person ordering for payment is called Drawer and the person r. directed to pay is called drawee. The beneficiary is called payee. M Cheque is defined in Sec 6 of NI Act. Cheque is a bill of exchange but always y: payable on demand and drawee is always a banker. It also included truncated B cheque and electronic cheque. A cheque is similar to a Bill of Exchange. d A negotiable instrument can be payable to bearer or order. If neither bearer nor order de is written it is treated as payable to order. If both bearer or order are written it is treated as payable to bearer. oa nl Inchoate Instruments: As per section 20 of the NI Act, an instrument on which date, ow payee or amount is not mentioned is called as Inchoate or incomplete instrument. Incomplete cheque can be completed by the Holder and the completion will not be D treated as material alteration. An instrument without signatures is not treated as an instrument at all. Holder of a promissory note, bill of exchange or cheque means any person entitled Page 3 of 876  in his own name to the possession thereof and to receive the amount due thereon from parties thereto. Holder in Due Course: defined in Section 9 of the NI Act. Holder in due course is a person who became processor of a NI for valuable consideration, in good faith before becoming due, and without having any reason to believe that the person transferring the instrument was not entitled thereto. ) 49 Negotiation of Bearer Instruments: A bearer instrument is negotiated by mere 31 delivery and no endorsement is required. 1 Y1 Negotiation of an order instrument: An order instrument can be negotiated by endorsement followed by delivery. It may be noted that legal heirs cannot complete.(R the negotiation of a negotiable instrument with endorsement by the deceased merely by delivery. ER Endorsement: Signing of an instrument on the back or face thereof or on a slip of D paper annexed there for the purpose of negotiation is called endorsement (Section N 15). The person who transfers the instrument is called endorser and the person to VI whom it is transferred is called endorsee. A R Endorsement can be a Blank Endorsement (just sign at the back), Endorsement in full (Indicates the name of endorsee), Conditional Endorsement ( impose a condition V A by endorser), Restrictive Endorsement (restricts further negotiation), Sans Recourse D Endorsement (excludes endorser liability). Y A Payment of cheques: A paying banker gets protection under Section 85 of the NI Act. r. M Payment in Due Courses: As per Sec 10, a payment would be considered in due y: course it. (a) Payment as per apparent tenor of instrument; (b) Payment in good faith B and without negligence; (c) payment to person in possession of instrument d) d payment under circumstances which do not afford a reasonable ground for believing de that he is not entitled to receive payment of therein. oa Form of The cheque has not been given in the Act. It is simply a practice. However, nl RBI has prescribed formats per new cheque standards CTS 2010 and all banks providing cheque facilities to their customers, will issue only CTS-2010' standard ow cheques across the country. D Different ink: A cheque can be drawn in different inks, handwritings of different script. Thus, a cheque is presented with different ink, handwriting script can be paid. Language: The cheque should be written in Hindi, English or Regional languages. Page 4 of 876  Bank is within its powers to return a cheque written in a language other than the language of that region. Signatures on Back: When a cheque is presented for payment, signatures of the presenter are taken on the back as a witness of payment. If the presenter refuses to sign, the bank can take receipt on a separate paper. ) 49 Date of the cheques can be: ❑ Ante dated: Cheque dated prior to its date of presentation. It is a valid cheque and 31 can be paid. 1 ❑ Post dated- Cheque dated subsequently to the date of presentation. Y1 ❑ Stale Cheque- As per RBI guidelines , a cheque becomes stale after. months of its issue..(R ❑ Impossible date- Line 31.11.2019. It should be paid on the last day of the month or within 3 months of the last day of the month. ER ❑ Cheque date is of holiday. Like 15.08.2019. It is valid cheque and can be paid before it becomes stale. D N The amount written in words is called legal amount and amount written in figures is VI called courtesy amount. A R As per Sec 18 of NI Act, if the amount written in words and figures differ, the amount written in words should be paid. In practice, the cheque is returned with reason” V Amount in words and figures mismatch”. A D A Banking Hours: The payment of a cheque should be made only during banking Y hours otherwise it will not be a payment in due course. However, the payment of a reasonable amount can be made to drawer even after banking hours.In our bank it is r. M Rs.5000/- as per books of instruction. y: Mutilation: if there is any mutilation of cheque, it should be confirmed by drawer or B by collecting banker. d de Material alteration: Any change in date, amount or name of payee is called material alteration. The change from order to bearer, or cancellation of crossing or converting oa special crossing to general crossing is also material alteration. However, bearer to nl order of completing an incomplete cheque is not material alteration. If there is any material alteration on a choque can be paid only after confirmation from drawer ow under his full signatures. D General Crossing: Crossing is of two types - General or special crossing. If there are two transverse lines anywhere on the face of cheque it is called General Crossing. The parallel lines can be with words and company or & co or not contain any word. (See 123). For General crossing parallel lines are must. Any other thing is Page 5 of 876  not so material. A cheque on which name of some station like Indore is written between two parallel lines will be called Generally crossed cheque. Crossing is direction of drawer to paying banker. Accordingly, crossed cheque can be paid to or through a bonk only in cash or through clearing) and not across the counter, to payee or holder. A cheque wh General Crossing should be paid only to a bank. Special Crossing # name of a bank is written on the face of a cheque with or ) 49 without two parallel transverse lines it is called special crossing (Section 124). Parallel lines are not necessary. The name of bank can be written anywhere on the 31 face of a cheque. Specially Crossed cheque can be paid only to the bank whose 1 name is mentioned on the cheque. A cheque crossed to two banks has to be Y1 returned unpaid unless crossed by one bank to another as his agent for collection..