RBI Proposes Draft Amendments to KYC Master Directions to Simplify Compliance

Current Context: The Reserve Bank of India (RBI) has proposed draft amendments to its Know Your Customer (KYC) Master Directions, aiming to simplify compliance and reduce the burden on customers, particularly those classified as low-risk.

Key Highlights:

• Extended KYC Update Timeline: Low-risk individual customers can update their KYC within one year of its due date or by June 30, 2026, whichever is later.
• Role of Business Correspondents (BCs): BCs can now assist in KYC updation by collecting self-declarations for cases where there is no change or only an address update.
• Enhanced Customer Communication: Banks must provide three advance intimations and three reminders, including one via postal letter, to customers regarding their KYC update requirements.
• KYC Camps & Outreach: Banks are advised to conduct intensive campaigns, including rural and semi-urban outreach programs, to expedite KYC updates.
• Public Consultation: RBI has invited public comments on the draft circular until June 6, 2025.

Question:

Q.1 As per RBI's proposed KYC changes, how many advance intimations must banks give before the KYC due date?
a) Two
b) One
c) Three
d) Four

Answer: c) The draft mandates that banks must send three advance intimations to customers regarding KYC update requirements to ensure timely compliance.