5 MinsNov 15, 2022
The Reserve Bank of India has established Know Your Customer (KYC) guidelines. These guidelines mandate banks, financial entities, and intermediaries to authenticate their customers' identities. The purpose of this is to prevent the misuse of financial channels by criminal or terrorist groups for money laundering activities.
The RBI's KYC regulations draw upon the guidelines set by the Financial Action Task Force, an international organization focused on fighting money laundering and terrorism financing. Adhering to these norms is also a compulsory condition under the Prevention of Money Laundering Act.
Importance of meeting KYC requirements:
Banks cannot open any account without collecting the requisite KYC documents. Banks may ask account holders to periodically refresh their KYC documents depending on the activity in their account or as per RBI directives.
Banks can refuse to open an account if a person fails to provide proper KYC documents. They can also discontinue an existing relationship.
The RBI has, however, allowed some relaxations in the KYC norms for people from the vulnerable sections of society.
What KYC documents are required to open a savings bank account?
KYC documents fall under two main categories – proof of identity and proof of address.
As proof of identity, you can provide any of the following documents carrying your photograph:
- Customers can load up to 16 currencies at discounted and locked-in rates, thereby saving them anxiety from forex rate fluctuations.
- PAN card
- Aadhaar card
- Voter ID
- Passport
- Driving license
- Any photo ID card issued by the Central/State government
- NREGA job card
As Proof of Address, you can provide the following documents:
- Customers can load up to 16 currencies at discounted and locked-in rates, thereby saving them anxiety from forex rate fluctuations.
- Voter ID
- Utility bill (electricity, gas, water, telephone)
- Passport
- Driving license
- Bank account statement or passbook of the bank
- Ration card
- Aadhaar card
- A letter stamped/signed/recognised by a gazetted officer or public authority to verify the address details of the applicant
In addition, you will also need to submit a latest passport-sized photograph to fulfil the KYC requirements.
[Also Read: Features to look for when opening a digital savings account]
E-KYC
Traditionally, to meet the requirements of KYC, the customer had to visit the bank branch and submit all the relevant documents.
With the spread of high-speed internet networks and smartphones in the last few years, most banks can also conduct E-KYC or video-KYC. This is done by uploading the KYC documents on the bank’s website. The bank will check with the Aadhar
database (the customer has to sanction this via an OTP – One Time Password) and once the details match and the documents are uploaded, an account can be opened. The video-KYC process is similar, except the customer doesn’t even have to upload a photograph, as the bank’s staff will capture the customer’s image during the verification process.
Both these processes eliminate the need to visit a bank branch.
Axis Bank offers a range of savings accounts tailored to meet its customers' varied needs. Know more about savings account interest rates rates
online.
Disclaimer: The Source, a content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
