Posted: Wed Oct 27 2010, 17:01 hrs

http://www.indianexpress.com/news/rbi-warns-of-salary-accounts-fraud/703346/

Mumbai: In a bid to check money laundering Reserve Bank today asked banks to seek valid documents besides certification by employer while opening accounts of salaried employees.

With a view to contain the risk of fraud banks need to rely on certification only from corporates and other entities of repute and should be aware of the competent authority designated by the concerned employer to issue such certificate or letter, RBI said in a circular.

In addition to the certificate from employer, banks should insist on at least one of the officially valid documents as provided in the Prevention of Money Laundering Rules namely passport, driving licence, PAN Card, Voter's Identity card etc, it said.

Banks can also accept utility bills as valid document for know your customers (KYC) purposes for opening bank account of salaried employees of corporates and other entities, it added.

Any contravention or non-compliance shall attract penalties under Banking Regulation Act, it said.

RBI noted that it has been brought to its notice that for opening bank accounts of salaried employees some banks rely on a certificate or letter issued by the employer as the only KYC document for the purposes of certification of identity as well as address proof.