Category: AML & CFT

Let me guess – you’ve seen ‘PAN 2.0 Project’ floating around your feeds or news, probably sandwiched between market updates and tech innovations. 

The next thing you did was Google it…and now we are here. 

So, out of respect for your time, we are directly getting to the point – covering everything you need to know about the Indian Government’s new PAN 2.0 project. 

Whatever doubts you now may have – what is PAN 2.0? Why do we need a new PAN? How to get a new PAN? Will my old PAN become invalid? What are new regulations around it? – all will be answered by the final paragraph.

If you have the next 9 minutes – here are the answers to 10 most common questions you may have about PAN 2.0 project – all sourced from official government resources. 

1. What is PAN 2.0?

PAN 2.0 is the Income Tax Department’s new ₹1,435 crore digital upgrade that consolidates all PAN services into a single unified portal, making tax identification simpler and more secure for everyone in India.

2. How is PAN 2.0 different from traditional PAN?

Remember those times when handling PAN-related tasks meant jumping between different websites and portals? That’s about to change. PAN 2.0 Project brings together three separate systems (e-Filing Portal, UTIITSL Portal, and Protean e-Gov Portal) – everything will now be available in one place. 

The project was introduced in the November 25, 2024, Cabinet Briefing by Union Minister Ashwini Vaishnaw. 

“A new form of common business identification for India is needed, for which PAN 2.0 has been approved today. It will be completely paperless, completely online, and there will be a strong focus on the grievance redressal system – how to quickly solve any difficulties faced by any users.” The Union Minister said.

PAN 2.0 Project – Quick Benefits

• The PAN 2.0 project introduces smart features like encrypted QR codes that contain secure identification details, making verification as simple as scanning a code.
• The system brings in something called a “single source of truth,” ensuring that whether you are checking your customer’s PAN with a bank or a government office, you’ll be seeing the same, accurate information.
• PAN 2.0 will act like a digital secretary, handling verification tasks that once required manual checking. Real-time validation capabilities mean faster service delivery – especially important for financial institutions processing numerous applications daily.
• For regular cardholders, this means no more waiting in queues for updates or corrections. Need to change an address or update contact details? The system handles these changes digitally, often in real time. 
• The enhanced QR code system adds an extra layer of security, making identity theft significantly harder.

3. What is the Common Business Identifier in PAN 2.0 project?

The Common Business Identifier (CBI) in PAN 2.0 project combines PAN, TAN, and TIN into a single identification number for businesses. As clarified by Union Minister Ashwini Vaishnaw, this integration responds to industry demands for a unified business identifier across government platforms. 

Think of it as turning your PAN into a master key. Instead of carrying different keys (identification numbers) for different locks (government departments), businesses will use one key that works everywhere. 

For instance, a business that currently uses separate numbers for tax deduction (TAN), tax collection (TIN), and permanent account (PAN) will soon manage everything through one identifier. This consolidation simplifies compliance, reduces paperwork, and creates a more efficient system for business-government interactions.

4. How will PAN 2.0 affect businesses and taxpayers?

For years, India’s bureaucratic innovation followed a predictable pattern: take a paper-based system, digitize it, call it e-something, and hope for the best. However, the PAN 2.0 project signals something different. 

It’s bringing major changes to business operations through streamlined identity verification, unified data systems, and automated compliance, which can impact business in endless ways.

• Single Portal Access: All PAN and TAN-related services – from applications to corrections – will move to one centralized Income Tax Department portal. This replaces the current scattered system of using separate websites for different services.
• Real-time Validation Services: Organizations gain access to immediate online PAN validation. This particularly impacts banks, financial institutions, and businesses handling large volumes of customer onboarding.
• Data Vault Requirements: Financial institutions and businesses must now store PAN data in a mandatory secure vault system. This new regulation applies to banks, insurance companies, and any organization that collects PAN information.
• Simplified Verification Process: The enhanced QR code system transforms how businesses verify identities. Instead of manual document checks, a simple scan provides instant access to encrypted identification details.
• TAN/TIN Integration: Tax Deduction Account Number (TAN) services merge into the same system. For businesses handling TDS, this means managing tax deduction responsibilities through the same portal as PAN services.
• Inter-departmental Communication: The system enables better information sharing between different government departments. This reduces redundant document submissions for businesses dealing with multiple agencies.

5. Is my old PAN card still valid?

Yes, existing PAN cards remain completely valid under the new PAN update. The government’s official press release has made this crystal clear in their official communications: there’s no mandatory requirement to upgrade existing cards.

