RBI/2004/ 195 DBOD.AML.BC.NO.83/ 14.01.001/ 2003-2004
May 12, 2004
To
The Chief Executives of all Commercial
Banks (excluding RRBs)
Dear Sir,
Customer information
Please refer to our circular DBOD.AML.BC.18
/ 14.01.001/ 2002-2003 dated 16th August 2002 on ' Know Your Customer
' (KYC) stipulating collection of certain information by banks while
opening accounts of the customers. While complying with the above requirements,
banks also collect a lot of additional personal information.
2. The Committee on Procedures
and Performances Audit on Public Services (Chairman: Shri S.S.Tarapore) has
observed that the information collected from the customer is being used for
cross selling of services of various products by banks, their subsidiaries and
affiliates. Sometimes, such information is also provided to other agencies.
As banks are aware, the information provided by the customer for KYC compliance
while opening an account is confidential and divulging any details thereof for
cross selling or any other purpose would be in breach of customer confidentiality
obligations. Banks are, therefore, advised to instruct all the branches to strictly
ensure compliance with their obligations to the customer in this regard.
3. Wherever banks desire to
collect any information about the customer for a purpose other than KYC requirements,
it should not form part of the account opening form. Such information may be
collected separately, purely on a voluntary basis, after explaining the objectives
to the customer and taking his express approval for the specific uses to which
such information could be put.
4. Banks are advised to get
their existing practices in this regard examined by the Ad hoc Committee/ Board,
issue suitable instructions to their branches and ensure compliance.
Yours faithfully,
(Prashant Saran)
Chief General Manager
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