By Admin 
Bank KYC: If your account is in government bank Canara Bank, then this news is for you only. Reserve Bank of India has imposed a fine of Rs 41.80 lakh on Canara Bank for not following KYC rules. However, this will not affect the money or deposits of bank customers, but this matter has come into discussion regarding the compliance of banking rules.
Why did RBI impose penalty?
RBI investigation found that the bank did not upload the KYC records of some customers to the Central KYC Records Registry on time. Apart from this, some accounts were wrongly put in the inoperative category, even though transactions had taken place in those accounts. RBI considered these shortcomings as a violation of rules.
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Do customers need to panic?
No. The penalty imposed by RBI is due to deficiencies found in the functioning of the bank. This will not have any direct impact on customers’ deposits, savings accounts, FDs or other banking services. The operation of the bank will continue as before.
Why is KYC so important?
KYC means verifying the identity and address of the customer. Through this, banks ensure that the account is not used for any wrong or illegal activity. For this reason, from time to time banks ask customers to update documents related to Aadhar card, PAN card, mobile number and address.
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What if KYC is not updated?
If KYC is not updated for a long time, the bank may restrict some services. In many cases, transactions from the account may be limited or the bank may ask the customer to submit documents again. Therefore, if you receive a message or call for KYC update from the bank, it should not be ignored.
Why is RBI taking strict action?
In the last few years, RBI has shown great strictness regarding KYC rules. Many banks and financial institutions have been fined for violating the rules. RBI believes that a strong KYC system helps in preventing fake accounts, money laundering and financial fraud.