**Policy Summary: RBI Directive on Incorporation of Purchaser Name on Demand Drafts**
This directive, RBI20181914 DBR.AML.BC.No.21014.01.001201819, issued by the Reserve Bank of India (RBI) on July 12, 2018, mandates that all Scheduled Commercial Banks (including Regional Rural Banks), Urban Cooperative Banks, State Cooperative Banks, District Central Cooperative Banks, Local Area Banks, Small Finance Banks, and Payment Banks must incorporate the name of the purchaser on the face of all demand drafts, pay orders, and banker's cheques issued.
This policy change aims to address concerns regarding anonymity in payments made via these instruments and to mitigate potential misuse for money laundering activities. The directive amends Section 66 of the Master Direction on KYC dated February 25, 2016, as amended on April 20, 2018, to include this requirement.
The instructions took effect for instruments issued on or after September 15, 2018. Banks are advised to ensure compliance with this directive.
For further information, contact Dr. S. K. Kar, Chief General Manager, Department of Banking Regulation, Central Office, Central Office Building, 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001. Phone: 022-22701203, Fax: 022-22701239, Email: cgmamlrbi.org.in, Website: www.rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, referred to as RBI.
Scheduled Commercial Banks: A category of banks regulated by the Reserve Bank of India.
Regional Rural Banks: Regional Rural Banks in India.
Urban Cooperative Banks: Urban Cooperative Banks in India.
State Cooperative Banks: State Cooperative Banks in India.
District Central Cooperative Banks: District Central Cooperative Banks in India.
Small Finance Banks: A type of bank in India focused on financial inclusion.
Payment Banks: A differentiated type of bank in India allowing acceptance of demand deposits.
KYC Master Direction: Master Direction on Know Your Customer (KYC) norms.
Mumbai, Maharashtra: The city in India where the Central Office of the Department of Banking Regulation is located.
RBI/2018-19/14
DBR.AML.BC.No.210/14.01.001/2018-19 July 12, 2018
The Chairperson/CEOs of all Scheduled Commercial Banks including
Regional Rural Banks/Urban Co-operative Banks/State Co-operative Banks/
District Central Co-operative Banks/Local Area Banks/Small Finance
Banks/Payment Banks
Dear Sir/Madam,
Incorporation of Name of the Purchaser on the Face of the Demand Draft
In order to address the concerns arising out of the anonymity provided by payments
through demand drafts and its possible misuse for money laundering, it has been
decided that the name of the purchaser be incorporated on the face of the demand
draft, pay order, banker’s cheque, etc., by the issuing bank. These instructions shall
take effect for such instruments issued on or after September 15, 2018.
Accordingly, Section 66 of the Master Direction on KYC dated February 25, 2016, as
amended on April 20, 2018, has been amended and following paragraph has been
added:
Further, the name of the purchaser shall be incorporated on the face of the demand
draft, pay order, banker’s cheque, etc., by the issuing bank. These instructions shall
take effect for such instruments issued on or after September 15, 2018.
2. You are advised to ensure compliance with the above.
Yours faithfully,
(Dr. S. K. Kar)
Chief General Manager
ब��कंग �व�नयमन �वभाग, क�द्र�य कायार्लय, क�द्र�य कायार्लय भवन, 13वीं मंिजल, शह�द भगत �सहं माग,र् मुंबई – 400 001
फोन: 022-22701203, फैक्स: 022-22701239, ई-मेल: cgmaml@rbi.org.in, वेबसाइट: www.rbi.org.in
Department of Banking Regulation, Central Office, Central Office Building, 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001
Phone : 022-22701203, Fax : 022-22701239, E-mail : cgmaml@rbi.org.in, Website : www.rbi.org.in
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any manner to such offers."