The Reserve Bank of India Thursday said banks can use their authorised business correspondents to activate inoperative accounts. The central bank notified revised norms on inoperative accounts and unclaimed deposits in banks on Thursday, which are effective immediately.

The authorised correspondents have to adhere to know-your-customer norms, also notified Thursday. Self-declarations for no change in KYC information or change in only the address may be done with business correspondents, the RBI said. The bank must obtain supporting documents and the self declaration electronically or through a physical form, through the business correspondent.  

Correspondents will be responsible for authenticating the self-declaration and supporting documents, and sending them to the bank branch. The correspondents must also give the customer an acknowledgement of the declared or submitted documents. Ultimately, the bank must notify the customer when the KYC details are updated, and periodic updation is the bank's responsibility, the RBI said.  

The RBI also changed its wording around the video - customer identification process while activating inoperative accounts. The central bank said banks have to endeavour to provide the facility of KYC updation through video mode, in line with extant norms. Earlier, the RBI's regulations allowed updation through the video mode, but at the request of the customer and only if the bank offered the service. 

Banks asked to give due notices  for periodic KYC update 

RBI on Thursday asked banks and other regulated entities to give due notices to their customers for periodic updation of Know Your Customer (KYC) with a view to enhance consumer protection as well as service. In a circular, the RBI said it has observed a large pendency in periodic updation of KYC, including in the accounts opened for credit of Direct Benefit Transfer (DBT)/ Electronic Benefit Transfer (EBT) under government schemes to facilitate credit of DBTs and/or scholarship amount (DBT/EBT/scholarship beneficiaries) and accounts opened under PMJDY.