State the objectives of KYC policy. What elements should be incorporated in KYC policy. Who may be treated as customer for the purpose of KYC policy?

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 their financial dealings better which in turn help them manage their risks prudently. Following elements should be incorporated in KYC Policy: Customer Acceptance Policy; Customer Identification Procedures; Monitoring of Transactions; and Risk Management. The following person(s)/entity(s) may be treated as customer for the purpose of KYC Policy: a person or entity that maintains an account and/or has a business relationship with the bank; one on whose behalf the account is maintained (i.e. the beneficial owner); beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank, say, a wire transfer or issue of a high value demand draft as a single transaction.