What changed
RBI modified KYC norms to reduce customer inconvenience and support financial inclusion. Banks can now accept a single document for identity and address proof if the address matches the account opening form. Introduction from an existing customer is no longer required for opening accounts. Aadhaar letters are now accepted as proof of address, not just identity.
What it means for you
Urban co-operative banks can streamline account opening by reducing documentation burden, which should speed up onboarding and improve customer experience. The removal of mandatory introduction lowers barriers for new customers, especially those without existing banking relationships. These changes align with PMLA rules and international standards while promoting financial inclusion.
What you must do
- Update your KYC policy to accept a single document for identity and address proof when the address matches the account opening form.
- Remove mandatory introduction requirements from your customer acceptance policy for new accounts.
- Accept Aadhaar letters as valid proof of address for KYC purposes.
- Train frontline staff on these simplified procedures to ensure consistent implementation.
Who it affects
Primary (Urban) Co-operative Banks, New bank customers, Bank compliance and operations teams
Can we still ask for separate identity and address documents if the customer's address on the ID differs from the form?
Yes, if the address on the identity document differs from the current address in the account opening form, you must obtain a separate proof of address. A registered rent agreement is now also acceptable for this purpose.
Is introduction completely banned now?
No, it is not banned, but it is no longer mandatory. Banks should not insist on introduction if the customer provides valid identity and address documents as per KYC norms.
Does this circular apply to all banks or only urban co-operative banks?
This circular is specifically addressed to all Primary (Urban) Co-operative Banks, as indicated by the circular number and title.