what does the bank mean by the purpose and nature of the relationship

What the bank records precisely regarding purpose and nature

The bank wants to know why your enterprise is opening an account or using a service and how that service will be used in practice. This is part of the customer due diligence that banks are required to perform, and it goes beyond ticking a box: the bank expects a description that matches what your enterprise actually does. Typical questions are: what is the core activity, who are the main customers and suppliers, in which countries is business conducted, and what cash flows are involved — amounts, frequency, currencies.

For a trading company that primarily uses the bank account for payments to foreign suppliers, "purpose" might be for example: working capital financing for purchasing, and "nature" would then be: periodic transfers in foreign currency to a fixed number of countries. The bank verifies this against other information available about the enterprise, such as the activity that is registered. If your answer does not align with this, a follow-up question usually follows, not an outright rejection. Because this is a recurring question with virtually every bank, the answer you record here in the chain file is the answer you can use each time again — provided the underlying facts have not changed.

Basis in the Wwft and the sector-wide FATF standards

The obligation to record the purpose and nature of the business relationship stems from the Anti-Money Laundering and Counter-Terrorism Financing Act (Wwft), which requires banks to perform customer due diligence before and during the establishment of a business relationship. This customer due diligence is modeled in the Netherlands and the EU on the recommendations of the Financial Action Task Force (FATF), the international body that sets the standards for anti-money laundering policy. The bank must not only know who you are, but also make it plausible that the transactions flowing through the account logically fit with that described activity. This touches on data you already record elsewhere, such as the sector in which the enterprise operates via in which sector is the enterprise active and the countries where business is conducted via in which countries does the company have operations. Consistency between those answers and the description of purpose and nature is precisely what these kinds of questionnaires test.