KYC Guidelines by RBI - Policy, Updation & Documents

RBI KYC guidelines are a set of regulations mandated by the Reserve Bank of India to verify the identity and address of customers engaging in financial transactions. These guidelines are part of the Customer Due Diligence (CDD) norms, aimed at preventing identity fraud, money laundering, and financing of unlawful activities.

Key Objectives of RBI KYC Guidelines:

1. Fraud Prevention: Establishing the identity of customers helps prevent fraudulent activities.
2. Regulatory Compliance: Ensures adherence to laws like the Prevention of Money Laundering Act (PMLA).
3. Smooth Transactions: Facilitates secure and hassle-free banking experiences.

The RBI KYC policy is applicable to all entities regulated by the RBI, including banks, non-banking financial companies (NBFCs), and payment service providers. By adhering to these guidelines, financial institutions can maintain trust and integrity within the system.

RBI mandates various types of KYC verification methods to cater to diverse customer needs and ensure accessibility. Here are the primary types of KYC verification:

1. e-KYC:
   • Electronic KYC involves online verification using Aadhaar credentials.
   • It is quick, paperless, and widely used for digital financial services.
2. Physical KYC:
   • Customers submit physical documents for in-person verification at the bank or NBFC branch.
   • This method is suitable for individuals who prefer traditional processes.
3. Video KYC:
   • A secure video-based process where customers verify their identity remotely.
   • It is convenient and compliant with RBI norms for digital onboarding.

These methods ensure inclusivity and compliance, making it easier for customers to complete their KYC.

The RBI has defined specific timelines for periodic KYC updates based on customer risk categorisation. Here is a tabular representation of the updation rules:

Additional Notes:

• Customer Type: Individual and corporate customers may have varying requirements.
• Triggers for Updates: Changes in customer information (e.g., address or contact details) may necessitate KYC updates.

Adhering to these timelines ensures compliance and uninterrupted access to financial services.

Documents Required for KYC as per RBI

RBI mandates specific documents for KYC verification to establish identity and address proof. Here is a breakdown of the required documents:

For Individuals:

1. Identity Proof:
   • Aadhaar card
   • PAN card
   • Passport
   • Voter ID card
2. Address Proof:
   • Utility bills (electricity, water, etc.)
   • Rent agreement
   • Bank statement

For Corporates/Businesses:

1. Business Registration Documents:
   • Certificate of Incorporation
   • Partnership deed
2. Authorised Signatory Documents:
   • PAN card of authorised signatories
   • Resolution from the board of directors

Providing accurate and valid documents ensures a smooth KYC process.

e-KYC vs Video KYC under RBI Norms

Here is a comparison between e-KYC and Video KYC based on RBI norms:

Both methods are compliant with RBI guidelines and cater to different customer preferences.

Physical KYC Process per RBI Guidelines

The physical KYC process involves the following steps:

1. Visit the nearest bank or NBFC branch.
2. Submit physical copies of identity and address proof documents.
3. Complete in-person verification with a bank representative.
4. Receive confirmation of KYC completion.

This traditional process is reliable for customers who prefer face-to-face interactions.

Bajaj Finserv Digital KYC for Loans

Bajaj Finserv offers a seamless Digital KYC process for loans through its advanced tools, ensuring convenience and efficiency. Here is how it works:

Benefits of Digital KYC with Bajaj Finserv:

• Paperless and hassle-free process.
• Real-time updates and tracking.
• Accessible from anywhere, anytime.

Failure to comply with RBI KYC guidelines can lead to the following penalties:

1. Account Suspension: Financial institutions may temporarily suspend accounts until KYC is updated.
2. Restricted Access: Customers may face limitations on transactions.
3. Fines: Non-compliance may attract monetary penalties for businesses.

Ensuring timely KYC updates helps avoid these consequences and maintain uninterrupted services.

How to Update KYC Online with Bajaj Finserv

Updating KYC online with Bajaj Finserv is simple and user-friendly. Follow these steps:

1. Download the Bajaj Finserv App or visit the Service Portal.
2. Log in using your registered mobile number.
3. Upload the required KYC documents.
4. Verify the details and submit the application.
5. Track the status of your KYC update in real-time.

Take advantage of Bajaj Finserv’s digital tools for a smooth and efficient KYC process.