Banks have been asked by RBI that in accounts where periodic updation of KYC is due, no restrictions on operations of such account shall be imposed.
As a bank account holder if you have been facing difficulties with KYC updation, there is a piece of good news for you. The RBI has asked banks not to freeze the bank accounts till December 31, 2021, if the KYC has not been updated. Further, in relief for the State Bank of India (SBI) account holders, the bank has allowed account holders to send the KYC documents even by post or through registered email for updation of their account. SBI has informed that partial freezing of CIF due for KYC updation will not be done up to May 31. The idea is that in no case, the account holders be asked to personally visit the branch for KYC updation.
Banks being the regulated entities of the RBI are mandated to conduct KYC updation for low-risk customers once in 10 years, for medium risk once in 8 years, and for high-risk customers once in two years. Keeping in view the current Covid-19 related restrictions, banks have been asked by RBI that in accounts where periodic updation of KYC is due, no restrictions on operations of such account shall be imposed till December 31, 2021
Taking forward the initiatives, RBI has also decided to rationalize certain components of the extant KYC norms.
(a) Extending the scope of video KYC known as V-CIP (video-based customer identification process) for new categories of customers such as proprietorship firms, authorised signatories and beneficial owners of Legal Entities and for periodic updation of KYC;
(b) Conversion of limited KYC accounts opened on the basis of Aadhaar e-KYC authentication in non-face-to-face mode to fully KYC-compliant accounts;
(c) Enabling the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of electronic documents (including identity documents issued through DigiLocker) as identify proof;
(d) Introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of customers.