A Way To Open New Bank Account Without Valid KYC Documents

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I’ll confess, the first time I ever felt a sense of maturity or that adulthood had just begun was when I went to open a new bank account for myself. It was a normal savings account and my parents used to give me pocket money and it was up to me to decide whether I wanted to deposit it or not. That’s when I learnt the basic intricacies of banking.

Taking one step back, when I went to the bank to open a new bank account, I remember filling up some forms with all my details, which were followed by submitting self-attested copies of my id proof, PAN card and other documents. Today, the entire hassle of going to the bank, writing out all your details and signing documents has all been done away with and can now be done on our mobiles with just a few taps.

But to open a new bank account online, some documents are mandatory without which you cannot open one. But, there is an exception to this under special circumstances. Let’s find out.

First, the standard procedure for opening an account offline

Here’s a refresher on the current offline process in case you weren’t aware

  • Decide the type of account and bank - With a list of banks and financial institutions available, you can choose your bank and account with the variety of features each of them have to offer.
  • Fill up all the forms - After finalising your bank, you can visit the nearest branch and the bank employee will hand out the proposal form which you will need to fill out all your details and submit your KYC details like a PAN card, Aadhaar card and a passport size photograph.
  • Submit all the filled details - Ensure all your details are correct and filled out in the correct sections and the necessary documents needed to open your account. Here’s a list of documents commonly needed
  1. Completed application form
  2. Passport size photo
  3. Initial deposit amount
  4. Copy of AADHAR card, ration card, pan card, proof of address
  • Verification and confirmation - The concerned bank officer will then verify all the details submitted and post-confirmation, the account will be created and you will then be issued a debit card, cheque book and passbook.

Now, let’s take a look at the simple online account opening process:

Step 1 - Visit the official website of the financial institution or download the mobile app.

Step 2 - Select the account you want to open (Savings account, current account etc.)

Step 3 - Upload all your KYC documents in the sections provided

Step 4 - Cross check all your details and click on the “Submit” button 

Step 5 - Once the bank approves your details, you will receive an email confirming the opening of your account. If you aren't clear about opening an online bank account, check out this step-by-step guide.

Ways in which you can open a new bank account without KYC

Given that you can’t open a new bank account online or offline without KYC documents, there are certain exceptions to this rule. The RBI issued a circular in 2014 addressing these concerns.

  • Small accounts - 

For those who do not have official documents can open small accounts. These accounts can be opened on the basis of self-attested photographs and the signature of the holder in the presence of a bank official. But such accounts come with limitations. The account will be valid for 12 months and can be extended for another 12 months only if the account holder can prove that they have applied for official documents within 12 months from the date of opening the small account.

  • Low-risk customers - 

Official documents need not be required if the bank categorises the customer as a low-risk customer to open an account. The following document needs to be furnished at the time of opening.

  1. ID card with applicant's photo issued by central/state government, PSU, scheduled commercial banks, public financial institutions and statutory/regulatory authorities
  2. Letter issued by a gazetted officer with the attested photo of the person 
  • KYC verification of members of Self Help Groups (SHGs) is not required while opening an account of the SHG and only the KYC documents of the SHG official are needed.

Limitations of having a small account

Though the KYC documents criteria are relaxed in the case of small accounts, it comes with certain limitations

  1. The total credits should not cross ₹1,00,000 in a year
  2. The total transfer and withdrawal should not cross ₹10,000 in a month
  3. The balance at any point in time should not cross ₹50,000
  4. Transfer of foreign cannot be done in a small account

The final word

The RBI has made the process of updating KYC with banks a lot easier especially during the course of the pandemic when visiting a branch was next to impossible

While it is possible to open accounts without KYC documents, these are very rare exceptions that we come across and are more or less converted to a full savings account in due course. In fact, the process to open a new bank account without KYC is more cumbersome. With the facilities and systems in place, It’s better to get your KYC documents done before you open a new bank account online.

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