RBI mandates folowing KYC norms for banks

The Reserve Bank of India has issued new norms to banks in a bid to keep check on money laundering. RBI has instructed banks apart from getting certification by employer, they should ask for valid documents at the time of opening accounts of salaried employees.

A circular issued by RBI stated to reduce the risk of fraud banks have to rely on certification only from corporate and other entities of repute and so they must have proper information of the competent authority designated by the concerned employer to issue such certificate or letter.

Besides the certification from employer, banks must mandatorily ask for at least one of the officially valid documents as provided in the Prevention of Money Laundering Rules namely passport, driving license, PAN Card, Voter’s Identity card, etc, it said.

The circular stated banks can accept utility bills as valid document for know your customers (KYC) purposes for opening bank account of salaried employees of corporates and other entities.

It said, in case of any violation or non-compliance of the norms by any bank will attract penalties under Banking Regulation Act.

RBI said, it has been noticed that some banks for opening bank account of salaried employees of corporates, rely on certificate or letter issued by the employer as the only KYC document for the purposes of certification of identity as well as address proof.