Here is the rewritten article in Markdown format:
Know Your Customer: A Regulatory Requirement in Nepal
The Nepal Rastra Bank (NRB) has issued guidelines for banks to follow a ‘Know Your Customer’ (KYC) policy, requiring them to obtain certain personal information from account-opening prospects or customers. The objective of KYC is to enable banks to have true identification of their customers, safeguarding their hard-earned money.
What are the KYC Requirements?
According to the NRB’s guidelines, banks are mandated to collect specific documents from customers, including:
- Photograph
- Proof of identity
- Proof of address
Kumari Bank Limited has framed its KYC procedure accordingly. The bank requires a photograph and documentary proof of personal identification and address proof for account opening.
Why is KYC Important?
KYC enables banks to know and understand their customers, allowing them to serve them better. The identification of a customer is crucial to prevent fraudsters from using false identities and addresses to undertake illegal activities.
Why does the bank ask for proof of identity and address?
The bank asks for proof of identity and address to protect customer interests by preventing fraud and to safeguard against money laundering and terrorist financing.
Are KYC Requirements New?
No, KYC requirements have been in place since 2008. Banks have been taking KYC documents in accordance with NRB guidelines from time to time.
Is KYC Mandatory?
Yes, it is a regulatory and legal requirement. The revised guidelines issued by the NRB on February 27, 2012, require all banks to put in place a comprehensive policy framework covering KYC standards and anti-money laundering measures.
When does KYC Apply?
KYC will be carried out at various stages, including:
- Opening a new account
- Updating customer information
- When there are changes in customer relationships
What Proof of Identity will you need?
The best identification documents are those issued by a government authority, which should have a photograph, address, and signature. The bank staff can help provide details on approved documents.
What will happen if you do not provide the required KYC information/documents to the bank?
The bank will be entitled to refuse to open an account or discontinue its relationship with you citing non-providing of KYC information/documents.
Help us to Help You
Please help prevent crime, tax evasion, and money laundering by being patient when staff asks for documents to prove your identity. You can also help prevent crime against yourself and others by maintaining the confidentiality of your account details and identity documents.
Additional Resources
- US Patriot Act Certificate
- KBL Anti-Money Laundering Policy Statement
- W-8BEN-E