(R RBI has directed banks not to collect “account payee” was for any person other than the payee. RBI has clarified that the practice of collecting third party account ER payee cheques on behalf of co-operative credit societies who are their constituents can be allowed it the amount is up to Rs 50,000. D N Payment cannot be made in case of (a) death, insolvency.insanity of customer or VI insolvency of partner or liquidation of company (b) stop payment (c) receipt of A garnishee attachment order (d) post dated cheque (e) stale cheque. However, R payment can be made in case of death of agent authorized signatory of a company, agent appointed by a customer, trustee, office bearer of society or club etc.) where V A cheque is not dated prior to date of authority to the agent and subsequent to date of D death. Y A As per section 138 deals dishonor of Cheque for insufficiency etc. of funds in the account. Where any cheque drawn by a person on account maintained by him with a r. M banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned y: by the bank unpaid, either because of the amount of money standing to the credit of B that account is insufficient to honor the cheque or that it exceeds the amount d arranged to be paid from that account by an agreement made with that bank, such de person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may oa be extended up to two years, or with fine which may extend up to twice the amount nl of the cheque, or with both. The Provisions of the Article is also applicable in bouncing of cheques due to stop payment Instructions. ow D In accordance with section 143A of the Amendment Act, any court while trying an offence for dishonour of a cheque can now direct the drawer, who is the issuer of the cheque, to pay interim compensation to the complainant. Under this section of the Amendment Act, the court now has the authority to direct such interim compensation in circumstances of a summary trial or a summons case wherein the drawer pleads Page 6 of 876  to be not guilty and upon the framing of any other charge. The amount of compensation payable cannot exceed 20% of the amount as stated in the cheque. This amount has to be paid within a stipulated time period of 60 days from the date of the order passed by the court, or further within the extended period of 30 days, as may be directed by the court on showing sufficient cause for the delay caused. On acquittal of the drawer, the court will consequentially direct the complainant to pay the drawer the prescribed amount along with the interest. The interest will be levied ) 49 at the rate which was prevalent at the beginning of the financial year. As per the section such recovery of the payment has to be made within a time period of 60 days 31 in furtherance to a delay of 30 days.It has to be further noted that the final 1 compensation if awarded to the complainant on the disposal of the case, will be after Y1 the deduction of the interim compensation..(R Section 148 of the Amendment Act provides that in the event of the conviction of the drawer of the cheque, if the drawer proceeds to file an appeal, the appellant ER court has the power to order the drawer of a cheque to deposit an amount. This deposited amount has to be a minimum of 20% of the fine or compensation awarded D by the Magistrate Court in the appeal preferred against his/her conviction. This N amount can be ordered anytime during the pendency of the appeal. The procedure VI relating to payment of the above stated fine and refund of the same if the appeal A succeeds, is similar to what has been laid down in Section 143A of the Amendment R Act. V 1.2 Indian Contract Act, 1872: A Banking involves interaction between a banker and customer. A customer of a bank D may be a depositor, borrower or any other person merely utilizing one of the various A services provided by the banker. The interaction of a bank with its customer creates Y certain obligations and gives certain rights to both the bank and the customer. r. “All Agreements are contracts, if they are made by parties competent to contract, for M a lawful consideration and with a lawful object, and are not expressly declared to be y: void.” B All Banking transactions are therefore, separate contracts and the knowledge of d Indian Contract Act is essential for each Banker. de Section124. "Contract of indemnity" defined- oa “A contract by which one party promises to save the other from loss caused to him nl by the contract of the promisor himself, or by the conduct of any other person, is ow called a "contract of indemnity". D Sec. 126 "Contract of guarantee", "surety", "principal debtor" and "creditor" - A "contract of guarantee" is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee Page 7 of 876  is called the "surety", the person in respect of whose default the guarantee is given is called the "principal debtor", and the person to whom the guarantee is given is called the "creditor". A guarantee may be either oral or written. Section 148. ‘Bailment’, ‘bailor’ and ‘bailee’ defined. - A ‘bailment’ is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or ) 49 otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the ‘bailor’. The person to whom they are 31 delivered is called the ‘bailee’. 1 Y1 Section 172. "Pledge", "Pawnor", and "Pawnee" defined -.(R The bailment of goods as security for payment of a debt or performance of a promise is called "pledge". The bailor is in this case called "pawnor". The bailee is called "pawnee". ER Section 182. "Agent" and "principal" defined - D N An "agent" is a person employed to do any act for another, or to represent another in VI dealing with third persons. The person for whom such act is done, or who is so A represented, is called the "principal".] R In form of Indian Contact (Amendment) Act, 2017 Chapter VI A (Special Provision V relating to Farming Contracts) have been inserted containing Section 75A to 7L. A D 1.3 Indian Partnership Act, 1932: Y A A partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting or all. In India it is r. governed by the Indian Partnership Act, 1932, and came into force on 1st October M 1932. In the usual business of the partnership. y: According to Companies Act 2013, the number of partners in any association shall B not exceed 100. However, the rules given under Companies (Miscellaneous) Rules, d 2014 restrict the present limit to 50. de Dissolution of a firm: A firm may be dissolved in the following manner: oa Dissolution by Court nl Dissolution by agreement ow Dissolution by operation of law Dissolution on the happening of certain contingencies D Dissolution by notice The minimum number of partners is 2. As per Companies Act 2013, maximum partners can be 100. Who can become a partner: An individual other than Minor , partnership firm, Page 8 of 876  limited company. Who can not become a partner: Minor , insolvent, insance can not become partner because they are not competent to contract As per Supreme Court Judgment , HUF cannot become partner as HUF cannot be liable for action of others. As per RBI, NBFC cannot become partner. Registration of a partnership is optional. ) 49 1.4 Reserve Bank of India Act, 1934: 31 The Act was enacted on 6th March, 1934 to constitute the Reserve Bank of India 1 and came into force on 01.04.1935 and has been amended from time to time to Y1 meet the demands of changing times..