RBI New KYC Guidelines: Streamlining Financial Security 2024

Understanding KYC and Recent Updates

• Know Your Customer (KYC) is a verification process used by financial institutions
• RBI announced updates to Master Directions on KYC, effective November 6, 2024
• Changes align with Prevention of Money Laundering Rules and UAPA amendments
• Primary goal: Prevent illegal activities like money laundering and terrorism financing
• Essential process includes customer identification, document verification, and address proof

Key Amendments and Simplifications

• Introduction of Unique Customer Identification Code (UCIC) for each customer

Risk-based periodic KYC updates:

• • High-risk customers: Every 2 years
  • Medium-risk customers: Every 8 years
  • Low-risk customers: Every 10 years
• No redundant KYC for existing customers within same institution
• Mandatory upload of KYC data to Central KYC Records Registry (CKYCR)
• Seven-day timeline for updating CKYCR with new customer information
• Enhanced monitoring of high-risk accounts with frequent transactions
• Change in UAPA central nodal officer designation from Additional Secretary to Joint Secretary

Domestic Money Transfer (DMT) Framework

• New guidelines effective November 2024

Stricter verification requirements:

• • Mandatory recording of beneficiary's name and address
  • Verification of remitter's mobile number and documents
  • Additional authentication factor for each transaction
• Banks must comply with Income Tax Act provisions for cash deposits
• Specific identifiers required for cash-based remittances
• Implementation of IMPS and NEFT transaction messaging requirements