Central Bank requires banks to follow Know Your Customer (KYC) guidelines

In line with global trends, the Central Bank of Lesotho has issued the Financial Institutions (Know You Customer) Guidelines, 2007.  The Guidelines require financial institutions to ensure that they know their own customers.   To this end they are required to put in place the Know Your Customer policies which include Customer Acceptance Policy; Customer Identification Procedures, Monitoring of Transactions and Risk Management.

When opening the account, the banks’ potential customers are required to provide the following information.

a)       customer’s identity;

b)       nature of business activity

c)       location of customer

d)       mode of payments

e)       volume of turnover

f)         public or high financial status

g)       product type

h)       source of funds

i)         transaction type

j)         transaction value

k)       type of entity

l)         any other matter that a bank may find fit to consider.

It should be borne in mind that majority of bank customers have a long standing business relationship with their banks, having opened accounts long before coming into operation of the Know Your Customer Guidelines. Currently the information regarding the customers’ location requires verification by a chief’s letter or utility bill.  Customers are requested to bear with the banks when requested to provide additional information as is a requirement to prove their residency and source of income.

The Financial Institutions (Know Your Customer) Guidelines, 2007 came into operation in 19th January, 2007.

 Public Relations Office - 2009 January 09