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RBI Guidelines For Kyc

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RBI Guidelines For Kyc

Uploaded by

write2nabhyav
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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RBI Guidelines

on KYC
The Reserve Bank of India (RBI) has established comprehensive
guidelines on Know Your Customer (KYC) procedures for all financial
institutions. These guidelines aim to prevent financial crimes and ensure
the integrity of the banking system.

Aa
BY NABHYAV
SAMARTH
SPARSH
Introduction to KYC
Customer Identification Risk Assessment
KYC requires gathering and verifying Financial institutions must assess the
information about a customer's identity, risk profile of each customer to ensure
address, and other personal details. appropriate monitoring and compliance.

Ongoing Monitoring
KYC is an ongoing process that involves regularly reviewing and updating customer
information.
Key Components of KYC
Customer Customer Due Ongoing
Identification Diligence Monitoring

Gathering and verifying Assessing the customer's Continuously monitoring


customer information such risk profile and transactions and customer
as name, date of birth, understanding the purpose behavior to detect any
address, and identity and nature of the business suspicious or unusual
documents. relationship. activity.
Customer Identification and
Verification
1 Identification 2 Address Verification
Documents
Customers must also provide proof
Customers must provide valid of address, such as a utility bill or
government-issued identification bank statement.
documents such as a passport,
driver's license, or Aadhaar card.

3 Beneficial Ownership
For business customers, the financial institution must identify and verify the beneficial
owners of the account.
Ongoing Monitoring and Review
Risk-based Approach 1
Institutions should adopt a risk-
based approach to KYC, adjusting
the level of monitoring based on the 2 Periodic Review
customer's risk profile. Customer information and
transactions should be periodically
reviewed and updated to ensure
Suspicious Activity 3 ongoing compliance.
Reporting
Any suspicious transactions or
activities must be promptly reported
to the appropriate authorities.
Record-keeping and
Reporting
Record Retention Regulatory Reporting
Financial institutions must maintain Institutions must submit periodic KYC
accurate and up-to-date records of all and anti-money laundering reports to
customer information and transactions the RBI and other regulatory bodies.
for a minimum of 5 years.

Data Security
All customer data must be securely stored and protected from unauthorized access or
misuse.
Compliance and Auditing
1 Internal Audits
Financial institutions must conduct regular internal audits to ensure
compliance with KYC policies and procedures.

2 External Audits
Institutions may also be subject to external audits by regulatory authorities to
assess KYC compliance.

3 Penalties for Non-compliance


Failure to comply with KYC guidelines can result in significant fines and
other penalties from the RBI.
Conclusion and Best Practices

Customer-centric Leveraging Continuous


Approach Technology Improvement
KYC should be implemented Adopting digital solutions can KYC policies and procedures
in a way that balances streamline KYC processes should be regularly reviewed
regulatory requirements with and enhance compliance and updated to address
a positive customer monitoring. evolving regulatory and
experience. industry changes.

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