“The provisions introduced by the central bank would not apply on accountholders who have deposits of less than Rs 500,000 in banks and financial institutions,” the central bank said in a directive issued on Friday. "But banks and financial institutions can ask for any document from customers if need be."[break]
Earlier in February 2012, when NRB first issued a directive on ´know your customers´, the regulator made it mandatory for those opening bank accounts to submit citizenship copies of family members spanning three generations.
The measure - aimed at keeping a tab on unusual or suspicious transactions that aids financial crimes like money laundering and terror financing - was criticized by many financial institutions as being unpractical, as they said it would discourage people to open accounts.
Following this, the regulator revised its provision and said customers opening bank accounts should only provide citizenship numbers of their family members like husband or wife, father, mother, grandfather, grandmother, son, daughter, daughter-in-law and father-in-law.
It also said these numbers can be submitted at a later date, if they are not available at the time of opening an account at banks and financial institutions.
The latest provision is expected to provide some relief to both customers and financial institutions, which were complaining about rampant closure of bank accounts.
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