RBI Simplifies KYC Regulations For Banks; Utility Bills, Pension Receipt Now A Valid Address Proof


KYC Know Your Customer

As per a 2013 survey, it was found that less than 50% of Indians have a bank account; although PM Modi’s Jan Dhan Yojana has resulted in inclusion of more than 2 crore rural Indians into the banking system, there is still a lot to be achieved.

Amidst the urban landscape, one of the biggest hindrances which migrant workers face while opening a new account is the mandatory requirement of a valid address proof – both permanent and temporary. Often it has been observed that migrant workers don’t have a stable current address as they usually stay at different places during their temporary tenure. This forbids them from having a bank account and taking advantages of the Govt. schemes, and they miss out.

But not anymore…

Reserve Bank of India (RBI) has issued fresh guidelines for norms pertaining to opening of new bank accounts, which has simplified the process for ‘low risk customers’. Henceforth, only one proof-of-address is sufficient to open a new bank account. Infact, any utility bill, which is not more than 2 months old can be used for purpose.

Consequently, RBI has instructed all banks (National and Private), along with financial institutions, NBFCs to update their Know Your Customer (KYC) regulations with immediate effect, which will allow this new norm to be applicable.

RBI notification said, “Henceforth, customers may submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. In case the address mentioned as per proof of address undergoes a change, fresh proof of address may be submitted to the branch within a period of six months.”

RBI has introduced these changes by amending the “Prevention of Money Laundering (Maintenance of Records) Rules, 2005”, wherein they have also added several new provisions of providing address proof for a new account, which was earlier limited to voters ID card, passport and rent agreement.

Additional Documents Which Are Now Valid Proof

Besides utility bill from any service provider(which is not more than 2 months old), RBI has included these additional documents as valid proof of address:

  • Pension orders or Family pension payment orders, issued by Government undertakings or public sector, which includes address of the payee.
  • Property or Municipal Tax receipt
  • Any other bank account statement or Post Office account statement
  • Letter of allotment of accommodation, issued by Govt. enterprise or non-Govt. enterprise. Leave and license documents issued will also work fine.
  • Letters issued by any Foreign Embassy or Mission in India; Documents issued by Indian Govt. to foreign delegates or employees

The notification clearly states that these above mentioned documents are now Officially Valid Documents (OVD) for opening a new bank account.

You can view the official RBI notification here.

[Image: Shutterstock.com]

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