(R RBI was established on the recommendations of the the Hilton Yong Commission. As per Section 24: RBI can issue bank notes of denomination of2, 5, 10, 20, 50, 100, ER 500, 1000, 2000, 5000, 10000. D As per Section 31: No person other than RBI/Central Govt. can draw , accept, make N /issue Bill of Exchange , Hundi or Promissory note payable to bearer on demand. VI A Important rates: R Bank Rate: Section 49 defines it as “The Standard Rate at which it (the bank) is V prepared to buy or rediscount bills of exchange or other commercial paper eligible for A purchase under this Act”. The present bank rate is 6.15%. D A Cash Reserve Ratio: Section 42(1) defines the Cash reserves of scheduled bank Y to be kept with RBI. Every scheduled bank has to maintain with RBI an average daily r. balance the amount of which shall not be less than 3% of the total demand and time M liabilities and shall not exceed 15%. Presently the CRR is 4.50%. y: Statutory Liquidity Ratio (SLR):According to Section 24 (2-a) of the Banking B Regulation Act, every banking company in India whether scheduled or non- scheduled, is required to maintain in India in Cash, Gold or unencumbered, d approved securities an amount of which is not less than a certain percentage of the de total of its demand and time liabilities in India. This is known as Statutory Liquidity Ratio (SLR). The ratio keeps on changing time to time. At present SLR is 18.00 %. oa nl 1.5 Banking Regulation Act, 1949: ow Some of the important provisions of the Act affecting day-to-day transactions at branches are discussed hereunder. The amendments made operative by the D Banking Laws (Amendment) Act, 1981 have also been incorporated herein. As per section 20, a bank cannot grant loans or advances on the security of its own shares. As per section 24, banks are required to maintain SLR Statutory Liquidity Ratio) Page 9 of 876  Barks should transfer to RBI monthly all deposits which have not been operated/claimed for the last 10 years. (Section 26 A). Section 45 Y: Power granted to Central Govt. to make rules for preservation of records Section 45Z: Return of paid instruments to customers after keeping a true copy of such instruments ) 49 Section 45ZA to 45 ZF relate to Nomination in deposits, safe custody and locker 31 accounts. 1 1.6 Companies act, 2013: Y1 In India, now companies are governed by Companies Act, 2013. Now All the.(R companies are required to be registered under Companies Act, 2013. A company is a juristic person created by law, having a perpetual succession and common seal distinct from its members. Section 11 of the Companies Act provides that an ER Association or Partnership consisting of more than 10 in the case of Banking Business and more than 20 in the case of other business shall be registered under D N the companies act. If not registered, the said association or partnership will be VI illegal. A The business and the objects of a company and the rules and regulations governing R its management is known by two important documents called Memorandum of Association and Article of Association. V A Registration of charges: D A Under Section 125 of the Act, the following charges created by a company, whether Y public or private, on the security of its property or undertaking are void against the r. liquidator and/or any creditor of the company unless the prescribed particulars of M charge together with the instrument, if any, by which the charges are created or evidenced or a copy thereof verified in the prescribed manner are filled with the y: concerned Registrar of Companies within -30- days from the date of its creation. B As may be observed, equitable-mortgage created by deposit of title deeds, though d without any instrument evidencing the charge, requires registration. However, a de charge created by pledge of movables does not require registration. oa nl Highlights of Companies Act 2013: ow Immediate Changes in letterhead, bills or other official communications, as if full name, address of its registered office, Corporate Identity Number (21 D digit number allotted by Government), Telephone number, fax number, email ID, website address if any. One Person Company (OPC): It's a Private Company having only one Member and at least One Director. No compulsion to hold AGM. Conversion Page 10 of 876  of existing private Companies with paid-up capital up to Rs 50 Lacs and turnover up to Rs 2 Crores into OPC is permitted. Woman Director: Every Listed Company /Public Company with paid up capital of Rs 100 Crores or more / Public Company with turnover of Rs 300 Crores or more shall have at least one Woman Director. Resident Director: Every Company must have a director who stayed in India for a total period of 182 days or more in previous calendar year. ) 49 Accounting Year: Every company shall follow uniform accounting year i.e. 1 st April -31st March. 31 Loans to director – The Company CANNOT advance any kind of loan / 1 guarantee / security to any director, Director of holding company, his partner, Y1 his relative, Firm in which he or his relative is partner, private limited in which he is director or member or any bodies corporate whose 25% or more of total.(R voting power or board of Directors is controlled by him. Articles of Association- In the next General Meeting, it is desirable to adopt ER Table F as standard set of Articles of Association of the Company with relevant changes to suite the requirements of the company. Further, every D copy of Memorandum and Articles issued to members should contain a copy N of all resolutions / agreements that are required to be filed with the Registrar. VI Disqualification of director- All existing directors must have Directors A Identification Number (DIN) allotted by central government. Directors who R already have DIN need not take any action. Directors not having DIN should initiate the process of getting DIN allotted to him and inform companies. The V Company, in turn, has to inform registrar. A Financial year- Under the new Act, all companies have to follow a uniform D Financial Year i.e. from 1st April to 31st March. Those companies which A follow a different financial year have to align their accounting year to 1st April Y to 31st March within 2 years. It is desirable to do the same as early as r. possible since most of the compliances are on financial year basis under the M new Companies Act. y: Appointment of Statutory Auditors- Every Listed Company can appoint an individual auditor for 5 years and a firm of auditors for 10 years. This period of B 5 / 10 years commences from the date of their appointment. Therefore, those d companies have reappointed their statutory auditors for more than 5 / 10 de years; have to appoint another auditor in Annual General Meeting for year 2014. oa Constitution of National Financial Reporting Authority (NFRA). NFRA to nl perform its functions through such divisions as may be prescribed by the Central Government. ow D 1.7 Goods & Service Tax Act 2016 GST: Goods and Services tax, commonly known as GST, is an indirect tax regime which is levied on manufacture, sales and consumption of goods as well as on the services at a National level. Page 11 of 876  GST regime has put an end to multiple taxes like Excise, VAT, Service Tax, Luxury Tax, and Entertainment Tax, Octroi etc. which were levied on different products and services by both Central and State Governments. GST is a dual taxation regime, where taxes are levied on the basis of place of consumption/ destination. There are three elements of tax under GST: ) 49 a) Central Goods and Service Tax (CGST) : This would become part of revenue of 31 the Central Government 1 b) State/Union Territory Goods and Service Tax (SGST/UTGST): This would form Y1 part of revenue for State/Union Territory Government.