What changed
RBI modified KYC norms to allow a single document (e.g., passport, driver's license) to serve as both identity and address proof if the address matches the customer's declaration. Banks can no longer insist on an introduction from an existing customer for opening accounts, as it is not required under PMLA or RBI instructions. Aadhaar letters are now accepted as proof of address, not just identity.
What it means for you
For RRBs and cooperative banks, this reduces documentation burden on customers, potentially speeding up account opening and lowering drop-offs. It aligns KYC processes with financial inclusion goals by removing barriers like mandatory introductions. Banks must update their customer acceptance policies and train staff to accept single-document proofs and Aadhaar for address verification.
What you must do
- Update internal KYC policies to accept a single document for identity and address proof when the address matches the customer's declaration.
- Remove mandatory introduction requirements from account opening procedures for all customer segments.
- Train frontline staff to accept Aadhaar letters as valid proof of address for KYC purposes.
- Communicate these changes to customers through branch notices and digital channels to reduce confusion.
Who it affects
Regional Rural Banks (RRBs), State and Central Cooperative Banks, Customers opening new accounts, Bank branch staff handling account openings
Can we still ask for separate address proof if the identity document shows a different address?
Yes, if the address on the identity document differs from the customer's declared current address, you must obtain a separate proof of address, such as a rent agreement registered with the state government.
Is introduction from an existing customer completely banned now?
Yes, RBI has clarified that introduction is not mandatory under PMLA or its KYC instructions, so banks should not insist on it for opening accounts.
Does this circular apply to all banks or only RRBs and cooperative banks?
This specific circular is addressed to Chairmen/CEOs of all Regional Rural Banks and State and Central Cooperative Banks, so it applies directly to them.