The Reserve Bank of India on Tuesday relaxed 'know your customer' norms by allowing self-certification of documents needed for opening bank accounts.
"With a view to easing difficulties faced by common people while opening bank accounts and during periodic updating, guidelines on KYC will be further simplified with immediate effect," the central bank said in its monetary policy statement.
RBI has asked banks to ‘allow self-certification; accept a certified copy of the document by mail/post’ for account opening.
Banks have also been asked not to seek fresh documents if an existing KYC compliant customer of a bank desires to open another account in the bank.
For periodic updating of KYC, the RBI told the banks not ‘insist on physical presence of the customer’ and also not seek fresh proof of identity and address in case of no change in status for 'low risk' customers.
The Reserve Bank further said there is a need for banks to complete KYC for all customers including long standing 'low risk' customers.
"Banks should complete documentation, while minimising the effort on the part of the customer to what is strictly needed," it said.
In the event that customers are unable to comply within a reasonable time period, 'partial freezing' may be introduced in respect of KYC non-compliant customers, RBI added.
This means credits would be allowed in such accounts while debits would not be allowed, with an option to the account holder to close the account and take back the money in the account.
