Cuttack, June 15: There is a need to simplify the strict know your customer (KYC) regulations to make banking manageable for bankers and simpler for customers, Reserve Bank of India (RBI) executive director B. Mohapatra said here yesterday.

“But to make banking simpler for the common man, bankers need to go an extra mile by being innovative in ascertaining customer identification,” Mohapatra said at a meeting on KYC for customers and depositors at Pramod Convention here.

According to the KYC guidelines, there are two aspects of customer identification – one is establishing the identity and other is establishing the present residential address of the customer.

He said making banking simpler for customers was imperative, but it should not be done “at the cost of compromising with the integrity of the banking system”.

The RBI executive director said the KYC regulations were aimed at preventing banks from being used by criminal elements for money laundering or terrorist financing activities.

KYC procedures also enable banks to understand their customers and their financial dealings better and manage their risks prudently.

During the meeting, he clarified on many grievances related to areas such as documentary proof of identity and address and opening of accounts by a customer of low-income group in case of non-compliance of the KYC norms.

According to the KYC norms for opening of an account in a bank, customers need either telephone or electricity bill as a proof of their identity.