RBI relaxes KYC norms for banks

Relaxing the KYC norms, RBI has said that the banks will now be required to update KYC data only once in two years for high risk entities, and just once in 10 years for low-risk clients. In a notification, RBI said, “The issue has been reviewed in the light of practical difficulties/constraints expressed by bankers/customers in obtaining/submitting fresh KYC documents at frequent intervals as the relative documents submitted earlier specially by low- risk customers have remained unchanged in most of the accounts.” RBI has asked banks to exercise full KYC procedure at least every two years for high risk individuals and entities, from the earlier directive of not less than once in two years. For low risk individuals and entities, the KYC data updation has been relaxed to at least every 10 years from the requirement of not less than once in five years earlier. For medium risk individuals and entities it has been relaxed to at least every eight years, from not less than once in two years. It said however that banks may continue carrying out on-going due diligence with respect to business relationship with every client