(R c) Integrated Goods and Service Tax OGST): This would initially go to the Central Government and then will be distributed to the State/UT governments. ER For all the services provided by our bank, the rate of tax remains constant at 18%, but D the same will be bifurcated into 9% each for CGST and SGST, wherever applicable. N VI The determination of the element of GST to be levied on a particular transaction is based A on the location of supplier of services and on the location of receiver of those services. R V If the supply of services is within the state then CGST and SGST/UTGST would A be levied. D A On the other hand if the supply of services is outside the state, then IGST would Y be levied. r. The GST council has finalised a four tier GST tax structure of 5%, 12%, 18% and 28%, M with the lower rates for essential items and the highest rates for luxury and de-merit y: goods including luxury cars, tobacco etc. Rates of tax applicable to a particular good B can be identified on the basis of the HSN code (a unique code allotted to each good & d de service) of the product. Services, however, are taxed at the rate 18%. oa 10 important key changes in GST notified with effect from 1st October 2022 nl 1. New restrictions on the claim of Input Tax Credit : - ow Availment of ITC now needs an extra caution. Safeguard to choose a vendor with proper established credentials alone will help in enjoying the facility of ITC without litigations. D 2. Extension of Time Limit to avail ITC: - The extension of time limit would apply for ITC and credit notes attributable to Financial Year2021-22 also though the changes have come into force w.e.f. 01- 10.2022. Page 12 of 876  3. Cancellation of GST Registration for non-filing of Return : - If monthly return filler does not file return for a continuous period of 6 months or if quarterly return filler does not file return for a continuous period of two tax periods then registration can be cancelled. 4. Changes in Statement of Outward Supply – GSTR 1 : - It is now compulsory that the Statement of outward supply (known as GSTR-1 Return) must be filed in chronological order. 5. Other Changes in GST Returns: ) 49 - Late fee for delay in filling of TCS Return has being introduced. 6. Claiming Input Tax Credit on Self-Assessment basis: 31 - Every Taxpayer’s self-assessed ITC will be credited to GST PMT-02 1 7. Refund GST more facilities: Y1 8. Consequences of not paying the vendor in time under GST - The Taxpayer need to pay tax along with interest from now on, if one have.(R availed ITC but failed to pay the supplier within 180 days from Invoice date. 9. Two way communication and matching concepts are omitted - The forms GSTR-2 and GSTR-3 have never been notified, the matching ER concept and the two-way communication process in return filing etc. is now omitted. 10. QRMP dealers: QRMP optees can now pay taxes on a self-assessment basis or D in an alternate way that the government will prescribe later. N VI 1.8 Registrar of Companies A Registrars of Companies (ROC) appointed under Section 609 of the Companies Act, R covering the various States and Union Territories are vested with the primary duty of V registering companies and LLPs floated in the respective states and the Union A Territories and ensuring that such companies and LLPs comply with statutory D requirements under the Act. These offices function as registry of records, relating to A the companies registered with them, which are available for inspection by members Y of public on payment of the prescribed fee. The Central Government exercises r. administrative control over these offices through the respective Regional Directors. M The charge of the financing Institutions on the assets of the company are required to y: be registered with the ROC within 30 days from the date of creation of charge. If the B charge has remained to be created within the stipulated time of 30 days, then also d the charge can be created by paying the additional fee by way of penalty. de oa 1.9 Central Registry (CERSAI) Central Registry of Securitization Asset Reconstruction and Security nl Interest (CERSAI) is a central online security interest registry of India. It is primarily ow created to check frauds in lending against equitable mortgages, in which people would avail multiple finances against the same asset from different banks. D CERSAI's mandate is to maintain a centralized data bank of equitable mortgages created and registered where it contains information on the equitable mortgage taken on a property along with details of the financial institution that has extended Page 13 of 876  the loan as well as details about the borrower. CERSAI also allowed lenders to register transactions of securitization and asset reconstruction. Under the provisions of Section 23 of the SARFAESI Act, 2002 particulars of any charge creating the security interest over property is required to be filed with the registry (the timeline within 30 days from the date of creation is omitted w.e.f 24.01.2020). It means a timeline of 30 days is removed. ) 49 1.10 SARFAESI Act 2002 31 This Act gives powers of “seize and desist” to banks. Banks can give a notice in 1 writing (By Authorised officer) to the defaulting borrower requiring it to discharge its Y1 liabilities within 60 days (Section 13 (2)). If the borrower fails to comply with the notice, the Bank may take recourse to one or more of the following measures.(R (Section 13 (4): A-take possession of the security for the loan B-Sale or lease or assign the right over the security ER C-Manage the same or appoint any person to manage the same. D This act also provides for establishment of Asset Reconstruction Companies (ARCs) N regulated by RBI to acquire assets from Banks and Financial Institutions. The Act VI provides for sale of financial assets by Banks and Financial Institutions to Asset A Reconstruction Companies. RBI has issued guidelines to Banks on the process to be followed for sale of financial assets to ARCs. R V 1.11 THE INSOLVENCY AND BANKRUPTCY CODE, 2016 A D This act was passed by Parliament on 16.05.2016 to consolidate and amend A the laws relating to reorganization and insolvency resolution of corporate persons, Y partnership firms and individuals in a time bound manner for maximization of value of r. assets of such persons, to promote entrepreneurship, availability of credit and M balance the interests of all the stakeholders. This act proposes to establish INSOLVENCY & BANKRUPTCY BOARD to make a paradigm shift from the existing y: ‘Debtor in possession’ to a ‘Creditor in control’ regime. National Company Law B Tribunal will be the adjudicating authority under the aforesaid. This ACT envisages a “creditor in control” regime with financial creditors exercising control through IPs in d the event of a single default in repayment of any loan or interest. This can be de affected without any notice and the law is very stringent as compared to the SARFAESI Act, 2002. oa nl Key points: ow A. Corporate Insolvency Resolution Process Application on default – Any financial or operational creditor(s) can apply for insolvency on default of debt or interest payment subject to minimum monetary limit. D Appointment of Insolvency Professional – IP to be appointed by the regulator and approved by the creditor committee. IP will take over the running of the Company. From date of appointment of IP, power of Board of directors to be suspended and Page 14 of 876  vested in the IP. IP shall have immunity from criminal prosecution and any other liability for anything done in good faith Moratorium period – Adjudication authority will declare moratorium period during which no action can be taken against the company or the assets of the company. Key focus will be on running the Company on going concern basis. A Resolution plan would have to be prepared and approved by the Committee of creditors. Credit committee - A credit committee of creditors will be constituted. Related party to be excluded from committee. Each creditor shall vote in accordance to voting ) 49 share assigned if 75% of creditor approve the resolution plan same needs to be implemented. 