RBI eases KYC process

KYC means Know Your Customer and sometimes Know Your Client. KYC or KYC check is the mandatory process of identifying and verifying the client's identity when opening an account and periodically over time. KYC, customer identification is the most critical aspect as it is the first step to better perform in the other stages of the process.

The banks should not be demanding that the customers should walk into the bank branch for verification/ to update the KYC. The RBI said customers can use registered email IDs, registered mobile numbers, ATMs, digital channels (such as online banking/internet banking, mobile application), letters, etc. to do re-KYC, without the need for a visit to the bank branch.

KYC procedures defined by banks involve all the necessary actions to ensure their customers are real, assess, and monitor risks. These client-onboarding processes help prevent and identify money laundering, terrorism financing, and other illegal corruption schemes.

Previously, some customers were told to visit branches to redo their know-your-customer formalities despite the digital re-KYC mandate by the Reserve Bank of India. Others faced technical glitches on websites and mobile applications.

The RBI governor Shaktikanta Das said that the banks should not be demanding that the customers should walk into the branch for verification and updates. The official documents that the banks accept for KYC verification are passports, Aadhaar, Voter ID, MANREGA job card, and letter issued by National Population Register.

It further says, if there is no change in the KYC, a self-declaration from the individual customer is sufficient to complete the re-KYC process, the RBI said in a release.

“Fresh KYC process can be done by visiting a bank branch, or remotely through a Video based Customer Identification Process (V-CIP) (wherever the same has been enabled by the banks), as provided in Section 18 of the Master Direction on KYC,” the RBI said in a statement.

As per the central bank, Banks have been advised to provide a facility of such self-declaration to the individual customers through various non-face-to-face channels. It’s definitely a big relief for the netizens in the country.