The central bank Wednesday eased compliance norms across the board for individuals, advising banks against physical presence of customers for KYC (Know Your Customer) verifications.
Bank customers are supposed to submit valid documents to remain compliant with KYC, a key measure that helps check banking frauds. Given the spread of the virus, KYC is required to be made without physical presence, the central bank said. Deadlines have also been extended.
“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) be imposed until December 31, 2021,” central bank governor Shaktikanta Das said.
Banks cannot block usual banking operations citing pending KYC updations after the central bank announcement.
The Reserve bank of India (RBI) extended 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.
Aadhaar-based e-KYC authentication in non-face-to-face mode can also be taken as fully KYC-compliant accounts.
“RBI allowing video KYC & other digital KYC methods to complete many requirements for renewal and new KYC will ease access to formal banking and digital payments. It has a timely and long-term positive impact,” tweeted Vijay Shekhar Sharma, founder Paytm.
The RBI also permitted submission of electronic documents through a dedicated process, which can be marked as “identity proof”.
The governor encouraged banks to use more digital networks instead of physical format for any update related to KYC.
It has been decided to rationalise certain components of the extant KYC norms. These include introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of the central bank said.
Account holders are requested to update their KYC during this period, RBI said.
