The bank wants documentation of the source of funds – what does that mean?

The bank wants to understand where the money actually comes from and how it connects to the business. It does not necessarily mean the bank thinks anything unlawful has happened. Answer precisely what the bank asked, rather than sending the whole set of accounts.

What does source of funds mean?

Source of funds is about how the money involved in the relationship or in a particular transaction was acquired. If NOK 800,000 arrives in the company's account, saying that it came from another bank is not necessarily enough. The bank may want to know what the money actually represents: payment from a customer, a loan, a capital contribution from the owner, the sale of an asset, a dividend, a transfer from another group company, or another documented source of income. Finanstilsynet makes clear that where the risk is higher, the information has to be substantive and explain how the funds were acquired – not just which account they came from.

Source of funds and source of wealth are not the same

Source of funds concerns the money involved in the particular transaction or relationship. Source of wealth is a broader question, about how the customer's or the owner's total assets were built up over time – through business profits, investments, inheritance or the sale of an earlier business. How far the bank needs to go depends on the risk in the specific case. For politically exposed persons the Anti-Money Laundering Act has its own rules expressly requiring measures to establish both the source of wealth and the source of funds.

Why is the bank asking now?

The bank has to follow the relationship on an ongoing basis and consider whether the transactions fit the business it knows, the expected use of the account, the customer's risk profile, the size and regularity of the transactions, the geography of the activity, and earlier information about the source of funds. A consultancy that normally receives Norwegian customer payments of NOK 50,000–100,000 and suddenly receives three million from a foreign company departs so far from what the bank expects that it may need a contract, an invoice and an explanation. The transaction may be entirely legitimate.

What documentation can the bank ask for?

There is no single document list that fits every case. The documentation should show what the transaction is, who the parties are and where the money comes from. For a customer payment that might be the invoice, the customer agreement, delivery documentation, the ledger and the bank transaction. For a loan to the company: the loan agreement, information about the lender, the bank transfer and the bookkeeping. For money from the owner: documentation of what the payment is for, the company documentation relating to the capital contribution, and the bank transfer. For the sale of an asset: the sale contract, the invoice, documentation of ownership and of the settlement. For a cross-border payment: who the counterparty is, the contract, the invoice, the purpose, and the connection between the counterparty and the business.

Make the documentation easy to check

What matters is not the volume of documentation but that the documents tell the same story: agreement, invoice, bookkeeping, bank receipt. If the bank asks about a customer payment of NOK 450,000, a short explanation can show which agreement the income relates to, which invoice was sent, how it was booked and which receipt in the bank settled it. The bookkeeping rules are built on there being an audit trail between the documentation and the entries. Documentation that hangs together like that is usually more useful than a large folder of unsorted vouchers.

What if the documentation is missing?

Try to obtain it first. Contact customers, suppliers, lenders or other parties and ask for copies. Where something does not exist, say so openly and put forward the documentation that does. Where the risk is high, Finanstilsynet expects the bank to make a reasonableness assessment of whether the information appears credible. It is not always possible to document wealth built up over many years down to the last krone, and Finanstilsynet accepts that documentation giving sufficient credibility can be enough.

What should you do when the bank asks?

Read exactly what the bank is asking. Identify the transaction or the flow of money the question concerns. Write a short explanation and attach the documents supporting it. Make sure the figures agree with the accounts and the bank, and answer any follow-up questions by the deadline. You do not automatically need to send the whole set of accounts or a SAF-T file if the bank has not asked for it.

What an accountant can and cannot do

An accountant can find the transaction in the accounts, pull out invoices and vouchers, connect the bank movement to the entry, reconcile inter-company balances, document loans and capital contributions, and organise the documents the bank has asked for. But an accountant should not guarantee that the money has a lawful origin, or that the bank will accept the documentation. The bank has an independent responsibility and has to make its own assessment.

This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.

Is it urgent?

We can work out what actually has to be done, what documentation exists and how quickly it can be sorted. You can also reach us in the evenings and at weekends.

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