This Policy is intended to serve as a further guide to SIAO Partners/ the Firm on the procedures necessary for the proper knowledge of their customers/ clients.

There is no doubt that having sufficient information about our clients and making use of that information is the most effective weapon against being used to launder the proceeds of crime. In addition to minimizing the risks of being used for illicit activities, it provides protection against fraud, reputational and financial risks and enables individual financial institutions to recognize suspicious activities.

SIAO Partners will not establish a business relationship until all relevant parties to the relationship have been identified, and the nature of the business they intend to conduct has been ascertained. Once an on-going business relationship has been established, any inconsistent activity can then be examined to determine whether there is a suspicion of money laundering.

The first requirement of knowing our clients for money laundering purposes is for SIAO Partners to be satisfied that a prospective client is who he/she claims to be.

SIAO Partners will not carry out, or agree to carry out financial or business activities, or provide advice to a client or potential client, unless they are certain as to who that person actually is. If the client is acting on behalf of another, e.g. the funds are being supplied by someone else, or the investment is to be held in the name of someone else then SIAO Partners has the obligation to verify the identity of both the client and the agent/trustee unless the client is itself a Nigerian regulated financial institution.

Although SIAO Partners as designated non-financial institution has the duty to obtain evidence in respect of their customers, there are certain exceptions to this duty. However, since exceptions are difficult to apply, SIAO Partners are advised to identify all relevant parties to the relationship from the outset. The general principles and means of obtaining satisfactory identification evidence are also set out below.

Sufficient information will be obtained on the nature of the business that the client is undertaking or intends to undertake, including the expected or predictable pattern of transactions.

The information collected at the outset for this purpose will include: purpose and reason for establishing the relationship; nature of the activity that is to be undertaken; expected origin of the funds to be used during the relationship; and details of occupation/employment/business activities and source(s) of wealth or income.

Reasonable steps shall be taken to keep the information up-to-date as the opportunities arise, e.g. when an existing client gives us a new engagement. Such information obtained during any meeting, discussion or other communication with the client should be recorded and kept in the client’s file to ensure, as far as practicable, that current client information is readily accessible to the Money Laundering Compliance Officers (MLCO) or relevant regulatory bodies.

SIAO Partners has adopted a risk based approach to the ‘Know Your Customer’ requirements. Decisions should be taken on the number of times to verify the subjects within a relationship, the identification evidence required, and when additional checks are necessary. For example, engagement with a foreign client needs to be verified; for a private company or partnership, the focus should be on the principal owners/controllers whose identities need to be verified.

The identification evidence collected at the outset should be viewed against the inherent risks in the business or service.


It is important to note that the client identification process should not start and end at the point of Letters of Engagement but should continue as far as the business relationship subsists. The process of confirming and updating identity and address, and the extent of additional KYC information collected will however differ from one type of client to another.

The general principles for establishing the identity of both legal and natural persons, and the guidance on obtaining satisfactory identification evidence set out in this policy are by no means exhaustive.

Identity generally means a set of attributes such as names used, date of birth and the residential address at which the client can be located. These are features which can uniquely identify a natural or legal person.

In the case of a natural person, the date of birth should be obtained as an important identifier in support of the name. There is however no compulsion to verify the date of birth provided by the client.

Identity must be verified whenever a business relationship is to be established or a one-off transaction or series of linked transactions are undertaken. It should be noted that transaction in this policy is defined to include the giving of advice. However, advice is not intended to apply to the provision of information about the availability of products or services or to apply to a first interview/discussion prior to establishing a relationship.

Once identification procedures have been satisfactorily completed, and the business relationship established, as long as contact or activity is maintained and records concerning that client are kept, no further evidence of identity is needed when transaction or activity is subsequently undertaken.

