KYC: RBI has some good news for bank customers

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While cautioning the public not to fall victims to fraudulent messages that seek bank details for updating the Know Your Customer (KYC) process, the Reserve Bank of India (RBI) has reiterated that banks cannot freeze customer accounts of those who are yet to do a periodic KYC process. During the pandemic many customers have avoided visiting branches, which has provided fraudsters a chance to use KYC as a reason to engage with customers.

In recent times the central bank has received complaints and reports about customers being cheated in the name of KYC updation. The RBI has also asked the public not to share important information like account information and passwords with unidentified strangers and agencies if they are threatened with an account freeze.

It said that the means used for such fraudulent activities mainly include calls, SMSs, emails urging him or her to share personal details, account login information, PIN, OTP or installing an unathorised app or a malware by clicking a link given below in the communication.

KYC process to be made simpler for NBFCs

Recently, banks have asked customers to fill multiple sheets of all-in-one document just to verify the periodic proof of address and identity. In the wake of this, the RBI has said that it has made the KYC process much simpler.

The Central bank has said that NBFCs and payment system operators can now obtain the Aadhar e-KYC license or sub-KUA license issued by the UIDAI, by submitting their application to the RBI.

Back in May 2019, the Ministry of Finance had come out with a detailed procedure for processing the application under the PML act for use of Aadhar authentication services by entities other than banking companies.