Identity and Residence Proof

• Introduction is the process by means of which banks satisfy themselves that the applicant is a genuine (not fictitious or benami) person of certain standing and known through the bank’s existing client.

• Such introduction and verification ensures that the bank will get the protection which the provisions of the Negotiable Instruments Act, 1 881 - an Act governing the cheques - confer to all acts done ‘in good faith and without negligence’ in relation to the account holder. Opening an account without proper introduction would not confer such a protection to the banker and such banker may be held liable for loss caused to others by a customer depositing forged or stolen cheques in his account and withdrawing the proceeds.

• As per existing guidelines, issued by Reserve Bank of India, all banks have to obtain acceptable direct proof of the identity of the person (e.g. passport, driving license, voter’s ID card, Income Tax PAN Card), proof of the customer’s residential address (ration card, house owner/lease receipt, society letter) and keep attested photo copies of these documents along with the account opening form. These documents would establish the correct identity and residence of the person and would obviate the need for further enquiries. The procedure would also prevent ‘benami’ deposits or other transactions by undesirable social elements.