RBI rationalizes certain components of extant KYC norms

(No punitive restrictions on Account Operations for non compliance of periodic upation of KYC till Dec 31)

Reserve Bank of India on Wednesday advised Banks and other Regulated Entities (REs) that in respect of the customer accounts where periodic updation of KYC is due and pending as on date, no punitive restrictions on operations of such account shall be imposed till December 31, 2021. It was clarified that the operation may be allowed only for the above reason alone, unless warranted due to any other reason under instructions of any regulator/ enforcement agency/court of law, etc. Account holders are requested to update their KYC during this period. RBI said that the above announcement made due to current COVID-19 related restrictions in various parts of the country.

Rationalisation of Compliance to KYC Requirements

In an unscheduled speech of 5^th May RBI Governor Shri.Shaktikanta Das made an announcement that “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 on the basis of 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 identity proof;

(d) Introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of customers.

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