31 B. Liquidation Process 1 Initiation – Failure to approve resolution plan within specified days will cause Y1 initiation of Liquidation. Debtor can also opt for voluntary liquidation by a special resolution in a General Meeting. Liquidator – The IP may act as the liquidator, and.(R exercise all powers of the Board of Directors. The liquidator shall form an estate of the assets, and consolidate, verify, admit and determine value of creditors’ claims ER Order of priority for distribution of assets D Insolvency related costs Secured creditors and workmen dues up to 24 months N VI Other employee’s salaries/dues up to 12 months Financial debts (unsecured creditors) A Government dues (up to 2 years) R Any remaining debts and dues V Equity A D A 1.12 CHEQUE TRUNCATION SYSTEM: CTS 2010 Y Truncation is the process of stopping the flow of the physical cheque issued by a r. drawer to the drawee branch. The physical instrument will be truncated at some M point en-route to the drawee branch and an electronic image of the cheque would be sent to the drawee branch along with the relevant information like the MICR fields, y: date of presentation, presenting banks etc. B The images captured at the presenting bank level would be transmitted to the d Clearing House and then to the drawee branches with digital signatures of the de presenting bank. Thus, each image would carry the digital signature, apart from the oa physical endorsement of the presenting bank, in a prescribed manner. The physical instruments are required to be stored for a statutory period. It would be obligatory for nl presenting bank to warehouse the physical instruments for that statutory period. In ow case a customer desires to get a paper instrument back, the instrument can be sourced from the presenting bank through the drawee bank. D Page 15 of 876  Features of CTS-2010 Standard Cheques: A. Features Visible through Naked Eye: 1) Watermark of Bank's logo and Bank name (Dandy) are available for verification against light or through UVR machine. CTS India water mark visible against light or through UVR machine. ) 49 2) Uniform /standard field placement for Date/Payee Name/Amount in words/Drawer account number etc. in bilingual form. 31 3) Background colour of the cheques: At present background colour of the cheques 1 for different segment of accounts is as under: Y1.(R For SB Account: Light gray For CA/OD Account: Light orange For CC Account:Light blue ER 4) Majority of the cheques are with printed account numbers and name of the Drawer. Cheques with Account number and other details stamped are to be dealt D more carefully. N VI 5) New Rupee Symbol in separate box preceding amount in figures. A R 6) Printers name on the left side with CTS 2010 identification. V 7) RTGS/NEFT/IFSC Code: - Original cheques should have 11 (Eleven character) A with "BARB" followed by 0(zero) and branch 6 digit ALPHA code. If the branch D ALPHA is less than 6 character the last field will have XXX's. Y A B. Features Visible through UVR: r. M 1) Watermark of Bank's logo and Bank name in English and Hindi are available for y: verification against light or through UVR machine. B 2) CTS India water mark visible against light or through UVR machine. d de 3) UV logo:- Our Bank logo printed with special ink visible only through UVR machine. oa C. Other Features: nl ow 1) Void Pantograph: - Rectangular space below the Account number field with "VOID" hidden/embedded. While the word VOID is hidden in all original cheques, the D same is visible in all photocopies. (If cheque is not genuine, word VOID cannot be visible in photocopy.) 2) Micro Lettering i.e. lines provided for "Payee Name" and "Amount" are printed with "BANK OF BARODA" that can be visible through magnifying glass only. In addition Page 16 of 876  to existing micro lettering feature i.e., printing of Bank's name (BANK OF BARODA), "Account Number" of customer is also being printed on personalized cheque. 3) Background of the cheque (Logo & BANK OF BARODA) is printed with washable ink. (Even a small drop of water will wash ink of original cheque, while this will not in case of scanned/xerox cheque.) In view of collecting banks responsibility under CTS clearing outward clearing cheques should also be scrutinized for genuineness at locations where CTS clearing is implemented. ) 49 1.13 Banking Ombudsman Scheme 2006 31 1. The Ombudsman Scheme has been started by RBI under section 35 A of BR 1 Act. Y1 2. Applicable all Scheduled Commercial Banks including Private sector banks.(R and foreign Banks (including J&K State) 3. Ombudsman is appointed by RBI. The appointment will be for 3 years at a time. ER 4. Scope - Complaints relating to deficiency in service in deposit, ancillary services, non adherence of RBI guidelines on advances, delay in sanction or D disbursement, time schedules, credit card and direct selling agents. The N scope of scheme has been extended to internet banking, violation of code of VI banking services, A 5. Before making a complaint to the Ombudsman, the complaint will be made to R the bank. The complainant can file the complaint with the Ombudsman if no V reply is received within one month of lodging the complaint with bank or reply A received is not satisfactory. D 6. Maximum period within which complaint can be filed is 1 year from the date of A receiving the reply from bank. In case reply is not received from the bank, Y complaint can be lodged within 13 months from the date of making the r. complaint to the bank. M 7. Ombudsman will not entertain a complaint where (a) case is pending in the court (1) case has already been the decided by the court (iii) similar case has y: already been decided Ombudsman. B 8. Procedure: On receipt of complaint views of bank called to promote d settlement by agreement. If not settled within 1 month, Ombudsman shall de announce award. Role of the Ombudsman is that of Arbitrator with mutual consent. oa 9. Maximum amount of award: Rs 20 lakh. In addition to this, award up to Rs 1 nl lakh for mental agony. ow 10. In case of credit card maximum claim is Rs 1 lakh. 11. The complainant should accept the award within 30 days of receipt of the D copy of the award. The award shall not be binding on a bank unless the complainant gives acceptance within 30 days from the date of receipt of copy of award. Page 17 of 876  12. If complainant accepts the award, the bank should implement the award within 1 month of receipt of acceptance from the complainant and intimate compliance to the Banking Ombudsman. 13. If Ombudsman rejects the complaint or award is not acceptable to the complainant, he can file an appeal to the Appellate authority (Deputy Governor, RBI) within 30 days of the of the date of receipt of communication regarding award or rejection of the complaint. ) 49 14. Bank may also file appeal with Deputy Governor, RBI within thirty days from the date on which the bank receives letter of acceptance of Award by 31 complainant, 1 15. In the case of bank, appeal may be filed by a bank only with the previous Y1 sanction of the CMD or ED or CEO of the bank. 16. Non-implementation: If award is not implemented, report to Customer.