RBI simplifies process of opening new bank accounts

In order to have a larger section of the Indian population as part of the banking system, the Reserve Bank of India (RBI) has simplified the process of opening new bank accounts, especially for “low risk customers”. The notification was issued last week. This step will benefit a large number of customers, especially the migrant workers and transferred employees, who have shifted their place of stay, time and again, for work. They often face hurdles in submitting a proof of current or permanent address while opening a bank account.From here on, the central bank has said that only one address proof is sufficient to open a new bank account. As per the RBI list, one can submit a copy of utility bills of any service provider, which is not more than two months old. These include telephone, piped gas, water, electricity or postpaid mobile phone bill. You can also submit property or municipal tax receipts; bank account or post office savings bank account statements; and pension or family pension payment orders issued to retired employees by Government departments or public sector undertakings, if these contain the address, to open an account.   At the same time, letter of allotment of accommodation from employer issued by State or Central Government department, statutory or regulatory body, public sector undertaking, scheduled commercial bank, financial institution or a listed company, can also be given. Similarly, leave and license agreements with such employers allotting official accommodation and documents issued by Government departments of foreign jurisdictions and letter issued by foreign embassies or mission in India, can also be submitted. This means that one of these documents can be submitted to open a bank account.   The additional documents mentioned above shall be deemed to be officially valid documents (OVDs) under ‘simplified measure’ for the ‘low risk’ customers for the limited purpose of proof of address where customers are unable to produce any OVD for the same, the central bank noted.   It is true that the Pradhan Mantri Jan Dhan Yojana (PMJDY) helped in major financial inclusion and getting a major section of population under the banking ambit, but there is still a lot to be done.   Last year, the central bank, in a notification, had further simplified KYC norms for bank accounts. It let bank customers submit a single address proof to open a bank account. The notification said, “Henceforth, customers may submit only one documentary proof of address, either current or permanent, while opening a bank account or while undergoing periodic updation. In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address may be submitted to the branch within a period of six months.”   The RBI had received references from various quarters, especially migrant workers, transferred employees, regarding problems faced in submitting a proof of current or permanent address while opening a bank account. The matter has been examined in the light of amendment to the Prevention of Money Laundering Rules (Maintenance of Records), 2005, and accordingly it was decided to simplify the requirement of submission of proof of address.

[ ” source – indiainfoline.com”]