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Simplified Bank KYC makes aam aadmi's life simple

Since the introduction of KYC (Know Your Customer) norms, opening of bank accounts had become a very tedious affair. Of course, the underlying intention — to curb black money or use of banking channels for criminal activities — was well appreciated.

But in the process, the small and honest customers, had to unintentionally suffer many inconveniences. Appreciating this, RBI has from time to time introduced many relaxations in the KYC norms. And to bring these simplifications to the notice of general public, it has now launched a public awareness campaign.


Listed below are some of the key initiatives in this regard.

> Henceforth even one document would be sufficient for both proof of identity and proof of address, if it contains both the details. You, no longer, need to furnish separate proofs for identity and address.

> There is no need to again undergo the KYC documentation process if the account is being transferred from one branch to another, belonging to the same bank.

> Normally people on the move from city to city experience difficulty in obtaining the proof of current address. They can, now onwards, submit only one address proof (either permanent or current, whichever is conveniently possible). If they submit documentary proof for their permanent address, then only a simple declaration of the current address is sufficient.

> In fact, those not having 'officially valid documents' too can open the so-called 'Small Accounts'. These require only a self-attested photograph and putting the signature / thumb print in the presence of a bank official. But they come with certain conditions (see later). These accounts are quite useful for our domestic helps, drivers and such other support staff.

> For low risk category customers, the period for updating of KYC has been extended from 5 years to 10 years (and 5 to 8 years for medium risk customers). This comes as a big relief.

> Low risk category customers, not having any of the ‘officially valid documents’, can open a bank account by submitting either a letter from a gazetted officer or Identity card issued by Govt. department, regulatory authorities, PSUs, scheduled commercial banks and public financial institutions.

> In genuine cases, the low risk category customers get a relaxation of up to 6 months, from the date of opening the account, to furnish their KYC documents.

RBI has been proactive in understanding the difficulties of a vast majority of genuine customers and hence all these steps are indeed praiseworthy.

Note: Limitations in a 'Small Account'
- Total credits in a year not to exceed Rs.1 lakh
- Aggregate withdrawals during a month not to exceed Rs.10,000
- Balance at any given time not to exceed Rs.50,000
- Valid for 12 months
- Can be extended for another 12 months provided the customer has applied for an officially valid document.

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