KYC details can be updated by Dec 31; select limited KYC a/cs can be made fully compliant: RBI

Those who have to update their KYC details of their bank accounts can breathe a little easy. The Reserve Bank of India (RBI) announced today that banks should not take punitive action against those customer accounts where periodic KYC updating is due/pending. RBI has given time until December 31, 2021 for customers to update their KYC details.

This announcement was part of the RBI governor, Shakthikantha Das’ unscheduled speech on May 5, 2021 to announce measures to tackle the ongoing second wave of the novel coronavirus pandemic.

“Keeping in view the COVID related restrictions in various parts of the country, Regulated Entities are being advised that for the customer accounts where periodic KYC updating is due/pending, no punitive restriction on operations of customer account(s) shall be imposed till December 31, 2021 unless warranted due to any other reason or under instructions of any regulator/enforcement agency/court of law, etc. Account holders are requested to update their KYC during this period,” the RBI governor said.

This a welcome move as due to the ongoing second wave of Covid-19 many bank accountholder were finding it difficult to update their KYC details. Many banks require accountholders to get their KYC details update at bank branch; digital modes are not available. Non-updation would then mean getting their bank accounts frozen. As a relief measure, certain banks announced that customers send submit the documents related KYC updation via email or post. One such bank is the State Bank of India.
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RBI also announced that limited KYC accounts opened on the basis of Aadhaar e-KYC authentication in non-face-to-face mode can be converted to fully KYC-compliant accounts.

Here is a look at the measures announced regarding the rationalisation of compliance to KYC requirements: (a) extending the scope of video KYC known as V-CIP (video-based customer identification process) for new categories of customers such as proprietorship firms, authorised signatories and beneficial owners of Legal Entities and for periodic updation of KYC; (b) conversion of limited KYC accounts opened on the basis of Aadhaar e-KYC authentication in non-face-to-face mode to fully KYC-compliant accounts; (c) enabling the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of electronic documents (including identity documents issued through DigiLocker) as identify proof; (d) introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of customers.