 "Now, you can open bank account with permanent address as proof")
In major relief to migrant workers who faces roadblocks while opening a bank account due to lack of proof of local address, the Reserve Bank of India (RBI) today simplified the know your customer norms (KYC) for opening accounts.
In a communication to banks, the regulator said only one address proof – either permanent or current – will be required to open a bank account. In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address has to be submitted to the branch within six months.
“RBI has been receiving representations/references from various quarters’ especially migrant workers, transferred employees, etc. regarding problems faced in submitting a proof of current/permanent address while opening a bank account,” a statement from the regulator said explaining the rationale for the move.
“No proof is required to be submitted for such address for correspondence/local address,” RBI clarified.
R K Bansal, Executive Director of IDBI Bank said that though this is a step ahead in financial inclusion, it may pose some operational challenges initially for the banks. “Banks will have to be careful in verifying the permanent address. It will slightly increase the requirement of verification.”
The banking regulator has suggested that banks verify the local address through ‘positive confirmation’ such as acknowledgment of receipt of letter, cheque books, ATM cards, telephonic conversation; visits; etc.
“In the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within two weeks of such a change,” RBI said. Banks have been asked by the regulator to revise its own KYC norms accordingly.
Murali Natarajan, MD & CEO, DCB said that the banks will have to carefully look at the operational part. “The process of how a bank will verify the address will need to be deliberated and finalized as the genuine of the address given will need to be verified carefully.”
The move is a departure from the earlier RBI mandate which said if the address indicated on the document submitted for identity proof differs from the current address mentioned in the account opening form, a separate proof of address should be obtained.
In a communication to banks, the regulator said only one address proof – either permanent or current – will be required to open a bank account. In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address has to be submitted to the branch within six months.
“RBI has been receiving representations/references from various quarters’ especially migrant workers, transferred employees, etc. regarding problems faced in submitting a proof of current/permanent address while opening a bank account,” a statement from the regulator said explaining the rationale for the move.
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The central bank said that if address proof furnished by the customer is not the local address or address where the customer is currently residing, the bank will a declaration of the local address on which all correspondence will be made by the bank with the customer.
“No proof is required to be submitted for such address for correspondence/local address,” RBI clarified.
R K Bansal, Executive Director of IDBI Bank said that though this is a step ahead in financial inclusion, it may pose some operational challenges initially for the banks. “Banks will have to be careful in verifying the permanent address. It will slightly increase the requirement of verification.”
The banking regulator has suggested that banks verify the local address through ‘positive confirmation’ such as acknowledgment of receipt of letter, cheque books, ATM cards, telephonic conversation; visits; etc.
“In the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within two weeks of such a change,” RBI said. Banks have been asked by the regulator to revise its own KYC norms accordingly.
Murali Natarajan, MD & CEO, DCB said that the banks will have to carefully look at the operational part. “The process of how a bank will verify the address will need to be deliberated and finalized as the genuine of the address given will need to be verified carefully.”
The move is a departure from the earlier RBI mandate which said if the address indicated on the document submitted for identity proof differs from the current address mentioned in the account opening form, a separate proof of address should be obtained.