CB to ascertain source of funding from customers

Sri Lanka’s Central Bank ( CB) this week reiterated rules governing all financial institutions pertaining to “Know your customer (KYC)” and the source of funds being deposited to ensure it is not illegal money.

In a public notice, the CB said all these institutions are required to obtain information according to the Financial Institutions ( Customer Due Diligence) Rules 01 of 2016 to identify, assess and manage money laundering and terrorist financing risks posed by their customers.

Such information should contain the proper name of the customer (as in state identification documents); official personal identification; purpose of account; sources of earnings; expected monthly turnover; expected mode of transactions ( eg - cash, cheque, etc) and expected type of counterparties

(if applicable).

The directive has been issued to commercial banks/ licensed specialized banks, finance companies, stock brokers, and money or value transfer services (eg – money operators, etc).

“The collection of identification and other basic details about customers of financial institutions is a globally accepted practice. Hence the support and cooperation of customers of all financial institutions is solicited,” the notice by the CB’s Financial Intelligence Unit said.

The directive has been issued to commercial banks/ licensed specialized banks, finance companies, stock brokers, and money or value transfer services (eg – money operators, etc).