Reserve Bank of India issues KYC guidelines for banks; here's what customers need to know

RBI has asked banks and non-banking financial companies to adopt a risk-based approach regarding KYC (Know Your Customer) updates from time to time.

Under the new RBI guidelines, banks, NBFCs and other entities under the purview of RBI will have to conduct due diligence of their customers as per the prescribed procedures. Photo: PTI/Representational

RBI KYC Guidelines: Reserve Bank of India has issued new guidelines for Know Your Customer (KYC) to strengthen the customer verification system. Under this, banks and non-banking financial companies (NBFCs) have been asked to adopt a risk-based approach regarding KYC updates from time to time.

RBI made changes in master direction

After review, the Central Bank has amended the 'Master' guidelines regarding KYC. Under this, banks, NBFCs and other entities under the purview of RBI will have to conduct due diligence of their customers as per the prescribed procedures.

Why did this change happen?

The RBI amendment came after the government's new instructions related to Anti-Money Laundering Rules, Unlawful Activities (Prevention) Act (UAPA) and Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act.