  1. Clients – sufficient evidence of the identity must be obtained to ascertain that the client is who he/she claims to be.
  2. The person acting on behalf of another – The obligation is to obtain sufficient evidence of (both – the agent and principal) their identities. This rule is however, subject to some exceptions e.g. in consortium engagements where the lead manager/agent supplies the normal confirmation letter.
  3. There is no obligation to look beyond the client where: it is acting on its own account (rather than for a specific client or group of clients); the client is a bank, broker, fund manager or other regulated designated non-financial institutions; and all the business is to be undertaken in the name of a regulated designated non-financial institution.
  4. Higher risk business undertaken for private companies ( i.e those not listed on the stock exchange)- sufficient evidence of identity and address should be verified in respect of:
    • The principal underlying beneficial owners of the company-5% interest and above;
    • Those with principal control over the company’s asset (e.g. Principal controllers/directors) SIAO Partners would be alert to circumstances that might indicate any significant changes in the nature of business or it ownership and make enquiries accordingly.


SIAO Partners will ensure that it is dealing with a real person or organization (natural, corporate or legal), by obtaining sufficient evidence. When reliance is being placed on a third party to identify or confirm the identity of a client, the overall legal responsibility for obtaining satisfactory identification evidence rests with the account holding financial institution.

The requirement in all cases is to obtain satisfactory evidence that a person of a certain name, lives at the address given, and that the applicant is that person, or that the company has identifiable owners and its representatives can be located at the address provided.

Since no single form of identification can be fully guaranteed as genuine or representing correct identity, the identity process will be cumulative.

The procedures adopted to verify the identity of private individuals should state whether identification was done face to face or remotely. Reasonable steps should be taken to avoid single or multiple fictitious applications or substitution (impersonation) fraud.

In order to guard against the dangers of postal intercept and fraud, prospective clients should not be asked to send by post, originals of valuable personal identity documents (e.g. international passport, incorporation documents, identity cards, driving licence, etc.).

In the case of foreign nationals, the copy of international passport, national identity card or documentary evidence of address should be certified by: an embassy, consulate or high commission of the country of issue; or a senior official within the account opening institution; or a lawyer, attorney or notary public.

Records of the supporting evidence and methods used to verify identity must be retained for ten years after the disengagement or end of the business relationship.

Where the supporting evidence could not be copied at the time it was obtained, the reference numbers and other relevant details of the identification evidence obtained should be recorded to enable the documents to be re-obtained. Confirmation should be provided that the original documents were seen by certifying either on the photocopies or on the record of the evidence provided.

Where checks are made electronically, a record of actual information obtained, or a record of where it can be re-obtained must be retained as part of identification evidence. Such a record will make the reproduction of the actual information that would have been obtained before less cumbersome.

Records of the supporting evidence and methods used to verify identity must be retained for ten years after the disengagement or end of the business relationship.

Where the supporting evidence could not be copied at the time it was obtained, the reference numbers and other relevant details of the identification evidence obtained should be recorded to enable the documents to be re-obtained. Confirmation should be provided that the original documents were seen by certifying either on the photocopies or on the record of the evidence provided.

Where checks are made electronically, a record of actual information obtained, or a record of where it can be re-obtained must be retained as part of identification evidence. Such a record will make the reproduction of the actual information that would have been obtained before less cumbersome.


Establishing identity under this manual is divided into two broad categories: identity for private individual customers, and identity for corporate customers (quasi and pure).

The following information should be established and independently validated for all private individuals whose identity needs to be verified: the true full name(s) used; and the permanent home address, including landmarks and postcode where available.

The information obtained should provide satisfactorily that a person of that name exists at the address given and that the applicant is that person. Where an applicant has recently moved house, the previous address should be validated.

A risk-based approach should be adopted when obtaining satisfactory evidence of identity. The extent and number of checks can vary depending on the perceived riskiness of the service or business sought and whether the application is made in person or through a remote medium, such as telephone, post or the internet. The source of funds, i.e. how the payment was made, from where and by whom, must always be recorded to provide an audit trail. However, for higher risk products, accounts or customers, additional steps should be taken to ascertain the source of wealth/funds.

