The Reserve Bank of India today said banks must “insist” on at least one of the officially valid documents such as a PAN card or a voter identity card to open a bank account for employees of companies.
It has found some banks were relying on a certificate/letter from the employer as the only Know Your Customer (KYC) document for the purposes of certification of identity as well as address proof. Such a practice is open to misuse and fraught with risk. Banks should be aware of the competent authority designated to issue such certificate or letter, RBI said a communication to bank chiefs.
In addition to the certificate from the employer, banks should insist on at least one of the officially valid documents as provided in the Prevention of Money Laundering Rules (passport, driving licence, PAN card, voter card, utility bills) for KYC purposes, it said.