Check tax returns before opening businessmen A/Cs: RBI

In a bid to check frauds,the Reserve Bank today asked the Urban Cooperative Banks (UCBs) to verify Income Tax returns and other documents before opening bank accounts of businessmen as part of the KYC exercise.

Written by Agencies | Mumbai | Published: May 11, 2012 7:13:51 pm

In a bid to check frauds,the Reserve Bank today asked the Urban Cooperative Banks (UCBs) to verify Income Tax returns and other documents before opening bank accounts of businessmen as part of the KYC exercise.

The UCBs,RBI said should verify “complete Income Tax Return in the name of the sole proprietor where the firm’s income is authenticated by the I-T authorities”.

It further said they should also look into the “utility bills such as electricity,water and landline telephone bills in the name of the proprietary concern”.

In view of the fraudulent withdrawal of funds by opening accounts in the name of known business entities,in 2009 RBI had directed the UCBs to put in place Know Your Customer (KYC) guideline for opening of accounts by propriety concerns.

RBI has now expanded the ambit of KYC to include I-T returns and utility bills.

In 2009 the central bank had also asked the UCBs to be cautious while accepting high value cheques of these accounts as well large cash withdrawals,apart from monitoring transactions from such accounts.

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