(R service committee of the Board and make disclosure in balance sheet of the bank. ER 1.14 Integrated Ombudsman Scheme, 2021 – Overview D N Centralised processing of complaints: All the complaints submitted through VI electronic or physical mode to the Centralised Receipt and Processing Centre shall be assigned to the Offices of the Ombudsman for further examination. Hence, the A complaints may be received at any of the Nodal Offices irrespective of the territorial R jurisdiction. V Timelines for submission of reply: 15 days A The Ombudsman may, at the request of the Bank in writing to the D satisfaction of the Ombudsman, grant such further time as may be deemed fit A to file its written version and documents. Y On verification of replied submitted by both the parties, Banking r. Ombudsman may M Reject the complaint, y: Pass an advisory, or Pass an award B Bank may accept the ward/file an appeal against the Award. d There shall be no right of appeal to the Bank in respect of the de Award issued on account of non-response or non-furnishing of oa information sought within the stipulated time. Appellate Authority for filing Appeal - Executive Director in-Charge of nl the Department of the Reserve Bank ow Competent Authority to accord permission to file an Appeal: Chairman or the Managing Director / Chief Executive Officer or, in their absence, the D Executive Director / Official of equal rank. Page 18 of 876  2 Know Your Customer (KYC) Guidelines: Reserve bank of India has now come out with guidelines for “KNOW YOUR CUSTOMER” (KYC) with a view to put in place systems and procedures to help control frauds, identify money laundering and suspicious activities and for scrutiny /monitoring of large value transactions. The guidelines are also applicable to foreign currency accounts / transactions. The four pillars under the policy ) 49 a) Customer Acceptance Policy - c) Risk Management ( MLRC) b) Customer Identification procedure d) Monitoring of transactions 31 a. Reports to be furnished to FIU-IND Bank follows the detailed guidelines contained on compilation and 1 Y1 manner/procedure of submission of following reports prescribed by FIU-IND and ensure for its error free and timely submission to them..(R a. Cash Transactions Report (CTR) b. Suspicious Transactions Report (STR); c. Counterfeit Currency Report (CCR); ER d. Non-Profit Organizations Transactions Report (NTR) e. Cross-Border Wire Transfer Report (EFT) D a) Cash Transaction Reports (CTRs): N VI Bank files following types of Cash Transactions to FIU-IND, New Delhi. - All cash transactions of the value of more than Rupees Ten Lakh or its A equivalent in foreign currency; R All series of cash transactions integrally connected to each other which have V been valued below Rupees Ten Lakh or its equivalent in foreign currency A where such series of transactions have taken place within a month and the D aggregate value of such transactions exceed Rupees Ten Lakh; A Time Schedule for Filing Cash Transaction Reports (CTR) Y The Cash Transaction Report (CTR) for each month for Bank as a whole is r. submitted to FIU-IND by 15th of the succeeding month as advised by Reserve Bank M of India. y: In order to ensure above time schedule, various offices are required to ensure B following time schedule: Data Centre submits CTRs for branches invariably on monthly basis (not on d de fortnightly basis) by 04th of the succeeding month to Head Office in text format by e-mail. oa The Principal Officer of the bank ensures submission of CTRs for entire bank every month to FIU-IND within the prescribed time schedule i.e. by 15th of the nl succeeding month. ow b) Suspicious Transaction Reports (STRs): D Bank files all suspicious transactions as mentioned in the PMLA Rules to Financial Intelligence Unit – India (FIU-IND). While determining suspicious transactions, bank is guided by definition of suspicious transaction contained in PMLA Rules as amended from time to time. Bank also files Suspicious Transaction Reports (STR) to FIU-IND for Mobile Banking Transactions as in case of normal banking transactions. Page 19 of 876  Definition of Suspicious Transaction in PMLA Rules: “Suspicious Transaction" means a transaction whether or not made in cash which, to a person acting in good faith – Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or Appears to be made in circumstances of unusual or unjustified complexity; or Appears to have no economic rationale or bonafide purpose; or ) 49 d. Gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism. 31 It is likely that in some cases transactions are abandoned / aborted by customers on 1 Y1 being asked to give some details or to provide documents. Branches should report all such attempted transactions through the menu “AMLALERT” and Regional.(R Offices should file STRs on these attempted transactions, even if not completed by customers, irrespective of the amount of the transaction. Indicative List of Suspicious Activities: Did you know? ER Branches should do STR Transactions Involving Large Amounts of Cash through menu “AMLALERT D Transactions that do not make Economic Sense based on 47 behavioural Alerts. N Activities not consistent with the Customer’s Business VI Attempts to avoid Reporting/Record-keeping Requirements. Unusual Activities Customer who provides Insufficient or Suspicious A Information. R Certain Suspicious Funds Transfer Activities V Certain Bank Employees arousing Suspicion A D List of alert Indicators of suspicious activities/transactions to be monitored by the A operating staff at branch level: Y Time Schedule for Filing Suspicious Transaction Reports (STR): r. M Bank will adhere to the following time schedule and procedure for reporting STRs to y: FIU-IND: B a) The Suspicious Transaction Report (STR) will be furnished within -7- days of d arriving at a conclusion that any transaction, whether cash or non-cash, or a series de of transactions integrally connected are of suspicious nature. The Principal Officer will record his reasons for treating any transaction or a series of transactions as oa suspicious. It will be ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received from the Regional nl Offices. ow Regional Office will submit the STRs to the Principal Officer after validation in four D days of arriving at a conclusion that any transaction is suspicious one. b) Counterfeit Currency Reports (CCRs) All cash transactions, where forged or counterfeit Indian currency notes have been used as genuine will be reported by the Principal Officer (PO) to FIU-IND in the Page 20 of 876  specified format (Counterfeit Currency Report – CCR) by 15th of the succeeding month. These cash transactions will also include transactions where forgery of valuable security or documents has taken place and will be reported in the form as prescribed by bank to FIU-IND for the present. d) Non-Profit Organisation Transaction Report (NTR) The report of all transactions involving receipt by non-profit organizations of value more than rupees ten lakh or its equivalent in foreign currency is being submitted ) 49 every month to the Director, FIU-IND by 15th of the succeeding month in the prescribed format. 1 31 e) Cross-border Wire Transfer Report (EFT) Y1 Cross-border Wire Transfer Report is required to be filed with FIU-IND by 15th of.