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Amid the second wave coronavirus surge, Reserve Bank of India's Governor Shaktikanta Das made an unscheduled speech today.

RBI Governor Shaktikanta Das said that the central bank will continue to monitor the emerging COVID-19 situation and will deploy all resources and instruments at its command for citizens, business entities, and institutions beleaguered by the second wave.

RBI has announced rationalisation of KYC compliance norms, provides for video-based KYC for certain categories.

"Taking forward the initiatives of the Reserve Bank for enhancing customer convenience, it has been decided to rationalise certain components of the extant KYC norms. These include (a) extending the scope of video KYC known as V-CIP (video-based customer identification process) for new categories of customers such as proprietorship firms, authorised signatories and beneficial owners of Legal Entities and for periodic updation of KYC; (b) conversion of limited KYC accounts opened on the basis of Aadhaar e-KYC authentication in non-face-to-face mode to fully KYC-compliant accounts; (c) enabling the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of electronic documents (including identity documents issued through DigiLocker) as identify proof; (d) introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of customers," Shaktikanta Das said.

" Further, keeping in view the COVID related restrictions in various parts of the country, Regulated Entities are being advised that for the customer accounts where periodic KYC updating is due/pending, no punitive restriction on operations of customer account(s) shall be imposed till 31 December 2021 unless warranted due to any other reason or under instructions of any regulator/enforcement agency/court of law, etc.," the Governor said.

He further added that account holders are requested to update their KYC during this period.

Know Your Customer ( KYC) is a process where banks obtain information about their customers’ identity thereby ensuring that bank services are not misused. The KYC procedure is used when bank customers open accounts. Periodic updation has to be carried out at least once every two years for high-risk customers, once eight years for medium risk customers and once every ten years for low-risk customers.

India has been witnessing a massive surge in COVID-19 cases in its second wave, recording over 3 lakh new cases and over 3000 related deaths on a daily basis, thus impacting the country's health care infrastructure as well as the economy.

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