The confirmation of name and address should be established by reference to a number of sources. The checks should be undertaken by cross validation that the applicant exists at the stated address either through the sighting of actual documentary evidence, or by undertaking electronic checks of suitable databases, or by a combination of the two. The overriding requirement to ensure that the identification evidence is satisfactory rests with the financial institution opening the account or providing the product/service.

Care should be taken to ensure that documents offered are originals. Copies that are dated, signed, ‘original seen’ by a senior public servant or equivalent in a reputable private organization could be accepted in the interim pending presentation of the original documents. Hereunder are examples of suitable documentary evidence for Nigerian resident private individuals.

    1. Personal Identity Documents
      1. Current International Passport
      2. Residence Permit issued by the Immigration Authorities
      3. Current Driving Licence issued by the Federal Road Safety Commission (FRSC)
      4. Inland Revenue Tax Clearance Certificate
      5. Birth Certificate/Sworn Declaration of Age
      6. National Identity Card
  1. Documentary Evidence of Address Record of home visit (non-Nigerians)
    • Confirmation from the electoral register that a person of that name lives at that address.
    • Recent utility bill (e.g. NEPA, NITEL, etc.)
    • State/Local Government current driving licence issued by FRSC.
    • Bank statement or passbook containing current address. Solicitor’s letter confirming recent house purchase or search report from the Lands Registry
    • Tenancy Agreement
    • Search report on prospective customer’s place of employment and residence signed by a senior officer of SIAO Partners.

It is imperative for financial institutions systems to be capable of establishing the true identity and address of the customer, and for effective checks to be in place to protect against the substitution of identity by an applicant.

As an alternative or supplementary to documentary evidence of identity and address, the applicant’s identity, address and other available information may be checked electronically by accessing other data sources. Each source may be used separately as an alternative to one or more documentary checks.

Care should be taken when using a combination of electronic and documentary checks that different original sources of information are used. For example, a physical check of a bank statement and an electronic check of the same statement of account are the same source.

In respect of electronic checks, confidence as to the reliability of information supplied will be established by the cummulative nature of checking across a range of sources, preferably covering a period of time, or through qualitative checks that assess the validity of the information supplied. The number or quality of checks to be undertaken will vary depending on the diversity as well as the breadth and depth of information available from each source. Verification that the applicant is the data-subject also needs to be conducted within the checking process.

Some examples of suitable electronic sources of information are set out below.

An electronic search of the Electoral Register (not to be used as a sole identity and address check):

  • Access to internal or external account database
  • An electronic search of public records where available
  • In addition to, or integral within, the above process and procedures should exist to guard against impersonation, invented identities and the use of false address. However, if the applicant is non face-to-face, one or more additional measures should be undertaken.
  • Financial Exclusion For Applicants Resident In Nigeria
  • Access to basic banking facilities and other financial services is a necessary requirement for most adults. It is important therefore that the socially/financially disadvantaged should not be precluded from opening accounts or obtaining other financial services merely because they do not possess evidence of their identities in circumstances where they cannot reasonably be expected to do so. Internal procedures must allow for such instances and must provide appropriate advice to staff on how identity can be confirmed and what checks should be made under these exceptional circumstances.

Where SIAO Partners has reasonable grounds to conclude that an individual client is not able to produce the detailed evidence of his identity and cannot reasonably be expected to do so, the firm may accept as identification evidence a letter or statement from a person in a position of responsibility e.g. solicitors, doctors, ministers of religion and teachers who know the client, confirming that the client is who he says he is, and to confirm his permanent address.

When a financial institution has decided to treat a client as financially excluded, it should make a record of the reasons for doing so along with the account opening documents.

The Firm should satisfy itself that a client is the person he claims to be. Therefore, where a letter/statement is accepted from a professional person, it should include a telephone number where the person can be contacted for verification. The Firm will verify from an independent source the information provided by the professional person.

To guard against financial exclusion and to minimize the use of the exception procedure, financial institutions must include in their internal procedures the alternative documentary evidence of personal identity and address that can be accepted.

