General Studies · KYC Norms & Operation of Accounts
A customer visits a bank branch to open a current account for his sole proprietorship firm. He provides his officially valid identity proof documents and PAN. For the business address proof, he provides a utility bill in his father's name, a notarized rent agreement, and a valid GST registration certificate in the name of the firm. According to RBI's Know Your Customer (KYC) guidelines for proprietorship firms, how should the bank officer handle this onboarding request?
- 1Open the account but put a regulatory freeze on all cash transactions for the first six months.
- 2Accept the documents as they are and categorize the account as 'Low Risk' to process onboarding.
- 3Reject the utility bill and notarized agreement as valid address proof since they are not in the name of the firm or proprietor, and insist on a registered lease deed or a utility bill directly in the name of the firm/proprietor.✓
- 4Accept the GST certificate as the sole proof of business and open the account immediately.
Correct answer
Reject the utility bill and notarized agreement as valid address proof since they are not in the name of the firm or proprietor, and insist on a registered lease deed or a utility bill directly in the name of the firm/proprietor.
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