What do you mean by the KYC guidelines as given under the Prevention of Money Laundering Act, 2002?

Reserve Bank of India issued Master Circular on Know Your Customer (KYC) Guidelines under Prevention of Money Laundering Act, (PMLA), 2002 and Banks were advised to follow certain customer identification procedure for opening of accounts and monitoring transactions of a suspicious nature for the purpose of reporting it to appropriate authority. The objective of Know Your Customer (KYC) Norms/Anti-Money Laundering (AML) Measures/Combating of Financing of Terrorism (CFT) guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC procedures also enable banks to know/understand their customers and financial dealings better which in turn help banks manages their risks prudently. The 4 key elements of the KYC Policy include Customer Acceptance Policy, Customer Identification Procedures, Monitoring of Transactions and Risk Management.