SIAO Partners will put in place additional monitoring for accounts opened under the financial exclusion exception procedures to ensure that such accounts are not misused.

For those prospective customers who are not resident in Nigeria but who make face-to-face contact, international passports or national identity cards should generally be available as evidence of the name of the customer. Reference numbers, date, and country of issue should be obtained and the information recorded in the customer’s file as part of the identification evidence.

Financial institutions should obtain separate evidence of the applicant’s permanent residential address from the best available evidence, preferably from an official source. A P.O. Box number alone will not normally be sufficient evidence of address. The applicant’s residential address should be such that it can be physically located by way of a recorded description or other means.

Relevant evidence should be obtained by the financial institution directly from the customer, or through a reputable credit or financial institution in the applicant’s home country or country of residence. However, particular care should be taken when relying on identification evidence provided from other countries to ensure that the customer’s true identity and current permanent address has been confirmed.

In such cases, copies of relevant identity documents should be sought and retained.

Where a foreign national has recently arrived in Nigeria, reference might be made to his/her employer, university, etc. to verify the applicant’s identity and residential address.

For a private individual not resident in Nigeria, who wishes to supply documentary information by post, telephone or electronic means, a risk-based approach must be taken. The financial institution should obtain one separate item of evidence of identity in respect of the name of the customer and one separate item for the address.

Documentary evidence of name and address can be obtained:

  • By way of original documentary evidence supplied by the client; or
  • By way of a certified copy of the customer’s passport or national identity card and a separate certified document verifying address e.g. a driving licence, utility bill, etc.; or
  • Through a branch, subsidiary, head office or correspondent bank. Where the applicant does not already have a business relationship with the financial institution that is supplying the information, or the financial institution is not within Nigeria, certified copies of relevant underlying documentary evidence should be sought and retained in the institutions.
  • Where necessary, additional comfort should be by confirming the customer’s true name, address and date of birth from a reputable credit institution in the customer’s home country.

Because of possible false identities and impersonations that can arise with non face-to-face customers, it is important to ensure that the applicant is who he/she claims to be. Accordingly, one additional measure or check should be undertaken to supplement the documentary or electronic evidence. These additional measures will apply whether the applicant is resident in Nigeria or elsewhere and must be particularly robust where the applicant is requiring a bank account or other product/service that offers money transmission or third party payments.

Procedures to identify and authenticate the customer should ensure that there is sufficient evidence, either documentary or electronic, to confirm address and personal identity and to undertake at least one additional check to guard against impersonation fraud.

The extent of the identification evidence required will depend on the nature and characteristics of the product or service and the assessed risk. However, care must be taken to ensure that the same level of information is obtained for internet customers and other postal/telephone customers.

If reliance is being placed on intermediaries to undertake the processing of applications on the customer’s behalf, checks should be undertaken to ensure

that the intermediaries are regulated for money laundering prevention and that the relevant identification procedures are applied. In all cases, evidence as to how identity has been verified should be obtained and retained with the account opening records.

SIAO Partners will regularly monitor internet-based businesses/clients. If a significant proportion of the business is operated electronically, computerized monitoring systems that are designed to recognize unusual transactions and related patterns of transactions should be put in place for recognizing suspicious transactions.

A refugee and asylum seeker may require a basic bank account without being able to provide evidence of identity. In such circumstances, authentic references from Ministry of Internal Affairs or an appropriate government agency should be used in conjunction with other readily available evidence.

Additional monitoring procedures should however be undertaken to ensure that the use of the account is consistent with the customer’s circumstances.

When opening accounts for students or other young people, the normal identification procedures set out in this manual should be followed as far as possible. Where such procedures would not be relevant, or do not provide satisfactory identification evidence, verification could be obtained:

  • Via the home address of the parent(s); or by obtaining confirmation of the applicant’s address from his/her institution of learning.
  • By seeking evidence of a tenancy agreement or student accommodation contract.

