The country is facing one of the worst financial turmoils, seen in decades. Many have lost their jobs, and many are finding it challenging to manage their finances. We all are facing the uncertainty that is constantly challenging our ability to make financial decisions. Owing to the restrictions of Covid-19, many banks and financial service providers are doing their best to aid their consumers. RBI’s recent tactic is one of the simplest yet effective, in my opinion. It’s good news, not just for individuals but also for businesses.

The Reserve Bank of India’s governor Shaktikanta Das has instructed all the banks and financial institutions to refrain from taking any punitive measures on customers who fail to update their KYC till December 31, 2021. The RBI has also decided to make provisions of video KYC or V-CIP (Video-based Customer Identification Process) available to an extensive range of customers that include proprietorship firms, authorised signatories, and beneficial owners of legal entities.

Das said, “Keeping in view the Covid-related restrictions in various parts of the country, regulated entities are being advised that for the customer accounts where periodic KYC updating is due or pending, no exorbitant restriction on operations of customer account(s) shall be imposed till December 31, 2021.”

The second wave of the pandemic has hit us hard, and no one should face stringent action that will halt access to financial services in these times of economic crisis. Privileges extended by RBI like video-based KYC is another great option to update your KYC from the convenience of your own home. Stepping outside should be prevented as much as possible, and I think RBI has taken just the right step to ease the financial burden by relaxing the KYC norms. We all know there is no assurance of when this crisis will come to an end. I admire RBI, for rightly extending the time period until December 31. ‘Battle readiness’ for the upcoming challenges is a must, and even the smallest of measures by the governing bodies are largely beneficial for the nation.

I am sure that this step by RBI will ensure that the financial services are accessible to each and every individual and business in need, to survive the second wave and be prepared for what is coming next. The country’s economy, the bread and butter of every citizen in India is dependent on the smooth functioning of financial markets. The extended scope of V-CIP or video-KYC services makes sure that every business, proprietorship firm, or authorised signatories have continued access to the required financial assistance.

Additionally, the RBI governor has also promised that the Central Bank will be proactive to take necessary measures to deal with challenges brought on by the second wave. The year that lies ahead of us is a crucial one in fighting the Covid-19 crisis. Banks and financial institutions (FIs) should be battle-ready and give as much value to their customers as possible. I strongly feel the use of digital banking should be encouraged for safety purposes. Features like V-CIP play a vital role in opening new bank accounts or accessing other banking services digitally. The relaxation of KYC norms is a great way to lift the financial burden off the market and individuals so let us make the most of it.

The author is MD and CEO, Celusion Technologies

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.