The Reserve Bank of India, RBI, has relaxed the Know Your Customer (KYC) norms for Non-Banking Financial Companies (NBFC) and allowed sole proprietor firms to open accounts in co-operative banks by submitting a single proof of their business.
The KYC norms were relaxed for NBFC’s due to practical difficulties. The Apex bank in a communication to urban, state and central co-operative banks said in cases where the banks are satisfied that it is not possible to furnish two such documents, they would have the discretion to accept only one of those documents as activity proof. Earlier, they were required to submit two such documents.
The RBI decision has come after being told that such firms were facing difficulties with regard to furnishing two documents as business activity proof while opening accounts of sole proprietary firms in certain cases.