The Reserve Bank of India (RBI) has issued the Know Your Customer (KYC) (Amendment) Directions, 2025, introducing key changes to simplify and strengthen the KYC process for individual customers. The amended directions aim to improve customer service, ensure uninterrupted banking access, and promote financial inclusion.
One of the major changes allows low-risk individual customers to continue all banking transactions even if their KYC update is pending. Regulated Entities (REs) must ensure KYC is completed within one year of the due date or by June 30, 2026, whichever is later. This ensures continued access to banking services for customers with no history of suspicious transactions.
To extend outreach, especially in rural areas, banks can now use Business Correspondents (BCs) for collecting self-declarations and supporting KYC documents. These can be submitted electronically after biometric e-KYC authentication or in physical form until digital facilities are ready.
Further, REs must send three advance notices and three post-due reminders, including at least one physical letter in each phase, to prompt KYC updates.
All communications must be recorded for audit. RBI has set a compliance deadline of January 1, 2026, for full implementation.
