RBI relaxes KYC norms, tells banks not to impose any restriction till December-end

In light of the second wave of coronavirus incidents, the Reserve Bank requested banks and other controlled financial institutions not to place any punitive restrictions on customers who failed to renew their KYC by the end of December.RBI relaxes KYC norms, tells banks not to impose any restriction till December-end

In light of the second wave of coronavirus incidents, the Reserve Bank requested banks and other controlled financial institutions not to place any punitive restrictions on customers who failed to renew their KYC by the end of December. The RBI has also agreed to broaden the reach of video KYC (know-your-customer) or V-CIP (video-based customer recognition process) to include additional types of customers such as sole proprietorships, authorized signatories, and beneficial owners of legal entities.

“In light of the COVID-related restrictions in various parts of the country, Controlled Entities are being advised that no punitive restrictions on customer account(s) operations will be enforced until December 31, 2021,” RBI Governor Shaktikanta Das said while announcing measures to combat the COVID pandemic.

Banks and other controlled agencies can no longer place punitive limitations on consumers unless otherwise required by law or under the direction of a regulatory body or a judge. Das said in his speech that the RBI is in “battle readiness” to ensure that financial conditions remain favorable and markets operate efficiently.

“We will work closely with the government to alleviate the severe hardships that our people are facing at this time of crisis. We remain open to going against the grain and devising new responses as the situation requires.

We must also keep our eyes on the future, which looks promising even now, with India poised to become one of the world’s fastest-growing economies,” he added.

The governor, who unveiled a slew of interventions in the aftermath of the COVID-19 pandemic’s second surge, also stated that the central bank will remain vigilant throughout the year, taking small and large steps to address the changing situation.

 

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