When your bank's pattern detection flags your account, you enter an AML review. It's not a freeze (necessarily), but it's a process with consequences ranging from minor to severe.
Triggers
High-frequency UPI to/from the same merchant ID (P2P pattern).
Volume mismatch with declared income on KYC.
Sudden activity change after a long dormant period.
Cross-border crypto on/off-ramp signatures.
Round-trip transfers (money out and back to similar amounts).
What the review looks like
Stage 1: Bank requests explanation in writing — typically a form asking source of funds, nature of business, declared income.
Stage 2: If unsatisfied, bank requests supporting documents (ITR, employment proof, exchange statements).
Stage 3: Either resolution (account stays open with possibly tighter limits) or escalation (account closure with notice).
How to respond
Cooperate fully and quickly. Provide ITR, KYC of exchanges, trade history exports, employment proof. The faster and more comprehensive, the more likely the review resolves cleanly.
Don't lie or hedge. If asked about crypto, say so plainly. Banks aren't required to close accounts of crypto traders; they're required to assess AML risk. Honesty resolves; obfuscation escalates.
Key takeaways
- AML reviews trigger on patterns: high frequency, volume mismatch, cross-border, round-trips.
- Three stages: explanation request → documents request → resolution or closure.
- Cooperate fully and provide full ITR + exchange records.
- Honesty about crypto trading resolves; hiding it escalates.
