RBI proposes to use biz correspondent network to tackle KYC, inoperative account issues

Mumbai, My 23 (PTI) Faced with growing complaints on know-your-customer (KYC)-related matters, the Reserve Bank on Friday said it is contemplating to allow banks to take help of the vast network of business correspondents.

The central bank further said it is also mulling to allow authorised business correspondents of banks to help activate inoperative accounts.

In a draft circular on updation/periodic updation of KYC released on Friday, the central bank said it has observed a large pendency in periodic updation of KYC, including in the accounts opened for credit of Direct Benefit Transfer (DBT), Electronic Benefit Transfer (EBT) under government schemes to facilitate credit of DBTs.

It has also been observed that the troubles are being faced by the accounts opened under the Prdhan Mantri Jan Dhan Yojana as well, it said.

The RBI has also been receiving complaints regarding challenges faced by the customers in periodic updation of their KYC, it said.

"In order to further ease the process for the convenience of customers, the instructions regarding updation/periodic updation of KYC are being amended with the intent , inter alia, to allow BCs to facilitate in the process of KYC and KYC updation," he draft circular said.

The general public can submit their comments on the proposals by June 6.

The RBI is also considering a proposal to ask banks to organise camps and launch intensive campaigns focusing on periodic updation of KYC, especially in rural and semi urban branches and the branches having pendency in periodic updation of KYC, it said, exhorting lenders to take an "empathetic view".

As per the central bank, the difficulties are being faced despite simplifying the instructions on customer onboarding and updation/periodic updation of customers' KYC.

On the issue of inoperative accounts, the RBI's draft circular said deposit accounts maintained with banks which have not seen any activity for over ten years result in the deposit amounts being transferred to the Depositor Education and Awareness Fund.

"...an authorised BC of the bank may be utilized for activation of inoperative accounts," the draft circular reads.

Additionally, it said banks should make available the facility of updation of KYC for activation of inoperative accounts/unclaimed deposits at all branches including the non-home branches and through Video-Customer Identification Process, if a customer requests for it.

The public can comment on the draft on inoperative accounts by June 6, the central bank said. PTI AA HVA