Know your customer (KYC)

The objective of KYC  guidelines is to prevent banks  from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC procedures also enable banks  to know/understand their customers and their financial dealings better and manage their risks prudently.

Customer

For the purpose of KYC Norms, a ‘Customer’ is defined as a person who is engaged in a financial transaction or activity with a reporting entity and includes a person on whose behalf the person who is engaged in the transaction or activity, is acting.

Nomination:-
All account holders are requested to give nomination at the time of account opening. Nomination facility is available free of cost in every branch.
Account holder may change the name of nominee any time.

Periodic updation of KYC

A. Banks should carry out periodical updation of KYC information of every customer, which should include the following:

        i.  KYC exercise should be done at least every two years for high risk customers, every eight years for medium risk customers and every ten years for low risk customers. Such KYC exercise may include all measures for confirming the identity and address and other particulars of the customer that the bank  may consider reasonable and necessary based on the risk profile of the customer, taking into account whether and when client due diligence measures were last undertaken and the adequacy of data obtained.

      ii.   Banks  need not seek fresh proofs of identity and address at the time of periodic updation, from those customers who are categorised as ‘low risk’, in case there is no change in status with respect to their identities and addresses. A self-certification by the customer to that effect should suffice in such cases. In case of change of address of such ‘low risk’ customers, they could merely forward a certified copy of the document (proof of address) by mail/post, etc. Banks/FIs should not insist on physical presence of such low risk customer at the time of periodic updation. The time limits prescribed at (i) above would apply from the date of opening of the account/ last verification of KYC.

    iii.      Fresh photographs to be obtained from minor customer on becoming major.

B. Freezing and closure of accounts

        i.  In case of non-compliance of KYC requirements by the customers despite repeated reminders by banks, banks may impose ‘partial freezing’ on such KYC non-compliant accounts in a phased manner.

      ii.   During the course of such partial freezing, the account holders can revive their accounts by submitting the KYC documents as per instructions in force.

    iii.    While imposing ‘partial freezing’, banks have to ensure that the option of ‘partial freezing’ is exercised after giving due notice of three months initially to the customers to comply with KYC requirements to be followed by a reminder giving a further period of three months.

    iv.     Thereafter, banks/FIs may impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts.

      v.    If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’ banks should disallow all debits and credits from/to the accounts thereby, rendering them inoperative.

    vi.     Further, it would always be open to the bank to close the account of such customers after issuing due notice to the customer explaining the reasons for taking such a decision. Such decisions, however, need to be taken at a reasonably senior level.

KYC:-
As per RBI guideline you are requested to do the compliance of KYC documents.

Documents Required for KYC (Know Your Customer)