The Reserve Bank of India (RBI) on Wednesday amended its Know Your Customer (KYC) norms to bring them in line with recent changes in the Prevention of Money Laundering (Maintenance of Records) rules.
As per the amendment in the master direction, regulated entities (REs) under the KYC Direction, 2016 will have to implement customer due diligence (CDD) process at the Unique Customer Identification Code (UCIC) level.
Under this, if an existing KYC compliant customer of a RE wants to open another account or take another product or service from the same RE, then there will be no need to go through the CDD verification process again regarding the identity of the customer. In this regard, the Reserve Bank of India (RBI) circular said that the revised provisions in the master direction are effective immediately.
RBI said, “Whenever a RE receives additional or updated information from a customer, the RE shall, within seven days or within such period as may be notified by the central government, provide the updated information to CKYCR, which shall update the existing KYC record of the customer with CKYCR.” CKYCR is an entity that receives, stores, secures and retrieves KYC records of a customer in digital form.
What is KYC
The full form of KYC is Know Your Customer. It is a process through which banks, insurance companies and other financial institutions verify the identity and address of their customers. KYC lets institutions know whether their customers are actually who they claim to be.
Why KYC is necessary
The KYC process prevents illegal activities such as money laundering or fraud. It reveals the customer’s identity and address, as well as their name, contact and employment details. The KYC process is usually done in person. However, it can also be done online through digital banking.
Documents required for KYC
Documents like Aadhaar Card, PAN Card, Passport, Driving License, Voter ID Card, Job Card, or Government issued letter are required for KYC.
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