NEW DELHI : The Reserve Bank of India (RBI) has relaxed the Know Your Customer (KYC) norms for existing clients of Non-Banking Finance Companies (NBFCs) based on risk their profile.
“Full KYC exercise will be required to be done at least every 10 years for low risk and at least every eight years for medium risk individuals and entities taking in to account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained,” according to new RBI rules.
Earlier, the profile of the low risk had to be reviewed by NBFCs every five years.
The issue was examined in the light of practical difficulties and constraints in obtaining and submitting fresh KYC documents at frequent intervals.
Physical presence of the clients may not be insisted upon at the time of such periodic updations. As per new norms, full KYC exercise will be required to be done at least every two years for high risk individuals and entities.
However, fresh photographs will be required to be obtained from minor customer on becoming major. The NBFCs 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.
If an existing KYC compliant customer of NBFC desires to open another account in the same NBFC, there should be no need for submission of fresh proof of identity and/or proof of address for the purpose.
(AGENCIES)
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