What changed
RBI clarified that banks cannot insist on opening fresh accounts or repeating full KYC when customers transfer accounts within the same bank. Since most branches are on CBS and can access KYC records, the initial KYC remains valid for intra-bank transfers. Only a fresh address proof is required from the customer at the transferee branch.
What it means for you
Banks must streamline their account transfer processes to avoid customer inconvenience and poor service ratings. This reduces operational friction and aligns with digital banking capabilities. However, periodic KYC updation and record maintenance requirements remain unchanged, so banks must still comply with those timelines.
What you must do
- Update internal SOPs to allow account transfers without reopening or full KYC re-verification.
- Train branch staff to accept existing KYC records from CBS and only request fresh address proof on transfer.
- Ensure CBS access is enabled for all branches to retrieve customer KYC data seamlessly.
- Maintain compliance with periodic KYC updation and record-keeping as per existing master circulars.
Who it affects
All scheduled commercial banks (excluding RRBs), Local area banks, Branch operations and customer service teams, KYC and compliance departments
Can a customer transfer their account to any branch without any documentation?
No, the transferee branch must obtain fresh address proof from the customer to comply with KYC address requirements. However, full KYC re-verification is not needed.
Does this circular change the periodic KYC updation requirements?
No, the instructions on periodic updation of KYC data and maintenance of records remain unchanged. Banks must still follow the prescribed intervals and record-keeping rules.