The Reserve Bank of India has directed the banks not to use know-your-customer (KYC) norms as an excuse to turn down customers’ request seeking to open no-frills accounts with them. No-frills accounts do not require maintaining minimum balance in customers’ account.
Due to instances of many economically-disadvantaged customers being hurdled while taking loans, the central bank has directed the banks not to stick with the KYC norms for no-frills accounts giving relaxations for low-income group customers. These low profile customers find it difficult to furnish proof of residence on which the banks reject their applications citing KYC norms.
The RBI said the problem of fulfilling norms may be overcome by waiving off KYC norms if a bank’s existing customer, who meets KYC norms, agrees to act as an introducer and certifies the address and photo of the former.