The Hindu Business Line : RBI issues customer guidelines for NBFCs

THE Reserve Bank of India on Tuesday issued ``know your customer (KYC)'' guidelines for non-banking financial companies (NBFCs), similar to those existing for commercial banks.

The `Know Your Customer' framework is meant to work with two objectives — (i) to ensure customer identification and verifying his identity and residential address and (ii) to monitor transactions of a suspicious nature.

The NBFCs have been asked to complete the identification process in respect of the existing customers by June 30, 2004.

The board of directors of NBFCs have been advised to formulate policies and procedures to operationalise and ensure the observance of these guidelines, which come into immediate effect, in respect of all new customers, said a press release from the central bank.

The guidelines would be applicable to all NBFCs, including Miscellaneous Non-Banking Companies (chit fund companies) and Residuary Non-Banking Companies, said the RBI.

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