Reserve Bank of India (RBI) has relaxed Know-Your-Customers (KYC) norms for Non-Banking Financial Companies (NBFCs).
In this regard, RBI has amended the KYC norms in order to remove the practical difficulties and constraints being faced by NBFC’s in getting KYC documents at frequent intervals.
Previously, as per the norms it was necessary for NBFC’s to undertake KYC once in every 5 years for low risk category customers and once in two years for both high and medium risk categories.
But as per new norms, full KYC exercise will be required to be done at least every 10 years for low risk and at least every 8 years for medium risk individuals and entities.
While for the high-risk individuals and entities, it should be done in at least every 2 years.
This full KYC exercise will be done by taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained.
However, the new norm does not mention physical presence of clients for such periodic updations.