Banking made simple
New regulations have ensured that documentation required to open a bank account is simplified, reports Arnav Pandya.Updated: Apr 01, 2008 23:09 IST
A lot of people have been at the receiving end of a never-ending list of requirements that the bank asks for when opening bank accounts. Know your client (KYC) requirements call for the production of various proofs and many people are unable to provide adequate documents in their name.
The problem arises when a requirement to open a bank account calls or the presence of some proof of a permanent address. This includes utility bills or other documents where there is a clear address given that matches with the address given on the account opening form of the bank. People like housewives or parents of a person who do not have such a proof are often unable to provide the necessary documents resulting in the process stalling. These are the ones who will now benefit under the new conditions.
The new instructions say that the bank must now accept a utility bill or other identity document of the relative with whom a person is staying. This eliminates a major problem for those who do not have the documents because they are able to give some proof that will help them continuing in the process. A letter from the relative saying the person who is applying is staying with him or her is a must while giving this proof. Both these things together will be enough for the person to get into the formal banking system by opening a bank account.
Many banks also need supplementary proofs along with the actual papers. To produce such a proof however, is not a tough task. Here the person can ensure that something like a letter containing the address that is received by them is sufficient enough. This will confirm that the address proof provided by them is the correct one. This makes the process simpler for the individual because such letters or some similar proof is normally available and acceptable as supplementary evidence.
This will ensure that people like spouses or even aged parents are able to open the required bank accounts and deal with their transactions in a proper manner. It enables better utilisation of the facilities bringing a larger number of people under the coverage of formal banking channels.
(The author is a certified financial planner)