December 18, 2012

Bank Account Opening-Read these modified KYC norms

With the existing norms of KYC lot of customers felt it difficult in obliging to the norms mentioned their. In view of this, RBI recently modified few of KYC norms which will make life easier for customers who are not KYC complied and interested to open the account. Let us see few of these changes in detail.

1) Opening of new accounts-In it’s previous circular RBI listed the nature of documents required to identify the customers but that list was only indicative not the exhaustive. For individuals separate sets of documents was required to prove their identity and address proof. Because of this earlier notification, banks used to call separate sets of documents for identifying person and address. But in reality documents like Passport, Driving licence etc., used to contain both identification and address. But customers need to provide two sets of documents to prove their identity and address.

To ease this burden from now onwards customers need to follow these below modified rules.

  • If address mentioned during account opening and the address on the identity proof submitted is one and same then the same document need to be considered as valid proof of both identity and address.
  • If this address not matches then from now onwards even rental agreement which is duly registered with State Govt. or similar registration authority may also be accepted as a proof of address.

2) Introduction not mandatory to open accounts:-As of now it is now mandatory to get the introduce signature to open the new bank account. This faces a big hurdle for few customers to search for the existing customers and get the introduction from them. Hence from now onwards it is not mandatory to get the introduce signature.

3) Acceptance of Aadhaar letter for KYC purpose-It is normal practice as of now from banks to not accept Aadhaar as proof of identity but not as proof of address. As it is indicated above point 1(1), this proof also contains address. Hence from now onwards Aadhaar card is a valid identity proof and address proof too.

4) NREGA (National Rural Employment Guarantee Act) Job card for KYC-As of now NREGA Job card is treated as valid proof for opening of “small accounts”. But from now onwards this proof can also be used to open all other types of accounts too.

5) Accounts with Introduction:-Existing provisions with restrictions on total credits and outstanding balance, with introduction from an existing account holder or other evidence of identity and address proof to the satisfaction of banks, made to help persons who were not able to provide “official valid documents” for opening accounts. Now “Small Accounts” are too included in PML Act the earlier circulars of related to “small accounts” stand withdrawn (Those circulars are 1) circulars PCD.No.RRB.BC.33/03.05.33(E)/2005-06 dated August 23, 2005 and RPCD.RF.AML.BC.NO.32/ 07.40.00/2005-26 dated August 23, 2005).

Hope these new modification now ease the KYC process which you follow during your bank accounts.

(For further details your may refer RBI notification RBI/2012-13/331 RPCD.CO.RRB.RCB.AML.No. 6097/7.51.018/2012-13 dated 13th Dec 2012)

 

 

2 Comments

  1. Thanks Basavaraj for ur article on modified KYC norms for banks. I am sure you must have meant “Introducer’s signature” and not intruder’s signature, i suppose….!!!

    Reply
    • Balagopal-Thanks for correcting it 🙂

      Reply

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