Still, those with older PAN cards (especially ones without QR codes) might want to consider an upgrade. Why? The new cards come with enhanced security features that make identity verification faster at banks and financial institutions. But there’s no rush – the choice to upgrade stays entirely with the cardholder.

6. What is the cost of PAN 2.0 card?

A new physical PAN 2.0 card costs ₹50 for domestic delivery and ₹15 + postal charges for international delivery. The good news? The e-PAN version, which carries the same legal validity as the physical card, comes at absolutely no cost. It’s delivered directly to your registered email address, typically within 24 hours of application approval. Plus, all online corrections and updates to your PAN details come free of cost under the new system.

7. How to apply for PAN 2.0?

So, while you will find tons of step-by-step answers showing up as you search “how to apply for PAN 2.0”, the real answer is there’s no official process yet. Most of the answers present on the internet currently will just help you download e-PAN, which is not new, and not PAN 2.0 either; rather, it’s only a PDF version of your physical PAN. You can always come back here, and we will update this part as soon as any official process to apply for PAN 2.0 (or e-PAN 2.0) rolls out.

8. How to download e-PAN 2.0?

Again, as stated in the last section, there’s no formal process to get PAN 2.0 yet. You can download the ePAN, though (not e-PAN 2.0). The process is: head to the NSDL portal, log in with secure credentials, navigate to the ‘Download e-PAN’ section, verify identity through OTP, and download the document.

Store your e-PAN on both cloud storage and local devices. Being digital doesn’t make it any less official – the e-PAN carries the same validity as a physical card for most purposes.

9. PAN 2.0 Documents Required List

Like PAN, you mainly need to provide one identity proof like an Aadhaar card or passport and one address proof like a utility bill or bank statement. Here’s a complete list of essential documents needed for PAN 2.0:

• Identity proof (any one): Aadhaar Card (preferred), passport, Voter ID card, driving license.
• Address proof (any one): Utility bills (not older than 3 months), bank statement/passbook, rental agreement, Property documents.

10. How can businesses verify PAN cards now?

While PAN 2.0 project promises future enhancements, businesses currently need robust solutions for PAN verification. The transition period requires reliable systems that can handle both existing PAN cards and the upcoming PAN 2.0 format, ensuring continuous operations without disruption to customer service.

While the PAN 2.0 project rollout continues, businesses and financial institutions need to maintain efficient verification processes for the millions of PAN cards in circulation. Signzy supports this critical need through its Digital Onboarding Solutions and PAN Verification API, helping organizations streamline their verification processes while the new system takes shape.

Transaction Monitoring in Anti-Money Laundering (AML) is a pivotal tool in the fight against financial crime. It involves scrutinizing financial transactions to detect suspicious activities indicative of money laundering. This process not only helps in identifying potential risks but also ensures compliance with increasingly stringent regulatory standards. Understanding its mechanisms and applications is crucial for maintaining the integrity of financial systems.

In today’s global financial landscape, the battle against financial crimes, particularly money laundering, is a top priority for governments, regulatory bodies, and financial institutions. According to the United Nations Office on Drugs and Crime (UNODC), the estimated amount of money laundered globally in one year is 2-5% of global GDP, which translates to $800 billion – $2 trillion. This statistic underscores the cruciality of Anti-Money Laundering (AML) measures. 

The Critical Role of Transaction Monitoring in AML

It is a fundamental component of AML efforts that aims to identify and investigate unusual or suspicious financial activities. Its primary role is to track financial transactions in real-time or retrospectively, analyze patterns, and flag potential red flags that could indicate money laundering, terrorist financing, or other illicit activities. Transaction monitoring acts as the eyes and ears of AML compliance programs, helping to maintain the integrity of the financial system.

Mechanisms of Transaction Monitoring

It relies on sophisticated algorithms and technology-driven processes to scrutinize vast amounts of financial data. Here’s how it works:

Data Collection: Transaction monitoring starts with the collection of transaction data from various sources, including banks, financial institutions, and other relevant entities. This data encompasses a wide range of financial activities, from wire transfers and cash deposits to credit card transactions.

Pattern Recognition: Advanced software is employed to analyze the collected data. These systems utilize predefined rules and algorithms to detect patterns that deviate from the norm. These patterns can include unusually large transactions, frequent international transfers, or transactions involving high-risk jurisdictions.

Alert Generation: When the monitoring system identifies a transaction that matches predefined suspicious patterns or criteria, it generates an alert. These alerts are sent to compliance officers for further investigation.

