If you are planning to open a New Savings Account or any other type of Bank Account or if you are already an account holder and want to do a High Value Transaction, you should be aware of the term KYC Norms which stands for Know Your Customer. This is a standard norm introduced by RBI (Reserve Bank Of India) to monitor any malicious financial activities and wrongdoings that may be committed by fraudsters using your accounts’ credentials. According to KYC Norms, it has been mandated by RBI that for Opening a Bank Account or doing a High Value Transaction, you have to submit following documents
1. Recent Passport Size Photograph
2. Any Form of Identity Proof : Followings are acceptable as valid Identity Proofs
- PAN Card
- Voter’s Identity Card
- Driving Licence
- Any form of Identity Card (College ID Card, Employee Identify Card etc)
- Letter from a recognized public authority or public servant verifying the identity of the customer
3. Proof of Address : Followings are acceptable as valid Address Proofs
- Telephone Bill (Some banks insist on any government operators’ like BSNL or MTNL telephone bill and don’t accept private operators bills, so be prepared, if your bank also does the same)
- Bank Account Statement
- Letter from a Recognized Public Authority or Public Servant verifying the residence of the customer
- Electricity Bill
- Ration Card
- Letter from Employer
Why KYC Norms ??
It is mainly to authenticate the customer individually and their financial dealings and to prevent you from fraudsters, who use your name, address, signature etc for illegal business activities and financial wrongdoings. It also tracks and puts a check on High Value Cash Transaction followed by any financial scam and criminal activity and avoids money laundering.
When does KYC Norms Apply ?? In following cases, Banks may ask its customers for KYC documents, but this list by no means is exhaustive and Banks can definitely call their customer anytime !!
- Opening a New Bank Account
- Opening a Subsequent Account, where documents submitted earlier while opening the initial account are not as per current KYC standards.
- Opening a Locker Facility where these documents adhering to KYC Norms are not available with the bank.
- When there are changes to Signatories, Mandate Holders, Beneficial Owners etc.
- When the bank feels it necessary to obtain additional information from existing customers based on their conduct with respect to existing account
- Even for non-account holders, when approaching the bank for high value one-off transactions, say depositing a sum of Rs 50,000 into an account.
Who is the Point Of Contact in the Bank for KYC Norms ?
So next time, you hear any communication from your Bank or Relationship Manager, you know what he is talking about 🙂 More information regarding KYC Norms can be found at RBI (Reserve Bank Of India) Websites.
Guidelines on “Know Your Customer” Norms and “Cash transactions” http://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=117
Know Your Customer (KYC) Guidelines – Anti Money Laundering Standards http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=2039&Mode=0
Know Your Customer (KYC) norms/Anti Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT)/ Obligations of Banks under Prevention of Money Laundering Act, (PMLA), 2002 http://rbidocs.rbi.org.in/rdocs/notification/PDFs/MCKYCC010709.pdf