UNDERSTANDING KYC NORMS FOR OPENING A BANK ACCOUNT

M, ABIVARTHAN

The Reserve Bank of India announced Know Your Customer ( KYC) Master Directions in 2016. It has been under continuous updation, the recent amendment being in April 2020.

Recently updated KYC Norms prescribe a very simple method to open bank accounts from any place. As per the present norms, people can open bank accounts by submitting:

1. Proof of Identity

If a particular person does not have any of these documents, a Small Account with limitations can be opened.

2. Address Proof

Under the new KYC Norms people who migrate or who move between cities can easily open a bank account in any place of their convenience.

While opening a new bank account you can mention:

Under the New norms there is no necessity to produce separate proof required for current address.

3. A recently taken Passport Size Photograph.

Other Important Points to Remember:

➔ While transferring a bank account from one branch to another, there is no requirement for a separate KYC.

➔ Period of Updation: Low risk customers should update KYC once in 10 Years, while Medium Risk Customers should update once in 8 years & High Risk Customers should update once in 2 years.

➔ During KYC Verification there is some relaxation given to certain customers such as Members of Self Help Group (SHG) who are not required to follow KYC while opening a Saving Account; Only Officials of SHG need KYC.

➔ In case of foreign students, a time period of One Month is granted to update proof of address.