If you are a bank account holder and have been facing serious issues with the updating of your KYC then this possibly the best news that you are about to hear!
The Reserve Bank of India has told the banks not to freeze any of the bank accounts till December 31, 2021, even if their KYC has not been updated. Adding on to that, for the SBI account holders, the bank is now allowing them to send their respective KYC documents even through post or registered email to update their account. SBI further updated that partial freezing of the CIF due for KYC to be updated would not be done until May 31. The agenda behind this is that in no case, should the account holders be asked to come in person to the branch for their KYC to be updated.
Since banks are regulated entities of the Reserve bank of India they are mandated to conduct the procedure of updating the KYC for low-risk customers once in 10 years, for medium risk once in 8 years, and for high-risk customers once in 2 years. Because of the current Covid-19 restrictions and the upcoming second wave of the virus, the banks have been told by the RBI that in accounts where the KYC is due for the periodic updating procedure, there should be no restrictions on the operations of those accounts until the 31st of December, 2021.
Moving forward with these initiatives, the RBI has also decided to rationalize some of the components of the existent KYC norms. These include:
(a) Starting with the scope of video KYC which also known as V-CIP (video-based customer identification process) for the new categories of customers that are rising such as the proprietorship firms, beneficial owners of Legal Entities, authorized signatories and for their periodic updating of the KYC;
(b) The conversion of limited KYC accounts has been opened on the basis of Aadhar e-KYC authentication in non-face-to-face mode to fully KYC compliant accounts;
(c) Allowing the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and the submission of the documents electronically( including the documents that are issued through DigiLocker) as their identity proof;
(d) Introducing more customer-friendly options for people, including the use of the digital channels for the purpose of periodic updating procedures of the KYC details of the customers.