(R succeeding month for all cross border wire transfers of the value of more than five lakh rupees or its equivalent in foreign currency where either the origin or destination of fund is in India. The Principal Officer at Head Office submits EFT to the Director ER FIU-IND, New Delhi. D The objectives of the KYC framework: N To ensure appropriate customer identification. In this connection branches to obtain VI all information necessary to establish the identity /legal existence of each new A customer, based preferably on disclosures by customers themselves. Mainly, KYC R norms are for V (1) Identification of the customer, A D (2) Proper introduction of the customer and Y A (3) monitoring of large value transactions. r. Customer Identification – M a) Customer identification means undertaking client due diligence measures y: while commencing an account-based relationship including identifying and B verifying the customer and beneficial owner on the basis of one of the Officially Valid Documents (OVDs). d b) Bank has a policy approved by its Board which clearly spells out the de Customer Identification Procedure to be carried out at different stages i.e., While establishing an account-based relationship with the customer; oa Carrying out any international money transfer operations for a person who is nl not an account holder of the Bank; When the branch has a doubt about the authenticity or adequacy of the ow customer identification data it has obtained; When branches sell third party products as agents; D While selling bank’s own products, payment of dues of credit cards/sale and re-loading of prepaid/ travel cards and any other product for more than Rs.50,000/- While updating identification data of the existing customer at prescribed Page 21 of 876  intervals. While carrying out transactions for a non-account based customer i.e. a walk- in customer, where the amount involved is equal to or exceeding Rs. 50,000/- whether conducted as a single transaction or several transactions that appear to be connected; When a branch has reason to believe that a customer (account-based or walk-in) is intentionally structuring a transaction into a series of transactions below the threshold of Rs.50,000/- ) 49 The branches to undertake periodical updation of KYC data (including photograph/s) 31 after the accounts are opened. The periodicity of such updation should not be less than once in five years in case of low risk category customers and not less than once 1 Y1 in two years in case of high and medium risk categories..(R It has also been advised to enter all relevant information pertaining to customer and account in Finacle and update CBS data regularly. In order to comply with the ER guidelines and ensure perfection in KYC and CBS data (report can be generated through RPTRA). D N KYC guidelines regarding enrichment of Beneficial Owner information. VI The Beneficial Owner are identified in Non-Individual account (other than A proprietorship, listed public limited companies, Government Organization including R PSUs), as following:- V Where the customer is a company: The Beneficial Owner is the natural person(s), A who, whether acting alone or together, or through one or more juridical person, has a D controlling ownership interest or who exercises control through other means. A Explanation- For the purpose of this sub clause- "Controlling ownership interest" Y means ownership of or entitlement to more than 10% of shares or capital or profits of r. the company; M Where the customer is a partnership firm: The Beneficial Owner is the natural y: person(s), who, whether acting alone or together, or through one or more juridical B person, has/have ownership of/entitlement to more than 10 per cent of capital or profits of the partnership. d de Where the customer is an unincorporated association or body of individuals: The Beneficial Owner is the natural person(s), who, whether acting alone or together, oa or through one or more juridical person, has/have ownership of/entitlement to more than 15 per cent of the property or capital or profits of the unincorporated association nl or body of individuals. ow Explanation: Term 'body of individuals' includes societies. Where no natural person D is identified under (a), (b) or (c) above, the Beneficial Owner is the relevant natural person who holds the position of senior managing official. Where the customer is a trust: The identification of Beneficial Owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with 10 % Page 22 of 876  or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership. Branches are aware that they have to identify all the BO in the account and to complete Customer due diligence process also for all BOs as being carried out for individual customers. ) 49 As per circular issued by KYC-AML department, Branches are also advised to ensure following: 31 1 Identification of Beneficial owner is required for accounts of all Non Y1 individual entities including advance accounts. All granular information is enriched in the system related to Beneficial Owner after.(R carrying out customer due diligence and obtaining their complete KYC information. Create the customer ID of Beneficial Owner mandatorily even if it is not ER authorized signatory and to be linked with the account as BO. Branch to also obtain the Beneficial Owner’s declaration from the entity and D Branch to satisfy upon the Information provided by the customer. The same should be kept on record. N VI A Enrichment of Beneficial owner information in Finacle :-. R (Ref: HO:BR:112:213, Dt: 22/05/2020) V As per the guidelines information of beneficial owner in case of non- individual A entities(other than proprietorship, Government accounts) have to be D enriched/identified in finacle through HACM menu -> Related party Tab -> A designation code field and Code "BO" = "Beneficial owner" is to be selected from Y drop down list. r. The branches have to enrich beneficial owner information only under designation code and even if the information is already available in Relation Code field, the M same needs to be enriched again in designation code field, after which the y: process of identification of BO will be completed. B Freezing and Closure of Non- Compliant Accounts: d de Branches shall opt for a phased closure of operations in this account as explained below: oa 1. Branches shall ‘Debit freeze’ such Non- KYC Compliant Accounts after giving two notices of minimum 07 days period each to the customers to comply with nl KYC requirements. Thereafter, ‘Debit freezing’ should be imposed. ow 2. 2.Even after debit freezing of the account if the customer is not turned up to the Bank, branch/office may also cease the operations in the account or close D the account after giving final notice of minimum 15 days period. 3. 3.The account holders shall have the option, to revive their accounts by submitting the KYC documents 4.On closure of the account the customer shall be communicated on his/ her valid Page 23 of 876  e-mail address/ mobile number registered with the bank. In case where wrong credits are received in the Non-KYC compliant freezed accounts, Regional Manager is empowered to make a request to DGM, Data Center for unfreezing of such accounts for reversal of such entry as a special case on one time basis. When the branches believe that it would no longer be satisfied about the true ) 49 identity of the account holder, it should submit a Suspicious Transaction Report (STR) to HO for onward filing the same with Financial Intelligence Unit- 31 India(FIU-IND). 