Often, an account for a minor will be opened by a family member or guardian. In cases where the adult opening the account does not already have an account with the financial institution, the identification evidence for that adult, or of any other person who will operate the account, should be obtained in addition to obtaining the birth certificate or passport of the child. It should be noted that this type of account could be open to abuse and therefore strict monitoring should then be undertaken.


Establishing Identity – Trust, Nominees and Fiduciaries

Trusts, nominee companies and fiduciaries are popular vehicles for criminals wishing to avoid the identification procedures and mask the origin of the criminal money they wish to launder. The particular characteristics of Trusts that attract the genuine customer and the anonymity and complexity of structures that they can provide, are also highly attractive to money launderers.

Some trust, nominees and fiduciary accounts present a higher money laundering risk than others. Identification and “Know Your Business” procedures need to be set and managed according to the perceived risk.

The principal objective for money laundering prevention via trusts, nominees and fiduciaries is to verify the identity of the provider of funds, i.e. the settlor, those who have control over the funds, i.e. the trustees, and any controllers who have trust and the original source of funding should be ascertained. Whilst reliance can often be placed on other financial institutions that are regulated for money laundering prevention to undertake the checks, the power to remove the trustees for discretionary and offshore trusts, the nature and purpose of the confirmed identity, the responsibility to ensure that this is undertaken, rests with the financial institution. The underlying evidence of identity must be made available to law enforcement agencies in the event of an investigation.

Exceptionally, identification requirements might be waived for any trustee who does not have authority to operate an account or give relevant instructions concerning the use or transfer of funds.

Where money is received on behalf of a trust, reasonable steps should be taken to ensure that:

  • The source of the funds is properly identified; and
  • The nature of the transaction or instruction is understood.
  • It is also important to ensure that payments are properly authorized in writing by the trustees.

A limited liability partnership should be treated as corporate customers for verification of identity and Know Your Customer purposes.


Because of the complexity of their organizations and structures, corporate and legal entities are the most likely vehicles for money laundering, especially those that are private companies fronted by a legitimate trading company. Care should be taken to verify the legal existence of the applicant (i.e. the company) from official documents or sources, and to ensure that any person purporting to act on behalf of the applicant is fully authorized. Enquiries should be made to confirm that the company is not merely a “brass plate company” where the controlling principles cannot be identified.

The identity of a corporate company comprises:

  • Its registration number; its registered corporate name and any trade names used;
  • Its registered address and any separate principal trading addresses;
  • Its directors;
  • Its owners and shareholders; and
  • The nature of the company’s business

The extent of identification measures required to validate this information, or the documentary evidence to be obtained, depends on the nature of the business or service that the company requires from SIAO Partners. A risk-based approach should be taken. In all cases, information as to the nature of the normal business activities that the company expects to undertake with the financial institution should be obtained. Before a business relationship is established, measures should be taken by way of company search at the Corporate Affairs Commission (CAC) and/or other commercial enquiries to check that the applicant company has not been, or is not in the process of being dissolved, struck-off, wound-up or terminated.

As with the requirements for private individuals, because of the additional risks with non face-to-face business, additional procedures must be undertaken to ensure that the applicant’s business, company or society exists at the address provided and for a legitimate purpose.

Where the characteristics of the product or service permit, care should be taken to ensure that relevant evidence is obtained to confirm that any individual representing the company has the necessary authority to do so.

When principal owners, controllers or signatories need to be identified within the relationship, the relevant requirements for personal customers should be followed.

Corporate customers that are listed on the stock exchange are considered to be publicly owned and generally accountable. Consequently, there is no need to verify the identity of the individual shareholders.

Similarly, it is not necessary to identify the directors of a quoted company. However, SIAO Partners will make appropriate arrangements to ensure that the individual officer or employee (past or present) is not using the name of the company, or its relationship with the financial institution for a criminal purpose. The Board Resolution or other authority for any representatives to act on behalf of the Firm in its dealings with the financial institution should be obtained to confirm that the individual has the authority to act.

