Please refer to paragraph (5) of Prudential Regulation M1 which requires banks / DFIs to obtain ‘Introduction’ on the new account with the view to assess the integrity, respectability and the nature of business etc. of the prospective customers.
The matter has been examined in the backdrop of enhanced scrutiny of customers’ identity, integrity, profession and sources of income etc. under Know Your Customer and Customer Due Diligence (KYC/ CDD) framework and observed that completion of the requirements under KYC/ CDD in letter and spirit provides sufficient information about prospective customer. The requirement of obtaining references etc in the form of introduction of existing accountholder or employees of the bank is not serving any useful purpose.

Therefore, paragraph (5) of the PR- M1 is omitted with immediate effect. However, banks/ DFIs are advised to ensure meticulous compliance of all other KYC/ CDD requirements under the Prudential Regulations.

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