Banks are advised to control sources of funds when crediting large cash amounts to customer accounts
The Bank of Russia has published methodological recommendations to credit institutions advising them to identify the sources of funds when they process large cash transactions of their clients. This is intended to help banks promptly detect suspicious transactions that may be conducted for money laundering purposes, such as introducing illicit cash into the financial system, etc.
The measures proposed by the regulator apply to large cash transactions (e.g. one cash deposit of ₽5 million or more, or several cash deposits totalling ₽5 million or more per month for individuals) and transactions which are atypical of a company’s business or an individual’s usual payment patterns. These measures cover a narrow segment of credit institutions’ customers, without affecting bona fide individuals.
The recommendations are consistent with the principles of the Financial Action Task Force which focus on identifying the sources of funds as part of customer due diligence procedures. The recommendations make these procedures clearer to financial institutions and their customers.
The document includes recommendations that the Bank of Russia released before to counteract the circulation of funds from unidentified sources. Accordingly, the earlier recommendations on this subject are superseded.