Decoding RBI MD regarding KYC

[xfactcc]

Dear Members,

There is a clause regarding Re-KYC in the comprehensive document on KYC released by RBI that is Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on January 04, 2024), in Part V, 38. it states:

Updation / Periodic Updation of KYC

REs shall adopt a risk-based approach for periodic updation of KYC ensuring that the information or data collected under CDD is kept up-to-date and relevant, particularly where there is high risk. However, periodic updation shall be carried out at least once in every two years for high-risk customers, once in every eight years for medium risk customers and once in every ten years for low-risk customers from the date of opening of the account / last KYC updation. Policy in this regard shall be documented as part of REs’ internal KYC policy duly approved by the Board of Directors of REs or any committee of the Board to which power has been delegated.


a) Individuals:

1. No change in KYC information: In case of no change in the KYC information, a self-declaration from the customer in this regard shall be obtained through customer’s email-id registered with the RE, customer’s mobile number registered with the RE, ATMs, digital channels (such as online banking / internet banking, mobile application of RE), letter, etc.

I found the highlighted clause interesting.

Use case:
I have a year old SBM Bank account that I opened online like some of you with PAN+Aadhaar+VKYC. Now they are repeatedly asking me to do re-KYC with same method including VKYC.

I emailed them from my registered email ID stating that no information has changed in my KYC since submission hence please record the same, but they are still sending KYC links and asking me to do it to prevent restrictions of operations. So, I escalated to NO, their reply was KYC is mandatory and I have to do their process.

My question is, is there something I am misinterpreting? If KYC information is unchanged, then the declaration should be sufficed, or else if I must re-submit KYC then the need for self-declaration becomes redundant, as if no change is seen the same is recorded or otherwise the changes are recorded.

Or SBM Bank is trying to stick to their handbook here without paying heed to RBI's guidelines, as they have from time to time?

Learned opinions would be appreciated. @TechnoFino @Abhishek012

The issue has been addressed. Refer to the Closure below.

 

[Tejo]

Dear Members,

There is a clause regarding Re-KYC in the comprehensive document on KYC released by RBI that is Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on January 04, 2024), in Part V, 38. it states:


I found the highlighted clause interesting.

Use case:
I have a year old SBM Bank account that I opened online like some of you with PAN+Aadhaar+VKYC. Now they are repeatedly asking me to do re-KYC with same method including VKYC.

I emailed them from my registered email ID stating that no information has changed in my KYC since submission hence please record the same, but they are still sending KYC links and asking me to do it to prevent restrictions of operations. So, I escalated to NO, their reply was KYC is mandatory and I have to do their process.

My question is, is there something I am misinterpreting? If KYC information is unchanged, then the declaration should be sufficed, or else if I must re-submit KYC then the need for self-declaration becomes redundant, as if no change is seen the same is recorded or otherwise the changes are recorded.

Or SBM Bank is trying to stick to their handbook here without paying heed to RBI's guidelines, as they have from time to time?

Learned opinions would be appreciated. @TechnoFino @Abhishek012

You must and should to do.

Re-kyc doesn't mean to do re-kyc only if there is any change.

Bank may do several times to recognise the ownership and user of the account, time to time.

There were some news that sbm and paytm accounts were used by someone else, rbi requested to do re-kyc of all customers. You can not skip this.

 

[xfactcc]

You must and should to do.

Re-kyc doesn't mean to do re-kyc only if there is any change.

Bank may do several times to recognise the ownership and user of the account, time to time.

There were some news that sbm and paytm accounts were used by someone else, rbi requested to do re-kyc of all customers. You can not skip this.

Then what is the point of this self-declaration?
In what scenario this instrument will be helpful?

 

[Akashn]

I did VKYC for SBM 2 times in 5 months but stupid bank still sent me link for Re-kyc.

 

[Tejo]

Then what is the point of this self-declaration?
In what scenario this instrument will be helpful?

Like for updating current address

 

[xfactcc]

I did VKYC for SBM 2 times in 5 months but stupid bank still sent me link for Re-kyc.

This bank is not serious.

They randomly closed my FD-backed credit card for non-usage without informing me, violating RBI guidelines.

 

[xfactcc]

Important Closure:

Turns out I was right, upon referring the same guideline to the NO, they sent another email within 7 minutes of the last email stating re-KYC is mandatory as mentioned in the original post (which I somehow missed), stating my RE-KYC records have been updated successfully (basis my self-declaration as per RBI guideline mentioned).

Refer to the screenshot.

You may use this instance as precedence.

 

[its_karan]

Important Closure:

Turns out I was right, upon referring the same guideline to the NO, they sent another email within 7 minutes of the last email stating re-KYC is mandatory as mentioned in the original post (which I somehow missed), stating my RE-KYC records have been updated successfully (basis my self-declaration as per RBI guideline mentioned).

Refer to the screenshot.

You may use this instance as precedence and appropriately use it.

Congrats Bro

I'll use this

when my time comes

 

[RAMESH BABU N]

Congrats.

Read Page # 35.

Clearly mentioned about declaration.

 

[SSV]

ClapImportant Closure:

Turns out I was right, upon referring the same guideline to the NO, they sent another email within 7 minutes of the last email stating re-KYC is mandatory as mentioned in the original post (which I somehow missed), stating my RE-KYC records have been updated successfully (basis my self-declaration as per RBI guideline mentioned).

Refer to the screenshot.

You may use this instance as precedence.

Well done ..👏👏

 

[xfactcc]

Congrats.

Read Page # 35.

Clearly mentioned about declaration.

Thank you.

Page 35 of what?

 

[RAMESH BABU N]

Thank you.

Page 35 of what?

Of what we are discussing - the latest RBI's Directives on KYC.

Reserve Bank of India - Master Directions