On December 30, 2021, the Reserve Bank of India (RBI) had issued an official notification, mandating the updation of know your customer (KYC) details on or before March 31, 2022 (extended deadline). Accounts that do not comply with such requests for updating their KYC details will be restricted, the notification said.
Only last month, the State Bank of India (SBI) blocked the accounts of several customers owing to non-compliance with KYC norms.
It said in an official Tweet that KYC is an “ongoing exercise conducted at regular intervals”.
This month, however, the public sector bank is again asking its customer to update their KYC details. Although the bank faced backlash from netizens for abruptly blocking accounts, it is more pertinent to ask – why is it important to update KYC details?
On December 30, 2021, the RBI had issued an official notification mandating the updation of KYC details on or before March 31, 2022 (extended deadline).
In July 2022, several SBI customers took to Twitter to complain about their blocked accounts.
One user complained in a Tweet: “My account has been put on STOP because of KYC overdue. No one asked me for KYC, so why was my account put on STOP mode?”
To this, the bank replied, “As per RBI Mandate, customers are supposed get their KYC updated periodically. Hence, customers whose KYC updates are due, are notified through many channels, one of them being SMS.”
This may be old news for most people. However, the reason why SBI wants its customers to update KYC details is the RBI mandate. For that matter, even banks that don’t follow these guidelines will be penalised.
In fact, as recently as August 18, 2022, the RBI imposed a monetary penalty on Obopay Mobile Technology for non-compliance with KYC-related guidelines. This penalty was in tandem with the KYC direction passed in 2016.
If you haven’t updated your KYC details, here are the documents that you would need to do the same:
For individuals, the documents allowed as identity and address proof are:
● Voter's Identity Card
● Driving Licence
● Aadhaar Letter/Card
● NREGA Card
● PAN Card
In the case of a minor who is less than 10 years old, the ID proof of the individual who is handling the account needs to be submitted.
Conversely, if a minor is able to handle the account, the same list of documents as advised for an ‘individual’ can be submitted.
For Non-Resident Indians (NRIs), passport and residence visa copies need to be attested by -
● Foreign Offices
● Notary Public
● Indian Embassy
● Officials of correspondent bank whose signatures are verifiable through an authorised (A/B category Forex handling branch) branch of the bank
With respect to small accounts, the documents needed are -
● Identity card with applicant’s photograph issued by competent authority
● Letter issued by a gazetted officer, with a duly attested photograph