RBI Revises KYC Norms to Ensure Periodic Updation

The Reserve Bank of India has issued a few circulars simplifying the Know Your Customer (KYC) updation procedures to enable timely compliance. A large pendency in periodic updating of KYC was observed in accounts opened for credit of Direct Benefit Transfer (DBT)/Electronic Benefit Transfer (EBT) under government schemes to facilitate credit of DBTs and/or scholarship amounts (DBT/EBT/scholarship beneficiaries) and accounts opened under PMJDY. To mitigate this, KYC norms have been amended.

Firstly, the Know Your Customer (KYC)) (Amendment) Directions, 2025, have been issued to amend the KYC Master Directions, i.e., Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016. The changes made to the directions are:

• Individual Low Risk Customers: Individual customers categorized as low risk shall be allowed all transactions and updating of KYC within one year of its falling due or up to June 30, 2026, whichever is later. 
• Business Correspondent (BC) to Assist KYC Updation: Bank authorised BC may obtain self-declaration from customers in case of no change in KYC information or change only in the address details. Bank shall enable its BC systems for recording these self-declarations electronically through biometric-based e-KYC authentication. Till then, the physical form must be submitted to the BC.
• Due Notice: At least three advance intimations, including at least one intimation by letter, at appropriate intervals must be provided to customers through available communication options. Subsequent to the due date, at least three reminders are to be given.

In addition, instructions have also been issued to all Regulated Entities to allow BCs to facilitate the process of KYC updation and advise them to organize camps and launch intensive campaigns, focusing on periodic updation of KYC, especially in rural and semi-urban branches and the branches having large pendency in periodic updation of KYC. A compilation of instructions was also shared for ready reference, highlighting the following modes of onboarding customers and updating KYC:

• Face-to-face mode: Through Aadhaar biometric-based e-KYC and digital KYC.
• Non-face-to-face (NFTF) mode: Aadhaar OTP-based e-KYC authentication and digital modes such as KYC Identifier, equivalent e-documents, documents issued through DigiLocker and copies of OVD certified by additional certifying authorities.
• Customer onboarding using Video based Customer Identification Process (V-CIP): Audiovisual interaction by an authorised official of the RE.
• Simplified process of updation and periodic updation of KYC: Self-declaration from customers using digital and non-digital modes through registered email/mobile number.

Further, similar changes have also been made pertaining to inoperative accounts and unclaimed deposits through Inoperative Accounts/Unclaimed Deposits in Banks—Revised Instructions (Amendment) 2025. The instructions mandate the availability of KYC updation facilities for the activation of inoperative accounts and unclaimed deposits at all branches. Video-Customer Identification Process (V-CIP) facilities and services of an authorised BC must also be provided.