QUESTION 3. What are the
documents to be given as
‘proof of identity’ and ‘proof of address’?
Response: The Government of India has notified six documents
as
‘Officially Valid Documents’ (OVDs) for the purpose of producing
proof
of identity.
These six documents are Passport, Driving Licence,
Voters’
Identity Card, PAN Card, Aadhaar Card issued
by UIDAI and NREGA Job Card.
You need to submit any one of
these documents as proof of identity. If
these documents also
contain your address details, then it would also be
accepted as ‘
proof of address’.
If the document submitted by you for proof
of identity does
not contain address details, then you will have to submit
another officially valid document which contains address details.
QUESTION 4. If I do not have any
of the documents
listed above to show my ‘proof of identity’,
can I still
open a bank account?
Response: Yes. You can still open a bank account known as
‘Small Account’ by submitting your recent photograph and
putting your
signature or thumb impression in the presence of the bank official.
QUESTION 5. Is there any
difference between
such ‘small accounts’ and other accounts
Response: Yes. The ‘Small Accounts’ have certain limitations
such as:
·
balance
in such accounts at any point of time should not exceed Rs.50,000
·
total
credits in one year should not exceed Rs.1,00,000
·
total
withdrawal and transfers in a month should not exceed Rs.10,000
·
Foreign
remittances cannot be credited to such accounts.
Such accounts remain operational
initially for a period of
twelve months and thereafter, for a further
period of
twelve months if the holder of such an account provides
evidence
to the bank of having applied for any
of the officially valid documents
within twelve months
of the opening of such account.
QUESTION 6. Would it be
possible,
if I do not have any of the officially valid documents,
to have a
bank account, which is not subjected to
any limitations as in the case of
‘small accounts’?
Response: A normal account can be opened by submitting a
copy of any one of the following documents as Proof of Identity (PoI):
(i) Identity card with person’s
photograph issued by Central/
State Government Departments,
Statutory/Regulatory Authorities,
Public Sector
Undertakings, Scheduled
Commercial Banks, and Public
Financial Institutions;
or
(ii) letter issued by a gazetted
officer, with a duly attested
photograph of the person.
For Proof of Address (PoA), you
may submit the following
documents:
i.
Utility
bill, which is not more than two months old,
of any service provider
(electricity, telephone, post-paid
mobile phone, piped gas, water bill);
ii.
Property
or Municipal Tax receipt;
iii.
Bank
account or Post Office savings bank account
statement;
iv.
Pension
or family Pension Payment Orders (PPOs)
issued to retired employees by
Government Departments or
Public Sector Undertakings, if they contain the
address;
v.
Letter
of allotment of accommodation from employer issued
by State or Central
Government departments, statutory
or regulatory bodies, public sector
undertakings,
scheduled commercial banks, financial institutions
and listed
companies. Similarly, leave and license
agreements with such employers
allotting official
accommodation; and
vi.
Documents
issued by Government departments
of foreign jurisdictions or letter issued
by Foreign
Embassy or Mission in India.
This, however, is not a general
rule and it is left to the
judgement of the banks to decide whether this
simplified
procedure can be adopted in respect of any customer.
QUESTION 7. If my name has been
changed
and I do not have any OVD in the new name,
how can I open an
account?
Response: A copy of the marriage certificate issued
by the
State Government or Gazette notification
indicating change in name together
with a certified
copy of the ‘Officially Valid Documents’ in the prior
name
of the person is to be furnished for opening of
account in cases of persons
who change their names on
account of marriage or otherwise.
QUESTION 8. Are banks required
to categorise
their customers based on risk assessment?
Response: Yes, banks are required to classify their
customers into ‘low’, ‘medium’ and ‘high’ risk
categories depending on
their AML risk assessment.
QUESTION 9. Do banks inform
customers
about this risk categorisation?
Response: No
QUESTION 10. If I refuse to
provide requested
documents for KYC to my bank for opening
an account, what
may be the result?
Response: If you do not provide the required documents
for
KYC, the bank will not be able to open your account.
QUESTION 11. Can I open a bank
account with
only an Aadhaar card?
Response: Yes, Aadhaar card is accepted as a proof of
both
identity and address.
QUESTION 12. Is it compulsory to
furnish
Aadhaar Card for opening an account?
Response: No. you may furnish Aadhaar card or
any of the
other five OVDs for opening an account.
QUESTION 13. What is e-KYC? How
does e-KYC work?
Response: e-KYC refers to electronic KYC.
e-KYC is possible only for those
who have Aadhaar numbers.
While using e-KYC service, you have to authorise
the
Unique Identification Authority of India (UIDAI),
by explicit consent,
to release your identity / address
through biometric authentication to the
bank branches
/business correspondent (BC). The UIDAI then
transfers your
data comprising your name, age, gender,
and photograph electronically to
the bank.
Information thus provided through e-KYC process is
permitted to
be treated as an ‘Officially Valid Document’
under PML Rules and is a valid
process for KYC verification.
QUESTION 14. Is introduction
necessary
while opening a bank account?
Response: No, introduction is not required.
QUESTION 15. If I am staying in
Chennai but if
my proof of address shows my address of
New Delhi, can I
still open an account in Chennai?
Response: Yes. You can open a bank account in
Chennai even
if the address in the “Officially Valid
Document” is that of New Delhi and
you do not have
a proof of address for your Chennai address.
In such case,
you can submit the officially valid
document having your New Delhi address,
together with a declaration about your
Chennai address for communication
purposes.
