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RBI extended CKYCR to Legal Entities from Individual Accounts w.e.f. April 1, 2021: December 2020

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RBI extends CKYCR to legal entitiesOn December 18, 2020, the Reserve Bank of India (RBI) has amended the Master Direction (MD) on “Know Your Customer (KYC)”, dated February 25, 2016, by extending the applicability of centralized KYC registry to legal entities (LEs), from individual accounts w.e.f. April 1, 2021.

  • In this regard, Regulated Entities (REs) will upload the KYC data pertaining to the accounts of LEs opened on or after 1 April 2021, on to CKYCR in terms of Rule 9 (1A) of the PML (Prevention of Money-laundering) Rules.
  • Since 2017, banks, non-banks, and other entities regulated by RBI have been uploading the KYC data of individual accounts opened on or after 1 January 2017 on to the centralized KYC registry (CKYCR).

Key Points:

–In case of accounts of LEs opened prior to April 1, 2021, the KYC records are uploaded on to CKYCR during the process of periodic updation as specified in Section 38 of the MD.

–REs should ensure that during periodic updation, the customers’ KYC details are migrated to current Customer Due Diligence (CDD) standards.

How KYC is useful?

The objective of KYC is to prevent banks from being used by criminal activities for money laundering or terrorist financing. KYC procedures also enable banks to understand their customers and their financial dealings better, resulting in good management of risks.

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About Reserve Bank of India (RBI):

Headquarters– Mumbai, Maharashtra
Formation– 1 April 1935
Governor– Shaktikanta Das
Deputy Governors– 4 (Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra, and M Rajeswar Rao)