Adopt risk-based approach for periodic updation of KYC: RBI asks banks

The Reserve Bank on Tuesday tightened the customer due diligence (CDD) norms by asking banks and regulated entities to adopt a risk-based approach for periodic updation of KYC.
After a review, the central bank has made amendments to the Master Direction (MD) on Know Your Customer (KYC).
Regulated Entities (REs) have to undertake customer due diligence (CDD) as per the process for their customers.
The amendments follow the latest government instructions related to the Prevention of Money-Laundering Rules, Unlawful Activities (Prevention) Act (UAPA), and Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act.
The Reserve Bank said it has also updated certain instructions in accordance with the FATF recommendations.
The latest Master Directions said the risk-based approach for periodic updation of KYC has been amended to be read as: “REs shall adopt a risk-based approach for periodic updation of KYC ensuring that the information or data collec