Accounts of nonfacetoface customers
• With the introduction of telephone and electronic banking, banks are increasingly
opening accounts for customers without the need for the customer to visit the bank
• In the case of nonfacetoface customers, apart from applying the usual customer
identification procedures, there must be specific and adequate procedures to mitigate the
higher risk involved.
• Certification of all the documents presented may be insisted upon and, if necessary,
additional documents may be called for. In such cases, banks may also require the first
payment to be effected through the customers account with another bank which, in turn,
adheres to similar KYC standards.
• In the case of crossborder customers, there is the additional difficulty of matching the
customer with the documentation and the bank may have to rely on third party
certification/introduction. In such cases, it must be ensured that the third party is a
regulated and supervised entity and has adequate KYC systems in place.
Lower income groups
• In October 2005, the RBI stated that KYC guidelines should not be an excuse for banks
to keep the poor away from the banking system. Though the KYC guidelines require an
individual opening a new account to produce a number of identification documents, these
could be done away with for lower income groups. The RBI has asked banks to ensure
that the inability of the lower income group to produce documents to establish their
identity and address does not lead to their financial exclusion and denial of banking
services. A simplified procedure could be provided for opening of accounts in respect of
those persons who do not intend to keep balances above Rs. 50,000 and whose total credit
in one year is not expected to exceed Rs.100,000.
Hindu Undivided Families
• Hindu undivided families should submit:
• A HUF declaration that has been signed by all the coparceners affirming the
composition of the HUF, its karta and names and relationship of all coparceners includ