The Reserve Bank of India (RBI) said that banks will now be required to update KYC (know your customer) data only once in two years for high risk clients, and once in 10 years for low-risk clients.
"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 said in a notification on Tuesday.
Banks would need to continue to carry out on-going due diligence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and, wherever necessary, the source of funds, it said.
Full KYC exercise will be required to be done at least every two years for high risk individuals and entities.
Full KYC exercise will be required to be done at least every 10 years for low risk and at least every eight years for medium risk individuals and entities.
Positive confirmation (obtaining KYC related updates through e-mail/letter/telephonic conversation/forms/interviews/visits, etc.), will be required to be completed at least every two years for medium risk and at least every three years for low risk individuals and entities.
Fresh photographs will be required to be obtained from minor customer on becoming major.