(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or

(b) appears to be made in circumstances of unusual or unjustified complexity; or

(c)  appears to have no economic rationale or bonafide purpose; or

(d)  gives  rise  to  a  reasonable  ground  of  suspicion  that  it may involve financing of the activities relating to terrorism;*

*Amended vide Notification No 4/2007 dated 24-05-2007 and Notification No. 13/2009 dated 12-11-2009

Broad categories of reason for suspicion and examples of suspicious transactions for a banking company are indicated as under:

Identity of client

-        False identification documents

-        Identification documents which could not be verified within reasonable time

-        Accounts opened with names very close to other established business entities

Background of client

-        Suspicious background  or links with known criminals

Multiple accounts

-        Large number of accounts having a common account holder, introducer or authorized signatory with no rationale

-        Unexplained transfers between multiple accounts with no rationale

Activity in accounts

-        Unusual activity compared with past transactions

-        Sudden activity in dormant accounts

-        Activity inconsistent with what would be expected from declared business

Nature of transactions

-        Unusual or unjustified complexity

-        No economic rationale or bonafide purpose

-        Frequent purchases of drafts or other negotiable instruments with cash

-        Nature of transactions inconsistent with what would be expected from declared business

Value of transactions

-        Value just under the reporting threshold amount in an apparent attempt to avoid reporting

-        Value inconsistent with the client’s apparent financial standing

Broad categories of reason for suspicion and examples of suspicious transactions for an intermediary are indicated as under:

Identity of Client

-        False identification documents

-        Identification documents which could not be verified within reasonable time

-        Non-face to face client

-        Doubt over the real beneficiary of the account

-        Accounts opened with names very close to other established business entities

Suspicious Background

-        Suspicious background or links with known criminals

Multiple Accounts

-        Large number of accounts having a common account holder, introducer or authorized signatory with no rationale

-        Unexplained transfers between multiple accounts with no  rationale

Activity in Accounts

-        Unusual activity compared to past transactions

-        Use of different accounts by client alternatively

-        Sudden activity in dormant accounts

-        Activity inconsistent with what would be expected from declared business

-        Account used for circular trading

Nature of Transactions

-        Unusual or unjustified complexity

-        No economic rationale or bonafide purpose

-        Source of funds are doubtful

-        Appears to be case of insider trading

-        Investment proceeds transferred to a third party

-        Transactions reflect likely market manipulations

-        Suspicious off market transactions

Value of Transactions

-        Value just under the reporting threshold amount in an apparent attempt to avoid reporting

-        Large sums being transferred from overseas for making payments

-        Inconsistent with the clients apparent financial standing

-        Inconsistency in the payment pattern by client

-        Block deal which is not at market price or prices appear to be artificially inflated/deflated