Consequently, where the applicant company is:

  • Listed on the stock exchange; or there is independent evidence to show that it is a wholly owned subsidiary or a subsidiary under the control of such a company; No further steps to verify identity over and above the usual commercial checks and due diligence will normally be required, unless the account or service required falls within the category of higher risk business.

Bank accounts for registered public companies where the applicant is seeking to enter into a full banking relationship or any other business relationship where third party funding and transactions are permitted, the following evidence should be obtained either in documentary or electronic form:

  • For established companies, i.e. those incorporated for 18 months or more, a copy of the latest report and accounts (is required to be produced and audited where applicable);
  • A search at the CAC or an enquiry via a business information service or an undertaking from a firm of lawyers or accountants confirming the documents submitted to the CAC;
  • A copy of the resolution of the Board of Directors to open an account and confer authority on those who will operate it, certified by a Director/Company Secretary;
  • The Memorandum and Articles of Association of the company.

Additional Measures for Higher Risk Business Relating to Private Companies For private companies undertaking higher risk business, in addition to verifying the legal existence of the business, the principal requirement is to look behind the corporate entity to identify those who have ultimate control over the business and the company’s assets. What constitutes significant shareholding or control for this purpose will depend on the nature of the company. Identification evidence will normally need to be obtained for those shareholders with interests of 5% or more. Principal control rests with those who are mandated to manage funds, accounts or investments without requiring authorization and, who would be in a position to override internal procedures and control mechanisms.

Identification evidence should be obtained for the principal beneficial owner(s) of the company, and any other person with principal control over the company’s assets. Where the principal owner is another corporate entity or trust, the objective is to undertake measures that look behind that company or vehicle and verify the identity of the beneficial owner(s) or settlors. When financial institutions become aware that principal beneficial owners/controllers have changed, care should be taken to ensure that their identities are verified.

Taking a risk-based approach, financial institutions should identify directors who are not principal controllers and/or signatories to an account. In respect of a full banking relationship, particularly where turnover is significant, a visit to the place of business should be undertaken to confirm the existence of business premises and the nature of the business activities conducted.

If suspicions are aroused by a change in the nature of the business transacted or the profile of payments through a bank or investment account, further checks should be made to ascertain the reason for the changes.

For full banking relationships, periodic enquiries should be made to establish whether there have been any changes to controllers/shareholders or to the original nature of the business/activity.

Particular care should be taken to ensure that full identification and “Know Your Customer” requirements are met if the company is an International Business Company (IBC) registered in an offshore jurisdiction and operating out of a different jurisdiction.

For foreign financial institutions, the confirmation of existence and regulated status should be checked by one of the following means:

  • Checking with the home country Central Bank or relevant supervisory body; or checking with another office, subsidiary, branch, or correspondent bank in the same country; or
  • Checking with Nigerian regulated correspondent bank of the overseas institution; or
  • Obtaining from the relevant institution, evidence of its licence or authorization to conduct financial and/or banking business.

Additional information on banks worldwide can be obtained from various international publications and directories or any of the international business information services. Reference to these publications should not replace the confirmation required.

Although bureau de change are subject to the regulations, they must be verified in accordance with the procedures for Other Financial Institutions. Satisfactory evidence of identity must include the applicant’s operating licence.

Establishing Identity – Clubs and Societies. In the case of applications made on behalf of clubs or societies, a financial institution should take reasonable steps to satisfy itself as to the legitimate purpose of the organization by sighting its constitution. The identity of at least two of the principal contacts/signatories should be verified initially in line with the requirements for private individuals. Signing authorities should be structured to ensure that at least one of the signatories authorizing any transaction has been verified. When signatories change, care should be taken to ensure that the identity of at least two of the current signatories are verified.

Where the purpose of the club/society is to purchase regulated investments where all the members would be regarded as individual clients, all members should be identified in line with the requirements for personal customers. Financial institutions will need to look at each situation on a case-by-case basis.

