Banks will now be required to update KYC data only once in two years for high risk entities, and just once in 10 years for low-risk clients, RBI said today. 

"The issue has been reviewed in the light of practical difficulties/constraints expressed by bankers/customers in obtaining/submitting fresh KYC documents at frequent intervals as the relative documents submitted earlier specially by low- risk customers have remained unchanged in most of the accounts," the Reserve Bank said in a notification. 

RBI has asked banks to exercise full KYC procedure at least every two years for high risk individuals and entities, from the earlier directive of not less than once in two years. 

For low risk individuals and entities, the KYC data updation has been relaxed to at least every 10 years from the requirement of not less than once in five years earlier. 

For medium risk individuals and entities it has been relaxed to at least every eight years, from not less than once in two years. 

It said however that banks may continue carrying out on-going due diligence with respect to business relationship with every client. 

Also, banks should closely examine transactions to ensure its consistency with their knowledge of the client, about their business and risk profile and, wherever necessary, the source of funds. 

RBI further asked banks that positive confirmation regarding KYC norms through e-mail, letter, telephonic conversation and so on will be required to be completed at least every two years for medium risk and at least every three years for low risk individuals and entities. 

Besides, it said banks will be required to get fresh photographs from minor customer on becoming major. 

"Banks may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same," it said. (Economic Times)