The last date to complete all your financial work is 31st March, which is tomorrow. One of the most important money related tasks that all bank account holders across India must not forget to do is to update the KYC (Know Your Customer) details in their accounts. As per RBI guidelines, bank customers should update their identity and address proofs with their lenders from time to time. The deadline for updating KYC in banks has been updated several times since last year amid the Kovid-19 pandemic, but the Reserve Bank of India has now fixed it as March 31.
“In view of the prevailing uncertainty due to the new version of COVID-19, the relaxation provided in the above circular is extended till March 312022,” the central bank had said in a notification on December 30, 2021.
What happens if KYC is not updated in the bank?
During the second wave of the COVID-19 pandemic, the Reserve Bank had asked banks not to force their customers to update their key, Although the pandemic has currently subsided somewhat, India has recorded a little over 1,200 cases as of Wednesday, March 30. The central bank, too, has not extended the deadline beyond Thursday.
All this gives the bank the freedom to freeze the customer’s account if the KYC is not updated. At any given time, there will be hundreds of customers whose KYC validity The term has expired, and their bank account is at risk of facing a freeze. This means that the account holder will not be able to do any transactions – including deposits, withdrawals and money transfers, both online and offline. Credit card and debit card services will also stop if the bank account is frozen. This is done to prevent any kind of money laundering. This is true for every regulated financial entity including mutual funds, depositories, broking houses and finance companies.
Documents Required for Bank KYC
Bank customers are required to furnish the latest information of their identity and address. This includes PAN, address proof (like Aadhar, Passport, etc.), latest photograph and any other information requested by the bank. Under the Prevention of Money Laundering Act, 2002 and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, it is mandatory for regulated entities to collect KYC information from their customers.
RBI Circular on Bank KYC
On May 25, 2021, RBI said in a circular: “Please refer to Section 38 of the Master Direction on KYC dated February 25, 2016, as per which Regulated Entities (REs) are to do periodic updating of KYC. Existing customers of the country. Keeping in view the prevailing COVID-19 related restrictions in various parts, RE is advised that in respect of customer accounts where periodic updation of KYC is due and pending as on date, no restriction shall be imposed on the operation of such account By December 31, 2021, for the only reason, unless required under the directions of any regulatory/enforcement agency/court, etc. Regulated Entities are also advised to update their KYC in such cases. To keep connecting with your customers.”
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