In all transactions undertaken on behalf of an Occupational Pension Scheme where the transaction is not in relation to a long term policy of insurance, the identity of both the principal employer and the trust should be verified. In addition to the identity of the principal employer, the source of funding should be verified and recorded to ensure that a complete audit trail exists if the employer is dissolved/wound up.

For the Trustees of Occupational Pension Schemes, satisfactory identification evidence can be based on the inspection of formal documents concerning the trust which confirm the names of the current trustees and their address for correspondence. In addition to the documents, confirming the trust identification can be based on extracts from Public Registers, or references from Professional Advisers or Investment Managers.

Any payment of benefits by, or on behalf of the Trustees of an Occupational Pension Scheme will not require verification of identity of the recipient.

Where individual members of an Occupation Pension Scheme are to be given personal investment advice, their identities must be verified. However, where the Trustees and Principal Employer have been satisfactorily identified (and the information is still current), it may be appropriate for the Employer to provide confirmation of the identity of individual employees.

Adherence to the identification procedures required for money laundering prevention would remove the opportunities for opening unauthorized accounts in false identities on behalf of charities. Confirmation of authority to act in the name of the charity is therefore clearly necessary.

As experience has shown that most unauthorized accounts of this type are opened under sole control, this practice should be strongly discouraged.

When dealing with an application from a registered charity, the financial institution should obtain and confirm the name and address of the charity concerned.

To guard against the laundering of fraudulently obtained funds, where the person making the application or undertaking the transaction is not the official correspondent or the recorded alternate, financial institutions should consider sending a letter to the official correspondent advising the charity of the application. The charity should be asked to respond as a matter of urgency if there is any reason to suggest that the application has been made without authority.

Where a charity is opening a current account, the identity of all signatories should be verified initially and, when signatories change, care should be taken to ensure that the identity of any new signatories are verified.

Broad categories of reason for suspicion and examples of suspicious transactions for Non-Banking Financial Companies are as indicated below:

  1. Identity of client:
    • False identification documents
    • Identification documents which could not be verified within reasonable time.
    • Accounts opened with names very close to other established business entities.
  2. Background of Client: Suspicious background or links with known criminals.
  3. Multiple Accounts: Large number of accounts having a common account holder, introducer or authorized.
  4. Signatory with no rationale:
    • Unexplained transfers between multiple accounts with no rationale.
  5. Activity in accounts:
    • Unusual activity compared with past transactions – sudden activity in dormant accounts;
    • Activity inconsistent with what would be expected from declared business.
  6. Nature of transactions;
    • Unusual or unjustified complexity;
    • No economic rationale or bonafide purpose;
    • Frequent purchases of drafts or other negotiable instruments with cash;
    • Nature of transactions inconsistent with what would be expected from declared business.
  7. Value of transactions:
    • Value just under the reporting threshold amount in an apparent attempt to avoid reporting.
    • Value inconsistent with the client’s apparent financial standing.
  8. Illustrative list of suspicious transactions:
    • Reluctance to part with information, data and documents;
    • Submission of false documents, purpose of loan and detail of accounts;
    • Reluctance to furnish details of source of funds of initial contribution;
    • Reluctance to meet in person, representing through power of attorney;
    • Approaching a distant branch away from own address;
    • Maintaining multiple accounts without explanation;
    • Payment of initial contribution through unrelated third party account;
    • Suggesting dubious means for sanction of loan;
    • Where transactions do not make economic sense;
    • Where there is doubt about beneficial ownership;
    • Encashment of loan through a fictitious bank account;
    • Sale consideration quoted higher or lower than prevailing area prices;
    • Request for payment in favor of third party with no relation to transaction;
    • Usage of loan amount for purposes other than stipulated in connivance with vendors, or agent;
    • Multiple funding involving NGO, Charitable organization, small and medium establishments, self-help groups, micro-finance groups, etc.;
    • Frequent request for change of address.

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