Additional Proof for opening Bank account of salaried employees


In a notification dated October 26, 2010 addressed to banks, the Reserve Bank of India has directed banks to obtain additional proof in cases where accounts are opened for salaried . The Notification clarifies and adds that for opening bank accounts of salaried employees,"some banks rely on a certificate/letter issued by the employer as the only KYC document for the purposes of certification of identity as well as address proof. Such a practice is open to misuse and fraught with risk.

In a notification dated October 26, 2010 addressed to banks, the Reserve Bank of India has directed banks to obtain additional proof in cases where accounts are opened for salaried employees.

The Notification clarifies and adds that for opening bank accounts of salaried employees,"some banks rely on a certificate/letter issued by the employer as the only KYC document for the purposes of certification of identity as well as address proof. Such a practice is open to misuse and fraught with risk. It is, therefore, clarified that with a view to containing the risk of fraud banks need to rely on such certification only from corporates and other entities of repute and should be aware of the competent authority designated by the concerned employer to issue such certificate/letter."

Banks should, in addition to the certificate from employer, also insist on at least one of the officially valid documents, as provided in the Prevention of Money Laundering Rules (viz passport, driving licence, PAN Card, Voter's Identity card etc) or utility bills for KYC purposes for opening bank account of salaried employees of corporates and other entities.


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