India is planning to enforce uniform Know Your Customer (KYC) norms across the financial sector which will be graded based on the risk profile of a customer or entity, sources in the know of the matter told CNBC-TV18.
The government is setting its sights on implementing this risk-based, uniform KYC norms for the financial sector by May-June this year, according to official sources.
A discussion on the timeline for harmonised
KYC was done in a recent Financial Stability and Development Council (FSDC) meeting. A panel formed by the Reserve Bank of India (RBI) had earlier recommended the adoption of risk-based, graded KYC norms in 2023, sources said.
The proposed
KYC norms are expected to follow a graded approach, ranging from 'Basic' to 'Very Strong', sources told CNBC-TV18.
Inter-departmental government panels and regulatory bodies are collaborating to align with the
RBI's recommendations, ensuring a smooth transition to the new KYC norms.
It is noteworthy that the groundwork for uniform KYC norms was laid as early as the 2015 Budget, which proposed the standardisation of KYC processes and the interoperability of KYC records across the entire financial sector.
The recent 2024 Budget reiterated this commitment, emphasising the adoption of a simplified, 'risk-based' approach over the traditional 'one size fits all' model for the KYC process.
(Edited by : Amrita)
First Published: Mar 1, 2024 9:29 AM IST