RBI Mandates Enhanced KYC Updation Protocols for Banks
The Reserve Bank of India has issued new directives requiring banks to proactively notify customers about KYC updates to enhance consumer protection. These guidelines aim to streamline the process through Business Correspondents and promote compliance in the banking sector, focusing on rural and semi-urban regions.
- Country:
- India
The Reserve Bank of India (RBI) issued directives on Thursday requiring banks and other regulated entities to notify customers well in advance of any need for periodic Know Your Customer (KYC) updates. This initiative aims to bolster consumer protection and improve banking services.
The RBI circular highlighted a significant backlog in KYC updates for accounts linked to governmental Direct Benefit Transfer (DBT) schemes. To facilitate easier compliance, amendments now allow Business Correspondents to assist in updating KYC information efficiently.
The guidelines specify the need for at least three reminders before and after the due date for KYC updates, with notices including easy-to-follow instructions. Banks are encouraged to conduct special camps to expedite the process, particularly in rural and semi-urban areas, ensuring comprehensive consumer outreach and compliance.
(With inputs from agencies.)
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