The Reserve Bank of India (RBI) recently said that the periodic updation of Know Your Customer (KYC) is important. The same can be done in person at a bank branch or online using a video-based Customer Identification Process (V-CIP) except in cases where there is a change of address.
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This clarification from RBI came after several users complained that banks are telling them to do in-branch completion of their fresh KYC process despite the central bank allowing digital re-KYC.
What is re-KYC?
Based on RBI guidelines, lenders ask for re-KYC at specific intervals to keep the bank's records updated. Customers can update the records through re-KYC if personal or contact information has changed.
As per RBI’s KYC norm guidelines, banks need to update the customer identification documents of their account holders periodically. In addition to the KYC carried out when opening an account, customers may be required to undergo re-KYC and submit the requisite documents.
What is the period for re-KYC?
As per banking experts, the time intervals for periodic updation of KYC are 2, 8 and 10 years for existing high, medium and low-risk customers, respectively.
How can re-KYC be done?
As per RBI's rule, if there is no change in any KYC information, customers can do a re-KYC through self-declaration. The RBI has instructed banks to provide facilities for such self-declaration through various non-face-to-face channels such as registered email id, registered mobile number, ATMs, digital channels (such as online banking / internet banking, mobile application), letter, etc., without need for a visit to bank branch.
Further, if there is only a change in address, customers can furnish revised / updated address through any of these channels after which, the bank would undertake verification of the declared address within two months, RBI said.
In which cases are fresh KYC required?
As the banks are mandated to keep their records up-to-date and relevant by undertaking periodic reviews and updations, a fresh KYC process/documentation may have to be undertaken in certain cases including where the KYC documents available in bank records do not conform to present the list of the Officially Valid Documents (viz., passport, driving license, proof of possession of Aadhaar number, the Voter's Identity Card, job card issued by NREGA and letter issued by the National Population Register) or where the validity of the KYC document submitted earlier may have expired. In such cases, the banks are required to provide an acknowledgement of the receipt of the KYC documents / self-declaration submitted by the customer.
What happens if re-KYC is not done?
As per RBI rules, the bank has full right, even to close the account if required KYC documents were not submitted by the customer for periodical updating.
However, it's important to understand that there is a central KYC registry, and if the identifier number can be shared with other banks, then re-KYC need not be done.
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