RBI’s new KYC guidelines to ease compliance

MUMBAI: The RBI has proposed modifications to its grasp route on ‘know your buyer’ norms-rules aimed toward stopping cash laundering-that will ease compliance for thousands and thousands of financial institution prospects, notably low-risk people and beneficiaries of govt schemes. The draft round outlines relaxed procedures for periodic KYC updates, responding to issues over delays and buyer complaints.The proposed guidelines mark a shift from inflexible timelines in the direction of a extra versatile system whereas sustaining safeguards in opposition to cash laundering and terrorist financing. For low-risk prospects, the RBI prolonged the KYC replace deadline to 1 yr from the due date or till June 30, 2026, whichever is later. Throughout this era, transactions will proceed, although the accounts will stay underneath common monitoring. This transfer brings reduction as earlier banks froze accounts that didn’t adjust to re-KYC necessities. To deal with massive backlogs and enhance customer support, the RBI directed banks to enhance communication. Earlier than the due date, regulated entities should ship a minimum of three alerts, together with one by letter.After the due date, one other three reminders are required, once more with a minimum of one letter.