Know Your Customer (KYC) Norms
The Reserve Bank of India advised banks to make the Know Your Customer (KYC) procedures mandatory while opening an account, bank has to ensure that the prospective customer is the person who he\she claims to be. This is to prevent fraudsters using the name, address and forged signature of other for doing fraudulent transaction, benami transactions, encashment of stolen cheques, draft, divident, warrants, etc.
Relaxed KYC Procedure
The relaxation in KYC procedures is applicable for low-income group customer. Individuals falling under the 'No Frill Accounts'. Low income group customers are those who keep balances not exceeding Rs. 50,000 in all their account (FDR/CA/SB) taken together and total credit summation in all the accounts taken together is not exceed Rs. 1 lakh in a year.
Documents for Opening Account
In order to open an account in any bank, one has to submit various documents as prescribed under KYC norms.
The Reserve Bank of India advised banks to make the Know Your Customer (KYC) procedures mandatory while opening an account, bank has to ensure that the prospective customer is the person who he\she claims to be. This is to prevent fraudsters using the name, address and forged signature of other for doing fraudulent transaction, benami transactions, encashment of stolen cheques, draft, divident, warrants, etc.
The relaxation in KYC procedures is applicable for low-income group customer. Individuals falling under the 'No Frill Accounts'. Low income group customers are those who keep balances not exceeding Rs. 50,000 in all their account (FDR/CA/SB) taken together and total credit summation in all the accounts taken together is not exceed Rs. 1 lakh in a year.
Documents for Opening Account
In order to open an account in any bank, one has to submit various documents as prescribed under KYC norms.
The documents required by the bank under KYC
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'Proof of identify' under KYC : These six documents are passport, Driving Licence, Voter's Identity Card, PAN Card, Aadhar Card issued by UIDAI and MNREGA Job Card. Customer need to submit any one of these documents as proof of identity.
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'Proof Of Address' for bank : Bank statement, electricity/telephone bill, credit card statement (should be not more that 3 months old.) Or, any officially valid document which contains address details.
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New Guideline for KYC
- RBI has rectified the criteria of KYC for dealing with the problems coming in the completion of KYC process of identification of bank customer. The guideline related to this were issued on 23rd July, 2013.
- As per revised laws of RBI, the KYC formation must be fulfilled in the following format
-- Medium risk customers - Once in 8 years.
-- Low risk customers - Once in 10 years.
- As per the RBI's new rules, banks are allowed to adopt system of current identification for making strong relation with their customers.
