The Reserve Bank of India (RBI) has notified: “As regards non-compliance of KYC (Know Your Customer) requirements by the customers despite repeated reminders by banks, it has been decided that banks should impose ‘partial freezing’ on such KYC non-compliant in a phased manner.”
While imposing ‘partial freezing’, RBI said banks are advised to ensure that the option is exercised after giving due notice of three months to the customers, initially, and followed by a reminder for further period of three months. “Thereafter, banks may impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts… If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’ banks may disallow all debits and credits from/to the accounts, rendering them inoperative,” RBI’s notification said.
RBI added that it would “always be open to the bank to close” the account of such customers.
Meanwhile, account-holders can revive accounts by submitting the KYC documents as per the instructions in force.