General Studies · KYC Guidelines and RBI Master Directions
A customer wants to open a 'Small Account' under the Prevention of Money Laundering Rules. The customer does not possess any Officially Valid Documents (OVDs). According to RBI's Master Direction on KYC, which of the following sets of operational limits strictly applies to such an account?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Small accounts can only be opened at specialized micro-finance branches with a mandatory introduction from an existing account holder of at least five years.
- 2Initial operational period is 24 months, extendable by another 12 months on showing proof of OVD application.
- 3Total credits in a financial year ≤ ₹2 lakh; total withdrawals and transfers in a month ≤ ₹20,000; balance at any point ≤ ₹1 lakh.
- 4Total credits in a financial year ≤ ₹1 lakh; total withdrawals and transfers in a month ≤ ₹10,000; balance at any point ≤ ₹50,000.✓
Correct answer
Total credits in a financial year ≤ ₹1 lakh; total withdrawals and transfers in a month ≤ ₹10,000; balance at any point ≤ ₹50,000.
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