Uniform KYC norm for financial sector by December

Uniform KYC norm for financial sector by December

Uniform KYC norm for financial sector by December

You will need to fill up only one KYC form for verification of identity by your bank, insurer or any other financial sector entity in which you have invested or want to invest.

By the end of this year, the government is planning to bring a uniform know your customer (KYC) norm for all kind of investments.

Financial sector regulators are working in cohesion to bring out the uniform KYC rules, a government official said.

“By the end of December it (uniform KYC) is expected to be in place,” the official said. KYC norms enable banks to understand their customers and their financial dealings better.

This helps them manage their risks prudently. Another objective of KYC guidelines is also to prevent banks from being used intentionally or unintentionally by criminal elements for money laundering activities.

Banks, insurers and export credit agencies are increasingly demanding that customers provide detailed anti-corruption due diligence information to verify their probity and integrity. KYC policies are also becoming important globally to prevent identity theft, financial fraud, money laundering and terror financing.

The Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority, and the Pension Fund Regulatory and Development Authority are working with Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). 

CERSAI, set up in 2011, works towards preventing frauds involving multiple lending by different banks on the same immovable property.

Once the uniform norms come into force, KYC verification by one organisation will be accepted by another.