Partially freeze KYC non-compliant accounts, RBI tells banks
Updated: Oct 22, 2014 01:01:18pm
Mumbai, Oct 22 (KNN) The Reserve Bank of India has told banks to partially freeze accounts of customers who have not complied with the KYC requirements, despite repeated reminders and even close them if required.
“As regards non-compliance of KYC requirements by the customers despite repeated reminders by banks, it has been decided that banks should impose ‘partial freezing’ on such KYC non-compliant in a phased manner,” RBI said in a notification yesterday.
However, “while imposing ‘partial freezing’, banks are advised to ensure that the option of ‘partial freezing’ is exercised after giving due notice of three months initially to the customers to comply with KYC requirement and followed by a reminder for further period of three months. Thereafter, banks may impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts,” the apex bank said.
If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’ banks may disallow all debits and credits from/to the accounts, rendering them inoperative. Further, it would always be open to the bank to close the account of such customers.
Meanwhile, the account holders can revive accounts by submitting the KYC documents as per instructions in force.
RBI instructed banks to revise their KYC policy in the light of these instructions and ensure strict adherence to the same.
The central bank has also indicated that banks need not seek fresh proofs of identity and address at the time of periodic updation, from those customers who are categorised as ‘low risk’, in case of no change in status with respect to their identities and addresses.
“A self-certification by the customer to that effect should suffice in such cases. In case of change of address of such ‘low risk’ customers, they could merely forward a certified copy of the document (proof of address) by mail/post, etc. Banks may not insist on physical presence of such low risk customer at the time of periodic updation,” it said.
Further, if an existing KYC compliant customer of a bank desires to open another account in the same bank, there should be no need for submission of fresh proof of identity and/or proof of address for the purpose. (KNN/ES)
“As regards non-compliance of KYC requirements by the customers despite repeated reminders by banks, it has been decided that banks should impose ‘partial freezing’ on such KYC non-compliant in a phased manner,” RBI said in a notification yesterday.
However, “while imposing ‘partial freezing’, banks are advised to ensure that the option of ‘partial freezing’ is exercised after giving due notice of three months initially to the customers to comply with KYC requirement and followed by a reminder for further period of three months. Thereafter, banks may impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts,” the apex bank said.
If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’ banks may disallow all debits and credits from/to the accounts, rendering them inoperative. Further, it would always be open to the bank to close the account of such customers.
Meanwhile, the account holders can revive accounts by submitting the KYC documents as per instructions in force.
RBI instructed banks to revise their KYC policy in the light of these instructions and ensure strict adherence to the same.
The central bank has also indicated that banks need not seek fresh proofs of identity and address at the time of periodic updation, from those customers who are categorised as ‘low risk’, in case of no change in status with respect to their identities and addresses.
“A self-certification by the customer to that effect should suffice in such cases. In case of change of address of such ‘low risk’ customers, they could merely forward a certified copy of the document (proof of address) by mail/post, etc. Banks may not insist on physical presence of such low risk customer at the time of periodic updation,” it said.
Further, if an existing KYC compliant customer of a bank desires to open another account in the same bank, there should be no need for submission of fresh proof of identity and/or proof of address for the purpose. (KNN/ES)
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