Account Opening and KYC

Q. What is KYC?
Know Your Customer - KYC enables banks to know/ understand their customers and their financial dealings to be able to serve them better and manage its risks prudently.

Q. Why KYC?
To establish the identity of the client : This means identifying the customer and verifying his/ her identity by using reliable, independent source documents, data or information. For individuals, bank will obtain identification data to verify the identity of the customer, his address/ location and also his recent photograph. This will be done for the joint holders and mandate holders as well. For non-individuals, bank will obtain identification data to:

  • verify the legal status of the legal person/ entity
  • verify identity of the authorized signatories and
  • verify identity of the Beneficial owners/ controllers of the account
To ensure that sufficient information is obtained on the nature of employment/ business that the customer does / expects to undertake and the purpose of the account

Q. Are KYC requirements new?
No, KYC requirements have always been in place and Banks have been taking KYC documents in accordance with the guidelines issued by RBI from time to time. RBI has revisited the KYC guidelines in the context of recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering standards and on Combating Financing of Terrorism and enhanced the KYC standards in line with international benchmarks

Q. Is KYC mandatory?
Yes. It is a regulatory and legal requirement. Regulatory: In terms of the guidelines issued by the Reserve Bank of India (RBI) on 29th November 2004 on Know Your Customer [KYC] Standards – Anti Money Laundering [AML] Measures, all banks are required to put in place a comprehensive policy framework covering KYC Standards and AML Measures.

Legal: The Prevention of Money Laundering Act, 2002 (PMLA) which came into force from 1st July, 2005 (after “rules” under the Act were formulated and published in the Official Gazette) also requires Banks, Financial Institutions and Intermediaries to ensure that they follow certain minimum standards of KYC and AML as laid down in the Act and the “rules” framed there under.

Q. When does KYC apply?
KYC will be carried out at the following stages:

Opening a new account Opening a subsequent account where documents as per current KYC standards not been submitted while opening the initial account Opening a Locker Facility where these documents are not available with the bank for all the Locker facility holders When the bank feels it necessary to obtain additional information from existing customers based on conduct of the account When there are changes to signatories, mandate holders, beneficial owners etc

KYC will also be carried out in respect of non-account holders approaching the bank for high value one-off transactions.

Q. Who is my contact point in the Bank for KYC purposes?
Your contact point in the Bank will be the Relationship Manager or the officer who opens your account and who is in touch with you for your transactions.

Q. What will happen if I do not provide the required KYC information / documents to the Bank?
The Bank will be entitled to refuse to open the account (if you are a prospective customer) or discontinue its relationship with you citing non-providing of KYC information / documents (if you are an existing customer).
However, for certain categories of customers who are not able to provide the necessary documents, the Bank will open the account as per the flexibility provided vide RBI DBOD circular no. AML.BC.28/14.01.001/2005-06 dated 23rd August, 2005.

Customer Identification Procedure: In line with the RBI mandate, the following features need to be verified and the relevant documents must be obtained from customers:

Features Documents
Accounts of individuals
  • Legal name and any other names used
  • Correct permanent address
 (i) Passport (ii) PAN card (iii) Voter’s Identity Card (iv) Driving license (v) Job card issued by NREGA duly signed by an officer of the State Government (vi) UIDAI (Aadhaar) Card

(i) Property or Municipal Tax receipt (not more than 1 year old) (ii) Pension or family pension payment orders (iii) Letter issued by Foreign Embassy or Mission in India certifying/mentioning customer's current residential address. (iv) Any Identity Document issued by Government department or agency of foreign jurisdiction (v) Identity card with applicant's Photograph issued by Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions (vi) Letter issued by a gazetted officer (with a duly attested photograph of the person containing name, current address, permanent address, nationality and DOB of the customer;) (vii) Utility bill (electricity, telephone, postpaid mobile phone, internet, piped gas, water bill) (viii) Bank account statement or Post Office savings bank account statement (Statement should not be more than two months old & Bank account shall be of any scheduled commercial Bank) (ix) Letter from employer

Please Note: Acceptance of above documents are subject to satisfaction of the bank.
Accounts of companies
  • Name & registration details of the company
  • Principal place of business (registered address)
  • Operating address of the company
  • Telephone/Fax Number
  • Certificate of incorporation and Memorandum & Articles of Association
  • Latest Annual Return with the ROC acknowledgement
  • List of Directors and the Form 32s supporting their director status
  • Resolution of the Board of Directors to open an account and identification of those who have authority to operate the account
  • Power of Attorney granted to its managers, officers or employees to transact business on its behalf
  • PAN proof for the Company
  • Any utility Bill for the operating address
  • Identity and address proof as applicable to accounts of individuals for all signatories, the Managing Director, the Chairman and signatories to the Board Resolution and all ultimate individual shareholders holding 10% and above capital of the company.
  • KYC for any company which is a significant shareholder of this company.
Accounts of partnership firms
  • Evidence Legal name
  • Evidence of Address (Registered and Operating)
  • Names of all partners and their addresses
  • Telephone numbers of the firm and partners
  • Registration certificate, if registered OR any business registration document (eg, Sales Tax Registration/ Service Tax Registration, Shops & Establishments Registration, Factory Registration etc)
  • Partnership deed copy
  • Power of Attorney granted to any employee of the firm to transact business on its behalf
  • Any utility bill in the firm’s name evidencing its operating address
  • KYC documents for all partners and Power of Attorney holders
  • PAN proof for the Firm
Accounts of trusts & foundations
  • Names of trustees, settlers, beneficiaries and signatories
  • Names and addresses of the founder, the managers/directors and the beneficiaries
  • Telephone/fax numbers
  • Certificate of registration, if registered or PAN Allotment letter / Acknowledged Income Tax Return, if not the Trust is not registered
  • Any utility Bill for the Operating and Registered address evidence
  • Trust Deed copy
  • Power of Attorney granted to any employee to transact business on its behalf
  • Trust Resolution of the managing body of the foundation/association
  • KYC documents for the trustees, signatories and all beneficial owners with 10% and above share