Investigation and Reporting: Compliance officers review the alerts generated by the system. They conduct in-depth investigations to determine whether the flagged transactions are indeed suspicious or potentially indicative of money laundering or other financial crimes. If warranted, they escalate the case for further action, including reporting to regulatory authorities.

Challenges in Transaction Monitoring:

While it is a powerful tool in the fight against money laundering, it is not without its challenges:

• The sheer volume of financial transactions can be overwhelming. Monitoring systems must process and analyze massive datasets, which can be a resource-intensive task.
• Transaction monitoring systems often generate false positives, flagging legitimate transactions as suspicious. This can lead to increased workload for compliance officers and potential delays in processing legitimate transactions.
• Criminals are constantly evolving their money laundering tactics. They employ increasingly sophisticated methods to evade detection, making it challenging for transaction monitoring systems to keep up.
• AML regulations are subject to change and vary from one jurisdiction to another. Compliance with these evolving regulations adds complexity to transaction monitoring.

Importance in Preventing Financial Crimes

Transaction monitoring plays a crucial role in preventing financial crimes, and its importance cannot be overstated:

• Transaction monitoring helps detect unusual or suspicious activities that may be indicative of money laundering, terrorist financing, or other financial crimes. 
• The knowledge that transactions are being actively monitored acts as a deterrent to would-be money launderers and criminals. The risk of being caught discourages illicit financial activities.
• Financial institutions are legally obligated to comply with AML regulations. Effective transaction monitoring helps institutions fulfill their compliance obligations. This reduces the risk of regulatory penalties and reputational damage.
• The Financial Action Task Force (FATF) states that transaction monitoring is a key component of a robust AML/CFT (Countering the Financing of Terrorism) regime and emphasizes its importance in mitigating financial crime risks.

Conclusion

Transaction monitoring is the vigilant guardian of the financial system. Its sophisticated mechanisms, fueled by advanced technology and intelligent algorithms, play a crucial role in identifying and preventing financial crimes like money laundering, terrorist financing, and fraud.

As statistics show, the global financial system is vulnerable to these crimes, with money laundering alone estimated to reach a staggering $1.6 trillion annually. This alarming trend underscores the critical need for robust transaction monitoring systems.

Signzy’s Data Breach API serves as a powerful shield in this fight. This innovative tool provides real-time insights into data breaches, enabling financial institutions to verify the integrity of customer information and identify potential threats. By integrating the Data Breach API into their transaction monitoring systems, institutions can identify compromised credentials, prevent fraudulent transactions, and enhance compliance. Protecting sensitive data is paramount in today’s digital landscape, and Signzy’s Data Breach API is your ally in this endeavor. 

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
Contact us directly!

The financial system, a vital artery of the global economy, faces a critical vulnerability – the infiltration of illicit funds. Money laundering, the process of disguising the origins of criminally acquired proceeds, and its sinister cousin, terrorist financing, pose serious threats to national security, financial stability, and public trust. To stand guard against these shadows, a robust framework of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) controls has been erected by regulators and embraced by responsible financial institutions, including banks.

Understanding the Threat Landscape

Money laundering involves disguising the origin and ownership of illegally obtained funds. Criminals employ sophisticated techniques like structuring, layering, and placement to integrate dirty money into the legitimate financial system. These funds then fuel criminal enterprises, ranging from drug trafficking to human trafficking, eroding public trust and undermining the rule of law.

Terrorist financing, on the other hand, involves raising and moving funds to support terrorist activities. This can include financing operational logistics, propaganda, recruitment, and even attacks. Terrorist groups exploit legitimate financial channels, such as charities or money service businesses, making detection and disruption crucial to preventing violence and instability.

The Framework of Defense: International Standards and Regulatory Landscape

Combatting these threats requires a multi-pronged approach, with the Financial Action Task Force (FATF) playing a central role. The FATF sets global AML/CFT standards through its 40 Recommendations, encompassing customer due diligence, suspicious activity reporting, and international cooperation. These recommendations are then translated into national laws and regulations by individual countries.

Implementing these international standards takes shape for banks through comprehensive AML/CFT programs. These programs encompass a range of controls, including:

Customer Due Diligence (CDD): This involves verifying the identity and legitimacy of customers, understanding their business activities and expected transaction patterns, and monitoring their accounts for suspicious activity. Enhanced CDD may be required for high-risk customers, such as those from politically exposed countries or with opaque business models.

Know Your Customer (KYC): KYC is a core component of CDD, focusing on understanding the customer’s identity, purpose, and risk profile. This helps banks identify and mitigate potential risks associated with money laundering or terrorist financing.

