What changed
RBI expanded the indicative list of documents for opening proprietary concern accounts. Two new document types were added: the complete Income Tax return (not just the acknowledgement) in the proprietor's name reflecting firm income, and utility bills (electricity, water, landline telephone) in the concern's name.
What it means for you
Banks now have clearer guidance on acceptable KYC documents for proprietary concerns, reducing ambiguity in customer onboarding. This helps standardize documentation across lenders and strengthens due diligence by requiring full IT returns rather than just acknowledgements. Lenders should update their internal KYC checklists and train staff on these additional acceptable documents.
What you must do
- Update your bank's KYC document checklist for proprietary concerns to include complete Income Tax returns and utility bills (electricity, water, landline).
- Train branch and operations staff on accepting these new documents as valid proof of business existence.
- Review existing proprietary concern accounts opened after April 2012 to ensure documentation meets the updated guidelines.
- Communicate the revised document list to customers opening new proprietary concern accounts.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), All India Financial Institutions, Local Area Banks, Proprietary concern customers
Can we accept only the ITR acknowledgement for proprietary concern accounts now?
No. The circular specifies that the complete Income Tax return (not just the acknowledgement) in the sole proprietor's name, reflecting the firm's income and authenticated by tax authorities, is required.
Are utility bills mandatory or just an option for KYC?
They are part of the indicative list, meaning banks may accept them as one of the documents to establish the proprietary concern's existence. They are not mandatory if other valid documents are provided.