Section 2 in Prevention of Money-Laundering (Maintenance of Records) Rules, 2005
2. Definitions.
(1)In these rules, unless the context otherwise requires,-(a)"Act" means the Prevention of Money-Laundering Act, 2002 (15 of 2003);[[(ac)] [Inserted by Notification No. G.S.R. 544(E), dated 7.7.2015 (w.e.f. 1.7.2005).] "Central KYC Records Registry" means a reporting entity, substantially owned and controlled by the Central Government, and authorised by that Government through a notification in the Official Gazette to receive, store, safeguard and retrieve the KYC records in digital form of a client as referred to in clause (ha) in such manner and to perform such other functions as may be required under these rules:][[[(aa)] [Inserted by Notification No. G.S.R. 538(E), dated 1.6.2017 (w.e.f. 1.7.2005)] "Aadhaar number" shall have the meaning assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);](ab)[] [Renumbered '(aab)' by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).] "authentication" means the process as defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016;(aac)[ and (aad) ***] [Omitted '(aac) and (aad)' by Notification No. G.S.R. 108(E), dated 13.2.2019 (w.e.f. 1.7.2005).](ca)[] [Renumbered '(aae)' by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).] "e - KYC authentication facility" means an authentication facility as defined in Aadhaar (Authentication) Regulations, 2016;(cb)[ "equivalent e-document" means an electronic equivalent of a document, issued by the issuing authority of such document with its valid digital signature including documents issued to the digital locker account of the client as per rule 9 of the Information Technology (Preservation and Retention of Information by Intermediaries Providing Digital Locker Facilities) Rules, 2016;] [Inserted by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).](i)[] [Renumbered '(aaf)' by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).] "Yes/No authentication facility" means an authentication facility as defined in Aadhar (Authentication) Regulations, 2016;](aag)[ "Depository Receipt" means a foreign currency denominated instrument, whether listed on an international exchange or not, issued by a foreign depository in a permissible jurisdiction on the back of eligible securities issued or transferred to that foreign depository and deposited with a domestic custodian and includes 'global depository receipt' as defined in the Companies Act, 2013 (18 of 2013);] [Inserted by Notification No. G.S.R. 669(E), dated 18.9.2019 (w.e.f. 1.7.2005).](b)[ "client due diligence" means due diligence carried out on a client referred to in clause (ha) of sub-section (1) of section 2 of the Act;] [Substituted by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).](ba)[ "Designated Director" means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under chapter IV of the Act and the Rules and includes - [Inserted by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).](i)the Managing Director or a whole-time Director duly authorized by the Board of Directors if the reporting entity is a company,(ii)the managing partner if the reporting entity is a partnership firm,(iii)the proprietor if the reporting entity is a proprietorship concern,(iv)the managing trustee if the reporting entity is a trust,(v)a person or individual, as the case may be, who controls and manages the affairs of the reporting entity if the reporting entity is an unincorporated association or a body of individuals, and(vi)such other person or class of persons as may be notified by the Government if the reporting entity does not fall in any of the categories above.Explanation. - For the purpose of this clause, the terms "Managing Director" and "Whole-time Director" shall have the meaning assigned to them in the Companies Act, 1956 (1 of 1956);](bb)[ "Designated Officer" means any officer or a class of officers authorized by a banking company, either by name or by designation, for the purpose of opening small accounts.] [Inserted by Notification No. G.S.R. 980 (E) dated 16.12.2010 (w.e.f. 1.7.2005)](bba)[ "digitial KYC" means the capturing live photo of the client and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the reporting entity as per the provisions contained in the Act; [Inserted by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).](bc)Digital Signature shall have the same meaning as assigned to it in clause (p) of subsection (1) of section (2) of the Information Technology Act, 2000 (21 of 2000);](c)"Director" means the Director appointed under sub-section (1) of section 49 of the Act for the purposes of [sections 12, 12A and 13] [Substituted 'sections 12 and 13' by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).] of the Act;[[(cc)] [Inserted by Notification No. G.S.R. 544(E), dated 7.7.2015 (w.e.f. 1.7.2005).] "Know Your Client (KYC) Identifier" means the unique number or code assigned to a client by the Central KYC Records Registry;(cd)[] [Renumbered '(cb)' by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).] "Know Your Client (KYC) Identifier" means the records, including the electronic records, relied upon by a reporting entity in carrying out client due diligence as referred to in rule 9 of these rules;(ce)[] [Renumbered '(cc)' by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).] "last KYC verification or updation" means the last transaction made by a reporting entity in the Central KYC Records Registry by which the KYC records of a client were recorded, changed or updated by a reporting entity;][[(cf)] [Inserted by G.S.R. 816(E), dated 12-11-2009 (w.e.f. 12.11.2009).] "non-profit organisation" means any entity or organisation that is registered as a trust or a society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a company registered under [section 8 of the Companies Act, 2013 (18 of 2013);] [Substituted 'section 25 of the Companies Act, 1956 (1 of 1956)' by Notification No. G.S.R. 544(E), dated 7.7.2015 (w.e.f. 1.7.2005).]](d)"officially valid document" means [the passport, the driving licence [proof of possession of Aadhaar number] [Substituted 'the passport, the driving licence' by Notification No. G.S.R. 538(E), dated 1.6.2017 (w.e.f. 1.7.2005)], the Voter's Identity Card issued by Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, the letter issued by the National Population Register containing details of name, address or any other document as notified by the Central Government in consultation with the Regulator], the Permanent Account Number (PAN) Card, the Voter's Identity Card issued by [Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, the letter issued by the Unique Identification Authority of India [or the National Population Register] [Substituted for the words "the Election Commission of India or any other document as may be required by the banking company, or financial institution or intermediary;" by Notification No. G.S.R. 980 (E) dated 16.12.2010 (w.e.f. 1.7.2005)] containing details of name, address and Aadhaar number or any other document as notified by the Central Government in consultation with the [regulatory.] [Substituted 'Reserve Bank of India or any other document as may be required by the banking companies, or financial institution or intermediary' by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).]][Provided that where simplified measures are applied for verifying the identity of the clients the following documents shall [also] [Inserted by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).] be deemed to be 'officially valid documents:(a)identity card with applicant's Photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;(b)letter issued by a gazetted officer, with a duly attested photograph of the person;][Provided further that where simplified measures are applied for verifying the limited purpose of proof of address of the clients, where a prospective customer is unable to produce any proof of address, the following documents shall [also] [Inserted by Notification No. G.S.R. 288(E), dated 15.4.2015 (w.e.f. 1.7.2005).] be deemed to be 'officially valid document':(a)utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, Water bill);)(b)property or Municipal tax receipt;(c)bank account or Post Office savings bank account statement;(d)pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;(e)letter of allotment of accommodation from employer issued by State or Central Government Departments or Public Sector Undertakings, scheduled commercial banks, financial institutions and listed companies. Similarly, leave and licence agreements with such employers allotting official accommodation; and[***] [Omitted by Notification No. G.S.R. 1318(E), dated 23.10.2017, (w.e.f. 1.7.2005).]][Provided also that in case the officially valid document presented by a foreign national does not contain the details of address, in such case the documents issued by the Government departments of foreign jurisdictions and letter issued by the Foreign Embassy or Mission in India shall be accepted as proof of address.] [Inserted by Notification No. G.S.R. 1318(E), dated 23.10.2017, (w.e.f. 1.7.2005).][Provided also that where the client submits his proof of possession of Aadhaar number as an officially valid document, he may submit it in such form as are issued by the Unique Identification Authority of India;] [Inserted by Notification No. G.S.R. 108(E), dated 13.2.2019 (w.e.f. 1.7.2005).][Explanation. [Inserted by Notification No. G.S.R. 730(E), dated 22.9.2015 (w.e.f. 1.7.2005).] - For the purpose of this clause, a document shall be deemed to an "officially valid document" even if there is a change in the name subsequent to its issuance provided it is supported by a marriage certificate issued by the State Government or Gazette notification, indicating such a change of name.](da)[ "offline verification" shall have the same meaning as assigned to it in clause (pa) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);] [Inserted by Notification No. G.S.R. 582(E), dated 19.8.2019 (w.e.f. 1.7.2005).](e)"prescribed value" means the value of transaction prescribed under these rules;(f)"Principal Officer" means an officer designated by a [reporting entity] [Substituted 'banking company, financial institution and intermediary, as the case may be' by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).];(fa)[ "Regulator" means a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the activity of] [Inserted by G.S.R. 816(E), dated 12-11-2009 (w.e.f. 12-11-2009).] [reporting entities or the Director as may be notified by the Government for a specific reporting entity or a class of reporting entities or for a specific purpose;] [Substituted 'banking companies, financial institutions or interme-diaries, as the case may be' by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).][[(fb)] [Inserted by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).] "Rules" means the Prevention of Money-laundering (Maintenance of Records) Rules, 2005;][[(fc)] [Inserted by Notification No. G.S.R. 980 (E) dated 16.12.2010 (w.e.f. 1.7.2005)] 'small account' means a savings account in a banking company where -(i)the aggregate of all credits in a financial year does not exceed rupees one lakh,(ii)the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand, and(iii)the balance at any point of time does not exceed rupees fifty thousand.][Provided that this limit on balance shall not be considered while making deposits through government grants, welfare benefits and payment against procurements.] [Inserted by Notification No. G.S.R. 1038(E), dated 21.8.2017, (w.e.f.1.7.2005).](g)[ "Suspicious transaction" means a transaction referred to in clause (h), including an attempted transaction, whether or not made in cash, which to a person acting in good faith- [Substituted by G.S.R. 816(E), dated 12-11-2009 (w.e.f. 1.7.2005).](a)gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or(b)appears to be made in circumstances of unusual or unjustified complexity; or(c)appears to have no economic rationale or bona fide purpose; or(d)gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism;][Explanation. - Transaction involving financing of the activities relating to terrorism includes transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organisation or those who finance or are attempting to finance terrorism.] [Inserted by Notification No. G.S.R. 508 (E) dated 16.6.2010 (w.e.f. 1.7.2005)](h)[ "transaction" means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof and includes - [Substituted by Notification No. G.S.R. 576(E), dated 27.8.2013 (w.e.f. 1.7.2005).](i)opening of an account;(ii)deposits, withdrawal, exchange or transfer of funds in whatever currency, whether in cash or by cheque, payment order or other instruments or by electronic or other non-physical means;(iii)the use of a safety deposit box or any other form of safe deposit;(iv)entering into any fiduciary relationship;(v)any payment made or received in whole or in part of any contractual or other legal obligation;(vi)any payment made in respect of playing games of chance for cash or kind including such activities associated with casino; and(vii)establishing or creating a legal person or legal arrangement.](2)All other words and expressions used and not defined in these rules but defined in the Act shall have the meaning respectively assigned to them in the Act.
