KYC is necessary for opening and maintaining current accounts of individuals, proprietorship, partnership firms, corporates, trusts, Associations, societies, clubs etc. When the bank accounts of individuals are opened, banks mainly look into the identity and address proof of the applicant such as official valid documents (OVDs) like Aadhar card, Voter ID, PAN card, Driving License, Passport, NREGA Job card etc. If some other person is operating on behalf of the account holder as mandate holder or power of attorney, the OVDs of such persons also verified by the banks. In the cases of legal person/entity (other than non-natural persons) banks open the accounts only after verifying legal status of the entity, identities of promoters/directors/controllers and authorized signatories of the account. If the officially valid document submitted for opening a bank account has both, identity and address of the person, there is no need for submitting any other documentary proof separately for the purpose. In all the cases of account opening, photographs of the persons opening and operating the account shall be submitted to the bank. Accounts opened by other banks, Local Authorities and Government Departments (excluding public sector undertakings or quasi-Government bodies) are exempted from the requirement of photographs.
As per RBI guidelines, in addition to seeking NOC from the existing bankers of the prospective current account customer, banks should seek information from CRILC and verify the data received from the CRILC, whether the prospective customer is enjoying credit facilities from another bank. Also, banks have to seek ‘No Objection certificate’ from the drawee bank where the initial deposit to current account is made by way of a cheque.
Banks prescribe threshold limits for a particular category/categories of accounts based on risk perception as low risk, medium risk, high risk, exceptionally high risk etc. and fix the risk level threshold limit to each account in order to monitoring transactions of cash and transactions of suspicious nature in the account and reporting it to appropriate authority as per KYC norms/AML standard.
The KYC documents obtained by banks for various categories of accounts are as under.
Proprietary concerns:
Partnership firms;
Companies:
Trusts & foundations
Body of individuals (includes societies, educational institutions, Associations, Clubs, etc.)
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