Suspicious Activity Reporting (SAR): Banks are obligated to report transactions that appear suspicious or inconsistent with a customer’s profile. This allows law enforcement to investigate and potentially identify illicit activity.

Transaction Monitoring: Banks employ sophisticated technology and analytical tools to monitor customer transactions for patterns indicative of money laundering or terrorist financing. These tools can flag suspicious activity for further investigation by compliance personnel.

Sanctions Compliance: Banks must comply with sanctions imposed by international organizations and national governments against individuals and entities involved in terrorism, drug trafficking, and other illegal activities.

Challenges and Continuous Improvement

Effectively implementing these controls is an ongoing challenge for banks. The evolving nature of criminal and terrorist tactics requires constant adaptation and innovation. Technology can be a powerful tool, but it also presents opportunities for exploitation by criminals. Additionally, international cooperation and information sharing are crucial for effectively tracking and disrupting illicit financial flows.

Despite the challenges, banks play a crucial role in safeguarding the integrity of the financial system and protecting society from the harmful effects of money laundering and terrorist financing. By continuously strengthening their AML/CFT frameworks, banks can contribute to a safer and more secure world.

Conclusion

The battle against financial crime demands constant vigilance and adaptability. While traditional AML/CFT frameworks provide a solid foundation, the ever-evolving criminal scape needs something more effective. This is where Signzy’s Data Breach API emerges as a game-changer. The API offers a powerful tool to help banks enhance their AML and CTF efforts. By leveraging this API, banks can access real-time data breach information. This enables them to identify potential vulnerabilities and strengthen their security measures.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
Contact us directly!

As the threat of financial fraud is increasing day by day, regulators are worried about how to tackle this. The Department of Financial Services (DFS), Ministry of Finance, recently spearheaded a crucial meeting in New Delhi. Attended by key stakeholders from diverse sectors, the gathering aimed to address the mounting concerns surrounding cyber security in the financial landscape.

Tackling Digital Payment Frauds: A Unified Approach

The meeting focused on the escalating trend of digital payment frauds, underscoring the imperative for a cohesive strategy to protect citizens’ financial well-being. A pivotal achievement emerged as 70 lakh mobile connections linked to cybercrimes and financial frauds were disconnected through digital intelligence platforms, safeguarding 3.5 lakh victims from potential losses totaling Rs. 900 crore.

Key Takeaways:

1. Strengthened Coordination: Emphasis was placed on seamless collaboration between law enforcement agencies, banks, and financial entities to swiftly track and block fraudulent transactions.
2. Expanded CFCFRMS Platform: A call was made to bring all financial institutions under the ‘Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS)’ platform, with 259 already onboarded.
3. Combating Mule Accounts: Banks were urged to devise effective strategies to combat the use of mule accounts for laundering illicit funds.
4. Enhanced Response Time: Banks were instructed to improve their response time in handling alerts on online financial frauds from various agencies.
5. Nodal Officers for Law Enforcement: The recommendation was made for banks and financial institutions to appoint regional/state-level nodal officers to facilitate smooth coordination with law enforcement agencies.
6. Centralized Merchant Registry: The establishment of a centralized registry for onboarding merchants and standardization of KYC procedures was emphasized.
7. Whitelisting Digital Lending Apps: A consultative approach was advocated to whitelist digital lending apps, ensuring adherence to regulatory guidelines.
8. Digital Lending Working Group Recommendations: Progress on implementing the Digital Lending Working Group’s recommendations, including the establishment of DIGITA and the ‘Banning of Unregulated Lending Activities (BULA) Act,’ was reviewed.
9. Customer Awareness and Sensitization: Stakeholders were urged to undertake comprehensive customer awareness and sensitization programs to promote digital payment security.

Insights from Stakeholders

Insightful analyses were presented by the Indian Cyber Crime Co-ordination Center (I4C), Ministry of Home Affairs, utilizing data from the National Cyber Crime Reporting Portal (NCRP). The State Bank of India (SBI) shared experiences with the Proactive Risk Monitoring (PRM) strategy, highlighting its effectiveness. PayTM and Razorpay representatives contributed best practices, showcasing their strategies for preventing and detecting online financial frauds.

Signzy’s Role in Combating Digital Payment Fraud

In a world where the financial landscape is continually evolving, staying ahead of potential fraud risks has never been more critical. Financial institutions, UPI companies, e-commerce giants, and card issuers all grapple with the challenge of identifying and mitigating fraudulent transactions while adhering to strict compliance regulations. Enter Signzy, a pioneering company that has revolutionized the way we approach fraud risk management with its innovative and compliance-focused product.