QUESTION 16. Can I transfer my
existing
bank account from one place to another?
Do I need to undergo full
KYC again?
Response: It is possible to transfer an account
from one
branch to another branch of the same bank.
There is no need to undergo KYC
exercise again for
such transfer. However, if there is a change of address,
then you will have to submit a declaration about the
current address. If
the address appearing in the
‘Officially Valid Documents’ (OVDs) submitted
for proof of address is no longer your valid address
(i.e. neither your permanent
address nor
your current address), you need to get an Officially
Valid
Document for Proof of Address containing
the current or the permanent
address and furnish
the same within six months. In case of opening
an
account in another bank, however, you will have to undergo KYC exercise
afresh.
QUESTION 17. Do I have to
furnish KYC
documents for each account I open in a
bank even though I have
furnished the
documents of proof of identity and address?
Response: No, if you have opened a KYC
compliant account
with a bank, other than a
‘small account’, then for opening another
account
with the same bank, furnishing of documents is not necessary.
QUESTION 18. For which banking
transactions
do I need to Question uote my PAN number?
Response: PAN number needs to be quoted for
transactions
such as account opening, transactions
above Rs.50,000 (whether in cash or
non-cash), etc.
A full list of transactions where PAN number needs
to be quoted
can be accessed from website of Income
Tax Department at the following URL:
QUESTION 19. Whether KYC is
applicable for
Credit/Debit cards?
Response: Yes. KYC exercise is necessary for Credit/
Smart
Cards and also in respect of add-on/ supplementary
cards. Since debit cards
are issued only to account holders
and accounts are opened only after the
KYC procedure is
completed, there is no need for separate KYC
for issuing
debit card.
QUESTION 20. I do not have a
bank account.
But I need to make a remittance.
Is KYC applicable to me?
Response: Yes. KYC exercise needs to be done
for all those
who want to make domestic remittances
of Rs. 50,000 and above and all
foreign remittances.
QUESTION 21. Can I purchase a
Demand Draft/
Payment Order/Travellers Cheque against cash?
Response: Yes, Demand Draft/Payment Order/Travellers
Cheques
for below Rs.50,000/- can be purchased against
cash and such instruments
for Rs. 50000/- and above can
be issued only by way of debiting the
customer's account
or against cheques.
QUESTION 22. Do I need to submit
KYC
documents to the bank while purchasing
third party products (like
insurance or
mutual fund products) from banks?
Response: Yes, all customers who do not have
accounts with
the bank (known as walk-in customers)
have to produce proof of identity and
address
while purchasing third party products from banks
if the transaction
is for Rs.50,000 and above.
KYC exercise will not be necessary for bank’s
own customers for purchasing third party products.
However, instructions to
make payment by debit to
customers’ accounts or against cheques for
remittance
of funds/issue of travellers’ cheques, sale of
gold/silver/
platinum and the requirement of quoting PAN number
for
transactions of Rs.50,000 and above will be
applicable to purchase of third
party products from
bank by its customers as also to walk-in customers.
QUESTION 23. My KYC was
completed
when I opened the account. Why does my
bank insist on doing KYC
again?
Response: Banks are required to periodically
update KYC
records. This is a part of their ongoing
due diligence on bank accounts.
The periodicity of
such updation varies from account to account depending
on its risk categorisation by the bank. Periodic updation
of records also
helps prevent frauds in customer accounts.
QUESTION 24. What are the rules
regarding periodic updation of KYC?
Response: Different periodicities have been
prescribed for
updation of KYC records depending on
the risk perception of the bank. KYC
is required to be done
at least once in two years for high risk customers,
once in eight years for medium risk customers and
once in ten years for low
risk customers.
This exercise would involve all formalities for KYC
normally taken at the time of opening the account.
While periodic updation of KYC
has to be carried out in
respect of customer categorised as ‘low risk’
also,
if there is no change in status with respect to the
identity (change
in name, etc.) and/or address of
such customers the banks may ask such
customers
to submit only a self-certification about
‘no-change in status’
at the time of periodic updation.
Banks may not ask such customers to
submit copies of
‘Officially Valid Documents’ for periodic updation.
In case of change of address of
such ‘low risk’
customers, they could merely forward a certified copy
of
the document (proof of address) by mail/post, etc.
Physical presence of
such low risk customer is not
required at the time of periodic updation.
Customers who are minors have to
submit fresh
photograph on becoming major.
QUESTION 25. What if I do not
provide the
KYC documents at the time of periodic updation?
Response: If you do not provide your KYC
documents at the
time of periodic updation,
bank has the option to close your account.
Before closing the account, the bank may,
however, impose ‘partial
freezing’ (i.e. initially
allowing all credits and disallowing all debits
while giving an option to you to close the account
and take your money
back). Later, even credits
also would not be allowed. The ‘partial
freezing’
however, would be exercised by the bank after giving you due
notice.
QUESTION 26. How is partial
freezing imposed?
Response: Partial freezing is imposed in
the following ways:
·
Banks
have to give due notice of
three months initially to the customers
before
exercising the option of ‘partial freezing’.
·
After
that a reminder for further period
of three months will be issued.
·
Thereafter,
banks shall impose ‘partial freezing’
by allowing all credits and
disallowing all debits
with the freedom to close the accounts.
·
If the
accounts are still KYC non-compliant after
six months of imposing initial
‘partial freezing’ banks
shall disallow all debits and credits from/to the
accounts,
classifying them inoperative.
Meanwhile, the account holders
can revive accounts
by submitting the KYC documents.
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