1 Y1 Small Accounts: In case an individual customer who does not have Aadhaar/enrolment number.(R and PAN and desires to open a bank account, banks shall open a ‘Small Account’. ER In ‘Small Account’ means a saving bank account in which: The aggregate of all credits in a financial year does not exceed rupees one lakh D The aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand and N VI The balance at any point of time does not exceed rupees fifty thousand. Not to allow Foreign Inward remittance A R A small account shall remain operational initially for a period of twelve months, and thereafter for further period of twelve months if the holder of such an account V A provides evidence, before the bank, of having applied for any of the OVDs within D twelve months of the opening of the said account, with the entire relaxation A provisions to be reviewed in respect of the said account after twenty four months. Y Procedure to be followed in respect of foreign students: r. Branches should follow the following procedure for foreign students studying in India: M a.Branches may open a Non Resident Ordinary (NRO) bank account of a foreign y: student on the basis of his/her passport ( with appropriate visa & immigration B endorsement) bearing the proof of identity and address in the home country along with a photograph and a letter offering admission from the educational institution in d India provided: de i. Branches should obtain a declaration about the local address within a period of - oa 30 days of opening the account and verify the said local address. nl ii. During the 30 days period, the account should be operated with a condition of ow allowing foreign remittances not exceeding USD 1,000 or equivalent into the account and a cap of monthly withdrawal to Rs. 50,000/-, pending verification of D address. On receipt of proof of current address, the account would be treated as a Normal NRO account and should be operated in terms of Reserve Bank of India instructions on Non-Resident Ordinary Rupees (NRO) Account, and the Page 24 of 876  provisions of FEMA, 1999. Students with Pakistani nationality will need prior approval of the Reserve Bank for opening the account. Simplified norms for Self-Help Groups (SHGs) (Ref: HO:BR:113:85 Dt 08/04/2021) CDD of all the members of SHG shall not be required while opening the savings ) 49 bank account of the SHG. CDD of all the office bearers shall suffice. 31 CDD of all the members of SHG, as per the CDD procedure may be undertaken 1 at the time of credit linking of SHGs. Y1 Financial Intelligence Unit (FIU-IND).(R It was setup in Nov.2004 and reports directly to the Economic Intelligence Council headed by Finance Minister. The responsibility of FIU includes collecting, analysing and sharing of information acting as a central repository and coordinating with local ER and overseas agencies involved in anti- money laundering activities. D N E-KYC:- Acceptance of E-KYC as a process for KYC is launched by UIDAI-Unique VI Identification authority of India is a valid process for KYC verification.The information authenticated & transferred by UIDAI carrying demographic details & photograph as A a result of E-KYC Process shall be treated as sufficient proof of identity. E-KYC is R also accepted as a valid proof of identity for opening of Basic SB a/c at BC/KIOSK V level. A CKYC: - Central KYC Registry is a centralized repository of KYC records of D customers in the financial sector with uniform KYC norms and inter-usability of the A KYC records across the sector with an objective to reduce the burden of producing Y KYC documents and getting those verified every time when the customer creates a r. new relationship with a financial entity.(HO: BR: 108:129 dated 06.08.2016). M The OVD (Officially Valid Documents) are: y: Passport/ Driving License with photo, Aadhaar card issued by the UIDAI, Voter ID B issued by the Election commission of India, job card under NREGA issued by the d State Governments, de Registration certificate of the firm issued by the Municipal corporation under the oa Shops and establishment Act, Certificate of incorporation in case of companies, Sales Tax/ IT returns, in case of corporate a/cs. nl List of ‘Officially Valid KYC Documents’ for Account Opening must be obtained from ow the customers to verify the identity and address of the customers. It must be noted that only the documents mentioned in the list provided by the RBI would be accepted D by the branches while opening of any new account. Branches would not have the discretion to accept any other document for this purpose. The RBI also enforces the compliance of stipulated norms in respect of Forex transactions by the banks. Page 25 of 876  Anti Money Laundering: It is conversion of money, which is illegally obtained, so as to make it appear to originate from a legitimate source. The main objective of the Act is: 1. To prevent, combat and control money laundering. 2. To confiscate and seize the property obtained from the laundered money. ) 49 3. To deal with any other issue connected with money laundering in India. 31 There are three independent steps or stages in Money Laundering -- Placement, Layering and Integration 1 Y1 A) Placement - physical disposal of bulk cash proceeds derived from illegal activity B) Layering - process of separation of illicit proceeds from their source by creating.(R complex layers of financial transactions it conceals the audit trail. C) Integration– re-injection of laundered proceeds back to the economy ER Punishment: Whoever commits the offence of money laundering shall be punished D with the rigorous punishment for a term not less than 3 years but which may extend N to 7 yrs and shall also liable to fine, which may extend to Rs.5 lacs. (HO: BR: VI 109:153 dated 01.09.2017 –KYC guidelines, Anti Money Laundering /CFT & A Obligations under PMLA Act 2002 -Master Circular). R Some more ACTS V A 1.16 FATCA- (Foreign Account Tax Compliance Act): D FATCA is an acronym for Foreign Account Tax Compliance Act, a new set of US Tax A Regulations brought in by the US Government to prevent the tax evasion by US Y Nationals and the same enacted through the Internal Revenue Services (IRS). r. FATCA promotes cross border tax compliance by implementing an international M standard for the automatic exchange of information related to US taxpayers. FATCA regulations require tax authorities obtain detailed account information for US y: taxpayers on an annual basis. FATCA is intended to increase transparency for the B Internal Revenue Service (IRS) with respect to US persons that may be investing d and earning income through non-US institutions. While the primary goal is to gain de information about US persons, FATCA imposes tax withholding where the applicable documentation and reporting requirements are not met. oa CRS: CRS stands for Common Reporting Standards. The primary role of CRS is to nl combat the problem of offshore tax evasion and avoidance/stashing of unaccounted ow money abroad through mutual exchange of information among countries. 98 countries are members of CRS. D Now FATCA CRS information can also be submitted through Baroda Connect. (BCC:BR:111:247 dated 31.05.2019) FATCA details in CBS is managed