Omicron spread: RBI extends deadline for periodic KYC update by 3 months


The Reserve Bank of India (RBI) on Thursday extended the deadline to enforce periodic Know Your Customer (KYC) update in banks by three months, till March 31, 2022. The deadline was ending today.

The central bank said in a circular that the decision has been taken in view of the prevalent uncertainty due to new variant of Covid-19. The new variant Omicron has so far infected more than 900 people in India.

In May, the RBI had extended the periodic KYC deadline to December 31 and directed banks and other financial institutions to not place any restrictions on operations of such accounts. The directions were given during the peak of the second wave of the coronavirus disease (Covid-19) which was led by the Delta variant.

In the latest edition of Financial Stability Report (FSR), released on Wednesday, the RBI said that inflation and Omicron pose major challenges to the Indian economy.

The report carried a Systemic Risk Survey (SRS), which perceived all broad categories of risks to the financial system – global; macroeconomic; financial market; institutional; and general – as ‘medium’ in magnitude, but rated higher the risks arising on account of global and financial markets.

“Commodity prices, domestic inflation, equity price volatility, asset quality deterioration, credit growth and cyber disruptions were rated as the major risks,” according to the 24th issue of the FSR.

The central bank noted that the global economic recovery has been losing momentum in the second half of 2021 in the face of resurfacing Covid-19 infections, the new variant Omicron, supply disruptions and bottlenecks, elevated inflationary levels and shifts in monetary policy stances and actions across advanced economies and emerging market economies.

The FSR is published bi-annually and includes contributions from all the financial sector regulators. Accordingly, it reflects the collective assessment of the sub-committee of the Financial Stability and Development Council (FSDC-SC) on risks to financial stability.

(With inputs from agencies)



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