Fri. Mar 29th, 2024

The Reserve Bank of India has updated its master direction on Know Your Customer (KYC)- norms, which makes Aadhaar key for the due diligence process at banks and financial institutions.

However, Reserve Bank Of India said in a circular late last night that this will be subject to the final decision of the Supreme Court on making of Aadhaar mandatory.

Till date, an Officially Valid Document (OVD) for address proof together with Permanent Account Number (PAN) issued by the Income Tax department and a recent passport size photograph were the key KYC documents.

According to an updated circular, the RBI stated that the norms have been revised because the government had amended laws on prevention of money laundering through a gazette notification in June 2017. However, it’s not clear when the new guidelines would come into force.

As per the norms the customers already having account-based relationships with a bank must hand over the Aadhaar number prior the date notified by the government. If they fail to do so, the account shall cease to be operational.

Reserve Bank Of India states that of for residents of Jammu and Kashmir, Assam or Meghalaya, who do not submit Aadhaar or proof of application of enrollment for Aadhaar, the bank may obtain a “certified copy of an OVD containing details of identity and address and one recent photograph.

RBI stated that the KYC norms have been updated following the government’s decision to update the ‘Prevention of Money Laundering (PML) rules in June 2017.

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