The rules have been eased due to practical difficulties and constraints in getting Know-Your-Customers (KYC) documents at frequent intervals.
"Full KYC exercise will be required to be done at least every 2 years for high risk individuals and entities.
"Full KYC exercise will be required to be done at least every 10 years for low risk and at least every 8 years for medium risk individuals and entities, taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained," RBI said in a notification.
However, it added that physical presence of clients may not be insisted at such periodic updations.
RBI asked Non-Banking Financial Companies (NBFCs) to continue carrying out on-going due diligence with their clients and closely examine transactions to ensure their consistency, business and risk profile and source of funds.
Also, NBFCs would be required to get fresh photographs of minor customers on becoming major.
As per earlier norms, NBFCs were required to undertake KYC once in every 5 years for low risk category customers and once in two years for high and medium risk categories.
Further, RBI said NBFCs need not ask for fresh proofs of identity and address during periodic updation for low risk clients if their address/identity remains unchanged.
"In case of change of address of such low risk customers, they could merely forward a certified copy of the document (proof of address) by mail/post," it added.
Also, RBI said NBFCs should not ask a customer for fresh submission of proof in case he or she desires to open a new account with them.
"NBFCs may revise their KYC policy in the light of above instructions and ensure strict adherence to the same," it added.

Latest News  from Business News Desk