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SPEEDY Railway Book (English)

Details about Know Your Customer (KYC) Norms


The KYC principles were issued by Reserve Bank of India (RBI) on August, 2002 under Section 35A of the Banking Regulation Act, 1949. These related to identification and substantiation of depositors with the objective to prevent banks from being used, intentionally or unintentionally, by
criminal elements for money laundering activities. The guidelines are applicable to all accounts including foreign currency accounts or transactions.

Review of Guidelines:
The guidelines were revised on 29th November, 2004 in line with recommendation made by the Financial Action Task Force (FATF) on Anti Money Laundering (AML) value and on Combating Financing of Terrorism (CFT).

Opening of Account:
KYC produce should be the key principle for identification of a distinct or corporate while opening an account. The customer identification or verification should be on the basis of documents provided by the customer. Introduction is not mandatory as clarified by RBI n its circular dated on 10th December, 2012.

Require Documents for Customer Identity:
  1. PAN Card
  2. Voter I-Card
  3. Driving License
  4. Aadhaar Card
  5. Passport

Fine for Violation of KYC Norms:
RBI has powers to impose fine under Section 47A (1) (b) of the Banking Regulation Act, 1949 for violation of KYC norms and for violation of extant guidelines of relating to IPO financing.

What is e-KYC?
e-KYC refers to electronic KYC. e-KYC is possible only for those who have Aadhaar numbers.

Use of e-KYC:
People can register for e-KYC on the basis of their Aadhaar Numbers. After the e-KYC procedure is done, all information of the customer can electronically transfer to the banks. So in this case, there is no requirement of paper submission of proofs. So e-KYC process is permitted to be treated as an ‘Officially Valid Document’.

Basic Facts about KYC:
  • When someone transfers his bank account from one branch to another branch of the same bank, there is no need for going to KYC procedure again.
  • In case you do not have a bank account, KYC procedure is also required for getting credit/prepaid cards, for remittances of Rs. 50,000 and above, for purchasing mutual fund/insurance products, etc.
  • If a person does not have any of the proofs, then also he can get his account open as a 'small account'.
  • However, if address is changed then the KYC procedure needs to be done again.

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