Hello Readers!!

On Monday that is 10^th May 2021, Reserve Bank Of India, announced amendments in the process of know-your-customer (KYC) to further leverage the video-based customer identification process (V-CIP) and simplified the process of periodic updation of KYC for bank customers.

If you recall, last week RBI was directed for placing no punitive restrictions on operations of customer account(s) that have KYC updation pending, till December 31, 2021. Account-holders are also expected to update their KYC during this period.

In the amid of the second wave of COVID-19 and following lockdown in many states, obviously, this step has been taken by RBI to easing the process of KYC verification for the customers.

Let us have the details about the amendments!!

Amended definition of V-CIP!

RBI stated that now video-based KYC facilities can be used for new account openings and periodic KYC updation of existing bank customers. It is also extended to new proprietorship firms, authorized signatories, and beneficial owners of legal entity customers. The regulated entities have to comply with prescribed standards and procedures as set by the central bank.

How Is video-KYC Carried Out? 

In a video-KYC process, an authorized official of the concerned entity carries out your KYC process through an audio-visual interaction. The process is carried out live that too with a secured network. The official obtains and verifies personal identification information in the video interaction. This is required for due diligence.

Which Platform Is Allowed To Carry video-KYC process?

Well, to ensure the safety of the customer's details, only a bank’s website or its mobile application is allowed to carry out the video-KYC process. The customer cannot leave the bank’s website or mobile application until the video KYC process gets over.

RBI further says that in video-KYC, the consent of the customer should be recorded, in an auditable and alteration-proof manner. The video recordings should contain the live GPS coordinates (geotagging) of you undertaking the video-KYC and should have a date-time stamp. If there is a disruption in the video-KYC recording, the same should be aborted and a fresh session must be initiated. No third-party video calling apps such as Zoom; WhatsApp and Skype would be required for the video-KYC process.

RBI also says that the customers must not share their personal details such as PAN card and Aadhaar number if a link on SMS or email takes them off the bank’s website to complete the video KYC.

When It Is Required To Update KYC?

RBI says banks should opt for a risk-based approach for periodic updation of KYC. For example, to their customers who are high-risk customers for the bank, they can carry out updating of KYC at least once every two years. Similarly, for a customer who is medium risk customer for the bank then updation of KYC must be carried out once every eight years. And, for low-risk customers, updating of KYC is done once every ten years from the date of opening of the account or last KYC updation.

Other Modes Of KYC Updation!

According to the RBI, updation of KYC will be allowed through various modes just to ease out the process for customers, in this pandemic and following lockdown. Other modes of KYC updation include a self-declaration through a registered email ID, a postal letter, net banking, or mobile banking. Updating their KYC through these processes will prohibit customers to visit the bank branch physically for updating KYC.

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