Changes to KYC regulations: The Reserve Bank of India (RBI) notified modifications to the Master Directions pertaining to Know Your Customer (KYC) on November 6, 2024. The revised provisions will go into effect right away.
On November 6, 2024, the Reserve Bank of India (RBI) announced changes to the Master Directions on Know Your Customer (KYC). The revised provisions in the Master Direction would take effect immediately. On November 6, 2024, the central bank issued a circular announcing this.
What is KYC & KYC requtrements for Banks
“Know Your Cust” is what KYC full form in bank & Oxford dictionary.On November 6, 2024, the Reserve Bank of India (RBI) announced changes to the Master Directions on Know Your Customer (KYC). The revised rules in the Master Direction will take effect immediately. On November 6, 2024, the central bank issued a circular announcing this.
“omer” and describes how financial institutions verify the identity of their clients. KYC is essential because it protects the client and the company from illegal activities like money laundering and terrorism funding.
What is Digital KYC RBI guidelines?
Digital KYC” means the capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the RE is digital KYC online as per the provisions contained in the Act.
“The Master Direction on has been amended to (a) align the instructions with the recent amendments carried out in the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 via Gazette Notification dated July 19, 2024, (b) incorporate instructions in terms of the corrigendum dated April 22, 2024 issued by the Government of India to the Order dated February 2, 2021 on the ‘Procedure for implementation of Section 51A of the Unlawful Activities (Prevention) Act, 1967, and (c) revise certain existing instructions,” according to the RBI notification dated November 6th are the Kyc-pmla guidelines.
The following legislation and regulations were amended to bring the KYC Directions into compliance with current changes:
1)Kyc criteria for banks PMLA India, paragraph 37
The “Explanation” has been moved since it applies to paragraph 37’s sub-paragraphs (a) and (b), which state that “High risk accounts have to be subjected to more intensified monitoring.”
2) Customer Acceptance Policy, Paragraph 10:-
The CDD procedure is now applied at the UCIC level, eliminating the need for a fresh CDD exercise when an existing KYC compliant customer wishes to open another account or avail another product or service.
Sharing KYC information with the Central KYC Records Registry (CKYCR) and the CDD Procedure (paragraph 56) The Master Direction’s paragraph 56(h) is changed to say the following: REs must upload or update the KYC data related to individual customer accounts and LEs opened before the aforementioned dates in accordance with clauses (e) and (f), respectively, at the time of periodic updation as outlined in paragraph 38 of this Master Direction, or earlier, when the updated KYC information is obtained/received from the customer. This will guarantee that all KYC records are incrementally uploaded on to CKYCR.
Additionally, in accordance with clause (j) below in this paragraph or Rule 9(1C) of the PML Rules, the RE must provide the updated information to CKYCR within seven days, or within a timeframe that may be specified by the Central Government, whenever it receives new or updated information from a customer. CKYCR will then update the KYC records of the current customer in CKYCR. After that, CKYCR will electronically notify all reporting institutions that have interacted with the concerned client of the customer’s KYC record update. When CKYCR notifies a RE of a change to an existing customer’s KYC record, the RE is responsible for retrieving the revised records from CKYCR and updating the RE’s own KYC record.
4) The MD’s Annex II on KYC The Central Nodal Officer for the UAPA has been renamed from “Additional Secretary” to “Joint Secretary” in accordance with the Government of India’s April 22, 2024, corrigendum to the Order dated February 2, 2021 concerning the “Procedure for implementation of Section 51A of the Unlawful Activities (Prevention) Act, 1967.”
Paragraph 56(j) of the Master Direction amends to require the RE to obtain the KYC Identifier from the customer or retrieve it from CKYCR for account-based relationship establishment, periodic updates, and customer identity verification
Unless-
(i) the customer’s information as it appears in CKYCR records has changed;
(ii) the information retrieved or the KYC record is incomplete or does not comply with the current applicable KYC norms;
(iii) the downloaded documents’ validity period has passed; or
(iv) the RE deems it necessary to confirm the customer’s identity or address, including current address; to carry out enhanced due diligence;
or to create a suitable risk profile of the customer.
The Master Direction on KYC has been renamed ‘paragraph’, replacing all internal cross-references to’section’ with a new, more concise term.