RBI eases KYC norms for banks

No need to insist on introduction by existing customer to open an account

The Reserve Bank of India (RBI) today eased the mandatory know your customer (KYC) norms for banks so that opening a bank account will be simple and hassle-free.

In a communication to banks, RBI asked them not to insist on introduction by an existing customer while opening a new account, as it is not mandatory under any rule of the central bank. If the identity proof has an address that is the same as the address on which an account is being opened, then there is no need for a separate address proof, said the RBI.

Currently, banks ask for separate documents for the identification and address verification process. But, in the case the address on the account opening form is different from the address stated in the identity proof document, then the banks should obtain a separate proof of address. The banking regulator has allowed rent agreements registered with the state government or any other registration authority as a proof of address.

RBI SAYS

• No need of ‘introduction’ by an existing customer
• Aadhaar to be accepted as proof of identity & address
• It allows rent agreements as a valid proof of address
  
• Job cards given under MGNREGA will be a valid document

The central bank has asked banks to accept Aadhaar cards, as both identity and address proof, if the address on the account opening form and Aadhaar are the same. RBI said the Unique Identification Authority of India (UIDAI) had conveyed that banks are accepting the Aadhaar letter issued by it as a proof of identity, but not of the address.

The regulator had earlier advised banks to satisfy themselves with the current address of the customer even if he files Aadhaar as proof of identity. It also said job cards given under the rural job scheme should be accepted as a valid document to open bank accounts. Earlier, accounts opened using job cards were subject to the limitations applicable to small accounts.