Reserve Bank of India makes opening a bank account easier

The Reserve Bank of India (RBI), as part of the financial inclusion plan, has relaxed “know your customer” (KYC) norms to open new bank accounts. RBI has directed banks to accept a single document, such as a driving licence, which contains the applicant’s photograph and address to open an account. Officially valid documents for KYC include passport, driving licence, voter ID card, PAN card, letter issued by Unique Identification Authority of India (UIDAI) and job card issued by Mahatma Gandhi National Rural Employment Guarantee Scheme and signed by a state government official. To make the process of opening an account easier, banks will be treat information containing personal details like name, address, age, gender and photographs made available by UIDAI as a result of e-KYC process as officially valid documents, RBI said. Applicants will not need to submit separate proof for current address. “If the current address is different from proof of address submitted by the customer, a simple declaration about the current address will be sufficient,” the RBI said. Customers will also not need to submit separate KYC proof for transfer of a bank account from one branch to another. Banks will open small accounts for people without officially valid documents. A person can open a small account with a self-attested photograph and signature or thumb print in the presence of a bank official. RBI has limited the credit in such accounts to Rs100,000 a year, withdrawals to Rs10,000 per month and account balance to not more than Rs50,000 at any point in time. These accounts will be valid for 12 months, within which the customer can submit officially valid documents to open a regular savings account. The customer can, alternately, renew the small account with proof of application for officially valid documents.