• It should be noted that wherever banks desire to collect any information about the
customer for a purpose other than KYC requirements, it should not form part of the
account opening form. Such information may be collected separately, purely on a
voluntary basis, after explaining the objectives to the customer and taking his express
approval for the specific uses to which such information could be put.
• There must be Know Your Customer procedures for existing customers.
• Banks are expected to have adopted due diligence and appropriate KYC norms at the
time of opening of accounts in respect of existing customers. However, in case of any
omission, the requisite KYC procedures for customer identification should be completed
at the earliest. Additionally, banks must, on the basis of materiality, apply the KYC
guidelines to all existing accounts.
• Transactions in existing accounts should be continuously monitored and any unusual
pattern in the operation of the account should trigger a review of the customer
confidential documentation measures. Banks could apply monetary limits to such
accounts based on the nature and type of the account. It may however be ensured that all
existing accounts of companies, firms, trusts, charities, religious organizations and other
institutions are subjected to minimum KYC standards which would establish the identity
of the natural/ legal person and those of the “beneficial owners.” Banks should also
ensure that term/ recurring deposit accounts or accounts of similar nature are treated as
new accounts at the time of renewal and subjected to revised KYC procedures.
• Where the bank is unable to apply appropriate KYC measures due to nonfurnishing of
information and or/ noncooperation by the customer, the bank should close the account
or terminate the relationship after issuing due notice to the customer explaining the
reasons for taking such a decision. Such decisions need to be taken at a reasonably senior
• To ensure that existing small account holder