The Reserve Bank of India has asked banks to conduct extra due diligence of accounts operated by non-government organisations to monitor and reduce risks of money laundering.
NGOs are one of the best clients or customers of banks and do good work in society but some of them do not have transparent structure, RBI chief general manager P Saran said while addressing a seminar on anti-money laundering organized by Indian Banks' Association in Mumbai on Sunday evening.
The trusts and NGOs are considered as a part of medium and high-risk customer group where the monitoring is done with more care, he said.
On monitoring of the account transactions under 'Know Your Customer' procedures, he said the banks can effectively control and reduce their risks if they have a understanding of customer activities.
The banks should pay special attention to all complex, unusually large transaction and all unusual patterns, which have no apparent economic and visible lawful purpose, he said.
The government is actively working to frame rules for anti-money laundering and they are likely to be notified soon, Saran said.
The bank branch managers have a responsibility to identify and report such unusual transactions where there is a suspicion of money laundering for vigilance activities, he added.
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