Opening a bank account just got simpler

As per the Reserve Bank of India's new Know Your Customer norms, customers need not provide separate ID and address proofs to open a new account. Read on to know the new changes will benefit you.

Simplicity is golden... scratch that... it's platinum!

And finally, one of the most complex organisations in the country, the Reserve Bank of India seems to be wrapping its head around the value of simplification.

In a move that is bound to reduce a lot of troubles for the Banking sector consumers, the Reserve Bank of India, via its latest notification (available here) has made significant changes in the Know Your Customer norms.

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In many banks, obtaining of introduction for opening of accounts is still a mandatory part of customer acceptance policy even though documents of identity and address as required are provided.

According to RBI's notification, this poses difficulties for prospective customers in opening accounts as they find it difficult to obtain introduction from an existing account holder.

The RBI has, hence, completely done away with this requirement and has specified that banks should not insist on introduction for opening bank accounts of customers.

As of now, banks have been insisting on two separate sets as documents for identity and address proof as per the RBI guidelines despite the fact that documents for identity proof (Passport, PAN card, Drivers' license etc.) also carry the address of the individual concerned.

This is set to change.

As per the latest RBI notification, if the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her in the account opening form, the document may be accepted as a valid proof of both identity and address.

If the address indicated on the document submitted for identity proof differs from the current address mentioned in the account opening form, a separate proof of address should be obtained.

For this purpose, apart from the documents currently acceptable, a rent agreement indicating the address of the customer duly registered with State Government or similar registration authority may also be accepted as a proof of address.

Similarly, Aadhaar letter is also acceptable as a proof of identity and address both unlike earlier where it was only acceptable as an identity proof.

Simple! Isn't it?

Kudos RBI! That is actually a lot of relief!