Real-time Fraud Detection and Prevention

Signzy’s robust solution is engineered to monitor transactions in real-time, supporting all modes of transactions, including debit card transactions, credit card purchases, net banking, AML, UPI payments, wallet transactions, POS/PG transactions, AEPS transactions, and more. This real-time monitoring ensures that fraudulent transactions are promptly addressed, mitigating the financial losses and reputational damage that can result from delayed fraud detection.

Signzy’s Core Components:

Fraud Risk Management: This forms the backbone of the system, identifying and flagging potential fraudulent transactions through advanced algorithms and real-time data analysis.

Rule Engine: Signzy’s rule engine is highly adaptable, allowing clients to add new rules or modify existing ones according to their specific requirements. This flexibility empowers organizations to stay agile in the ever-changing landscape of financial fraud.

Negative Due Diligence: This component is crucial for conducting thorough background checks on transactions and customers, further enhancing the accuracy of fraud detection.

Chargeback Tool: Signzy’s chargeback tool streamlines the process of managing chargebacks, making it quicker and more efficient.

Periodic Monitoring: Monitoring Business Entities, individuals, merchants (both offline and online) proactively by ensuring they are continuously watched to avoid potential fraud losses post onboarding.

Seamless Integration:

One of the standout features of Signzy’s product is its ease of integration. Companies like UPI giants PhonePe, Paytm, and GPay, banks, e-commerce titans like Flipkart, Myntra, Amazon, and Nykaa, as well as card issuers such as VISA and Mastercard can all integrate Signzy’s solution using a single API within just 48 hours. In contrast, traditional methods often take around six months for banks to implement.

Moreover, Signzy’s platform allows for data feeding in simple formats, making it adaptable to the unique needs of each organization. It’s a no-code platform, which means that clients have the autonomy to blacklist or whitelist specific transactions. If there’s a noticeable trend of fraudulent transactions originating from the same location or IP address, the system can swiftly block that entire location and source, providing an extra layer of security.

AML-Sanction Screening:

Signzy’s solution doesn’t stop at fraud prevention. It also incorporates Anti-Money Laundering (AML) and sanction screening processes, ensuring compliance with international financial safety standards.

Time and Cost Savings:

The benefits of Signzy’s product are substantial. While traditional compliance management often takes banks 10-12 months to implement, Signzy’s solution reduces this time frame to just two weeks. Smaller companies can integrate it in as little as 3-4 days, giving them an edge in rapidly changing markets.

Signzy’s product is PCI-DSS compliant, which is essential for maintaining the highest safety standards. This compliance also allows for immediate rule additions and modifications, ensuring that your organization is always up to date with the latest security measures. The product also includes a case management tool, enabling organizations to act and respond swiftly to any security incidents, further reducing the potential damage of fraud.

Enhanced Customer Confidence:

In addition to the substantial time and cost savings, Signzy’s product also enhances customer confidence. With the ability to swiftly identify and address fraudulent activities, customers can trust that their financial transactions are secure. The real-time monitoring and instant response to potential fraud provide peace of mind, resulting in higher customer satisfaction and retention. This boost in confidence can also lead to increased transaction volumes and customer loyalty, giving businesses a competitive edge in the market.

Unparalleled Flexibility:

Signzy’s solution is designed to evolve with your business. Its adaptable rule engine enables clients to not only add or modify rules but also tailor the system to meet the unique needs of their industry. This flexibility is invaluable in today’s fast-paced financial world, where new fraud tactics and trends emerge regularly. Whether it’s a UPI company, a bank, an e-commerce giant, or a card issuer, Signzy’s product empowers them to stay one step ahead of fraudsters without the constraints of rigid systems.

With the help of Signzy’s cutting-edge technology, businesses can keep one step ahead of fraudsters in the never-ending game of cat and mouse. The real-time monitoring tool quickly detects and flags any suspicious trends or abnormalities by keeping a close watch on transactions. Its flexible rules framework ensures that the system changes and fortifies its defenses over time by enabling a dynamic reaction to new threats. Additionally, the quick integration capabilities allow clients to be onboarded with ease and minimise operational interruptions. Clients and end users may feel secure knowing that every transaction complies with the strictest industry standards and legal requirements thanks to the extensive compliance capabilities.To put it simply, Signzy’s ground-breaking solution is evidence of the company’s dedication to pushing the boundaries of financial security and dependability in a time when technical advancement and trust are critical.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
Contact us directly!