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KYC norms relaxed:

is a process where banks obtain information about their customers' identity. (Photo: Commons)

KYC norms relaxed: Here is what account holders must know

KYC norms relaxed: Amid the deadly second Covid wave, the Reserve Bank of India (RBI ) has come to the rescue of bank account holders. In an unscheduled announcement, RBI Governor Shaktikanta Das has asked banks and other regulated financial entities not to impose any punitive restriction against customers for failure to update KYC till December end. Due to the rise in COVID-19 cases and the resultant lockdowns in various states, it’s now not possible for customers to visit bank branches and complete the KYC,

“Further, keeping in view the COVID related restrictions in various parts of the country, Regulated Entities are being advised that for the customer accounts where periodic KYC updating is due/pending, no punitive restriction on operations of customer account(s) shall be imposed till December 31, 2021, unless warranted due to any other reason or under instructions of any regulator/enforcement agency/court of law, etc. Account-holders are requested to update their KYC during this period,” the RBI Governor said.

RBI has stepped in and announced a string of initiatives to enhance video KYC for customers. The regulator also extended the scope of video KYC (know-your-customer) or V-CIP (video-based customer identification process) for new categories of customers.

“Taking forward the initiatives of the Reserve Bank for enhancing customer convenience, it has been decided to rationalise certain components of the extant KYC norms. These include (a) extending the scope of video KYC known as V-CIP (video-based customer identification process) for new categories of customers such as proprietorship firms, authorised signatories and beneficial owners of Legal Entities and for periodic updation of KYC; (b) conversion of limited KYC accounts opened based on Aadhaar e-KYC authentication in non-face-to-face mode to fully KYC-compliant accounts; (c) enabling the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of electronic documents (including identity documents issued through DigiLocker) as identify proof; (d) introduction of more customer-friendly options, including the use of digital channels for periodic updation of KYC details of customers,” Shaktikanta Das said.

Recently, the State Bank of India (SBI) announced that it will allow customers to submit their documents for purpose of updating their KYC details, via email or post.

Know Your Customer ( KYC) is a process where banks obtain information about their customers’ identity thereby ensuring that bank services are not misused. Banks insist on updating KYC for account holders periodically. They need to visit their bank branch along with a set of self-attested documents, which include proof of identity and proof of address.

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