BANKING AFFAIRS

Detailed explanation-1: -RBI has revisited the KYC directions in the context of recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering standards and on Combating Financing of Terrorism and enhanced the KYC standards in line with international benchmarks since India is a member of FATF.

Detailed explanation-2: -KYC is required to be done once in every two years for high risk customers, once in every eight years for medium risk customers and once in every ten years for low risk customers. This exercise would involve all formalities normally taken at the time of opening the account.

Detailed explanation-3: -The process for the periodic updation of KYC (re-KYC) was simplified in May 2021 (Section 38 of RBI Master Direction on KYC). 2. As per the present guidelines, if there is no change in KYC information, a self-declaration to that effect from the individual customer is sufficient to complete the re-KYC process.

Detailed explanation-4: -The objective of KYC/AML/CFT guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities.

Detailed explanation-5: -India: The Reserve Bank of India introduced KYC guidelines for banks in 2002.