Reserve Bank Of India (RBI) Governor Shaktikanta Das Relaxes KYC Norms, Orders Banks To Not Impose Restrictions This Year

Amid the second wave of COVID-19 in the country and its induced restrictions in various states, the Reserve Bank of India (RBI) on Wednesday, May 5, directed banks and other regulated financial entities to not impose any punitive action against customers for failure to update KYC (know-your-customer) till the end of the year. RBI Governor Shaktikanta Das, in an unscheduled speech today, announced several relief measures to tackle the ongoing coronavirus crisis across the nation. (Also Read: RBI Says Loan Moratorium For Small Borrowers – See Who Qualifies )

As part of the announcement, the central bank decided to extend the scope of the video KYC or V-CIP (video-based customer identification process) for the new categories of customers such as proprietorship firms, authorised signatories, as well as beneficial owners of legal entities.

”Keeping in view the current COVID-19 related restrictions in various parts of the country, regulated entities are advised that in respect of the customer accounts where periodic updation of KYC is due and pending as on date, no restrictions on operations of such account shall be imposed till December 31, 2021, for this reason alone, unless warranted under instructions of any regulator/ enforcement agency/court of law, etc,” said the RBI in its circular dated May 5, 2021. 

This means that customers for whom the periodic updation of KYC norms is due or is pending will be able to access their accounts without any restrictions from their respective banks till the end of this year. 

In his address, the RBI Governor stressed that the central bank stands in ‘battle readiness’ and will continue to remain proactive throughout the year, to deal with the evolving situation in the country.