MUMBAI: The Reserve Bank of India (RBI) has updated the know your customer (KYC) norms for banks and financial entities it regulates for the first time since February 2016 reiterating that no account is opened in an anonymous or fictitious name.
"Regulated entities (REs) have to ensure that no account is opened where the RE is unable to apply appropriate customer due diligence (CDD) measures, either due to non-cooperation of the customer or non-reliability of the documents/information furnished by the customer,” said RBI.
Banks and NBFCs have also been told not to allow any transaction or account relationship without following the CDD procedure and the mandatory information to be sought for KYC purpose while opening an account and during the periodic updation.
However banks have to be careful that additional information is obtained with the explicit consent of the customer. Also, “if an existing KYC compliant customer of a RE desires to open another account with the same RE, there shall be no need for a fresh CDD exercise.”
CDD procedure is also to be followed for all the account holders while opening a joint account.
“Circumstances in which, a customer is permitted to act on behalf of another person/entity, is clearly spelt out. Suitable system is put in place to ensure that the identity of the customer,” RBI said.