Is KYC mandatory for NBFC?

The Finance Minister Nirmala Sitharaman today announced that Non-banking financial companies will be permitted to use the Aadhaar based bank mandated KYC to avoid repeating the process for the customers. NBFCs to be permitted to use Aadhaar authenticated bank KYC to avoid repeated processes.

What is KYC in NBFC?

‘Know Your Customer’ (KYC) Guidelines – Anti Money Laundering Standards.

What are the RBI guidelines on KYC?

As part of ‘Know Your Customer’ (KYC) principle, RBI has issued several guidelines relating to identification of depositors and advised the banks to put in place systems and procedures to help control financial frauds, identify money laundering and suspicious activities, and for scrutiny/monitoring of large value cash …

Can NBFC use eKYC?

Now with eKYC, non-banking entities offering financial services can improve compliance and also ensure that the popular mechanism of customer on-boarding for which they had to depend on third party players can be offered directly through a KUA license. …

When were guidelines for compliance to KYC norms were issued by RBI?

The ‘Know Your Customer’ guidelines were issued in February 2005 revisiting the earlier guidelines issued in January 2004 in the context of the Recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering (AML) standards and on Combating Financing of Terrorism (CFT).

In which cases KYC norms are applicable?

KYC is required to be done once in every two years for high risk customers, once in every eight years for medium risk customers and once in every ten years for low risk customers. This exercise would involve all formalities normally taken at the time of opening the account.

What are the KYC guidelines?

Proof of Identity and Proof of address

  • Passport,
  • Driving Licence,
  • Voters’ Identity Card.
  • PAN Card.
  • Aadhaar Card issued by UIDAI and.
  • Job card issued by NREGA duly signed by an officer of the State Government.
  • Letter issued by the National Population Register containing details of name and address.

When did RBI issued KYC guidelines?

What are AML guidelines?

AML laws and regulations target criminal activities including market manipulation, trade in illegal goods, corruption of public funds, and tax evasion, as well as the methods used to conceal these crimes and the money derived from them.

What is AUA and Kua?

Authentication User Agency (AUA): An AUA is any entity that uses Aadhaar authentication to enable its services and connects to the CIDR through an ASA. e-KYC User Agency(KUA): An KUA is any entity, which requires the authentication of the Aadhaar card in terms of Biometric data of the Aadhaar Card holder from KSA.

What is eKYC application?

E-KYC is essentially the process by which KYC is done. So, eKYC is when authorised organisations and agents verify a customer’s identity and address digitally via Aadhaar authentication. In other words, eKYC verification is done through a digital mode, and there is no need for physical documentation.

Who formulates the KYC norms for a financial Organisation?

As per RBI guidelines issued vide their circular dated 29/11/2004, all banks are required to formulate a KYC Policy with the approval of their respective boards. The KYC Policy consists of the following four key elements.

What are the RBI KYC directions 2016?

These Directions are called the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 and came into effect from the day it was published. 1. Chapter-I of the document covers basic information on applicability and definition of different terms which are later used in reference. 2.

How to verify the compliance of NBFC with KYC guidelines?

The NBFC should make available all information to the Bank to verify the compliance with the KYC guidelines and accept full consequences of any violation by the persons authorised by NBFCs including brokers/agents etc. who are operating on its behalf.

Are NBFCs supervised&regulated by RBI?

Chapter III B of the RBI Act, 1934, lays down the provisions related to functions of NBFCs and hence, are supervised & regulated based on them. In addition, it is mandatory for the NBFCs to be duly registered as required under the Companies Act, 2013.

Who is a customer under the KYC norms?

For the purpose of KYC Norms, a ‘Customer’ is defined as a person who is engaged in a financial transaction or activity with a reporting entity and includes a person on whose behalf the person who is engaged in the transaction or activity, is acting.