The record-keeping requirements outlined in the Reserve Bank of India (RBI) KYC guidelines aim to ensure that banks maintain detailed documentation for transactions and customer identification. Let’s break it down:

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1. Transaction Records

Banks must keep comprehensive records of all transactions between themselves and their customers, whether these transactions are domestic or international.

• Duration: Transaction records must be preserved for at least five years from the date of the transaction.
• Details to Include:
  • The nature of the transaction (e.g., deposit, withdrawal, transfer).
  • The amount and the currency involved.
  • The date and the parties engaged in the transaction.

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2. Customer Identification Records

Banks must retain all information collected during the customer verification and account-opening process.

• Duration: These identification records must be preserved for five years after the business relationship with the customer ends or the account is closed.
• What This Includes:
  • Proof of identity (e.g., Aadhaar, PAN, Passport).
  • Proof of address.
  • Business-related information if applicable (e.g., financial status or nature of business).

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3. Reconstruction of Transactions

The rules mandate that records must be kept in a manner that allows authorities to reconstruct the individual transactions with ease, if needed.

• Purpose: This aids investigations by government agencies or law enforcement.
• Essential Data: Banks must document:
  • Parties to the transaction.
  • Details of the transaction’s purpose or rationale.

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4. Accessibility and Retrieval

• Banks must implement systems that allow them to quickly retrieve data when requested by competent authorities.
• Whether in hard copy or digital format, the records should be organized and accessible.

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5. Maintaining Confidentiality

• Banks are required to ensure confidentiality when maintaining and storing customer information.
• Such information should only be disclosed:
  • Under legal obligation.
  • If public interest demands it.
  • With customer consent.

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6. Special Rules for Non-Profit Organizations (NPOs)

• Banks must register the details of NPO customers on the DARPAN Portal of NITI Aayog if they aren’t already registered.
• These details should also be retained for five years after the account is closed or the business relationship ends.

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7. Digital Records

• Records can be preserved in hard copy or soft copy formats, provided the digital systems are secure and resilient.
• Data encryption is often required to maintain security during storage and transmission.

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These record-keeping measures ensure compliance with anti-money laundering (AML) and countering financing of terrorism (CFT) laws while supporting transparency and investigative efforts.