RBI notifies amendments to Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016

The Reserve Bank of India (“RBI”) has recently notified amendments to Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 (KYC Master Direction) vide Reserve Bank of India (Know Your Customer (KYC)) (Amendment) Directions, 2025 dated June 12, 2025 (Amendment Directions). Further, the RBI has also published revised instructions on customer onboarding and updation / periodic updation of customers’ KYC in order to ease the process for customer convenience (Revised KYC Instructions).

The key aspects under the Amendment Directions and Revised KYC Instructions include inter alia the following:

• Key Aspects under the Amendment Directions:
  • KYC Update Deadline Extended for Low-Risk Customers

A new clause before Paragraph 38(a) has been inserted, which provides that – In respect of an individual customer who is categorized as low risk, RE shall allow all transactions and ensure the updation of KYC within one year of its falling due for KYC or upto June 30, 2026, whichever is later. The RE shall subject accounts of such customers to regular monitoring. This shall also be applicable to low-risk individual customers for whom periodic updation of KYC has already fallen due.

• • Banks to use Business Correspondents for KYC Updates and Self-Declarations

A new Paragraph 38(a)(iia) has been inserted after Paragraph 38(a)(ii) of the KYC Master Direction, on the use of Business Correspondent (BC) by banks for updation / periodic updation of KYC. It states that, Self-declaration from the customer in case of no change in KYC information or change only in the address details may be obtained through an authorized BC of the bank. In such case, after successful biometric based e-KYC authentication, the bank shall obtain the self-declaration including the supporting documents, if required, from the customer through the BC. Further, a bank may enable its BC systems for recording these self-declarations and supporting documents thereof in electronic form in the bank’s systems. In case such an option is not available in the electronic mode and such declaration is submitted in physical form by the customer, the BC shall authenticate the self-declaration and supporting documents submitted in person by the customer, and promptly forward the same to the concerned bank branch. The BC shall provide the customer an acknowledgment of receipt of such declaration /submission of documents. The bank branch shall update the customer’s KYC records and intimate the customer once the records get updated in the system, as required under paragraph 38(c) of the KYC Master Direction. It has further been reiterated that the ultimate responsibility for periodic updation of KYC remains with the bank.

• • Due Notices for Periodic KYC Updates by RE

Paragraph 38(e) has been inserted in the KYC Master Direction on the due notices for periodic updation of KYC. It states that the RE shall intimate its customers, in advance, to update their KYC. Prior to due date of periodic updation of KYC, RE shall give at least three advance intimations, including at least one intimation by letter, at appropriate intervals to its customers through available communication options/ channels for complying with the requirement of periodic updation of KYC. Subsequent to the due date, RE shall give at least three reminders, including at least one reminder by letter, at appropriate intervals, to such customers who have still not complied with the requirements, despite advance intimations. The letter of intimation/ reminder may, inter alia, contain easy to understand instructions for updating KYC, escalation mechanism for seeking help, if required, and the consequences, if any, of failure to update their KYC in time. Further, the issue of such advance intimation/ reminder shall be duly recorded in the RE’s system.

• Key Aspects under the Revised KYC Instructions:

The KYC Master Direction instructs the Regulated Entities (REs), including banks, that the customers’ KYC identifier shall be the first reference point for the purpose of establishing an account-based relationship or for verification of identity of customers. Accordingly, while onboarding customers, the REs access the customers’ KYC records online from the Central KYC Records Registry (CKYCR) with the customer’s consent without requiring him/ her to submit the same records again, unless there is a change in records available with CKYCR.

The processes of onboarding customer and updation/ periodic updation of KYC have been simplified pursuant to the Revised KYC Instructions, and include inter alia the following:

• • Face-to-face mode for onboarding the customer

Customers may be onboarded in face-to-face mode through Aadhaar biometric based e-KYC authenticating, and, in such case, if customer wants to provide a current address, different from the address as per the identity information available in the UIDAI database (i.e., Central Identities Data Repository), he may give a self-declaration to that effect to the RE. Further, digital KYC process is also allowed for customer onboarding.

• • Non-face-to-face (NFTF) modes for onboarding the customer

Consent-based onboarding of customer in NFTF mode may be done using Aadhaar OTP based e-KYC authentication which is subject to certain conditions. Further, such account shall be placed under strict monitoring, and the procedure of customer due diligence (CDD) shall be completed within a year. Customer onboarding in NFTF mode using digital modes such as KYC Identifier, equivalent e-documents, documents issued through DigiLocker, and non-digital modes such as obtaining copy of OVD certified by additional certifying authorities as allowed for NRIs and PIOs are subject to certain conditions

• • Simplified process of updation and periodic updation of KYC:

REs are allowed to obtain self-declaration regarding “no change in KYC information” or “a change only in address details” from customers using digital and non-digital modes, through customer’s email / mobile number registered with the RE, ATMs, digital channels (such as online banking / internet banking, mobile application of RE), letter, BCs, etc. Further, the updation/ periodic updation of KYC records are allowed to be carried out at any branch of the RE with which customer maintains the account.

For more details, kindly refer to the notifications published by the RBI, made available by clicking on these links – link (Amendment Directions) and link (Revised KYC Instructions).