RBI’s New KYC Guidelines 2025: Extended Deadline, Easier Process for Low-Risk Customers

The Reserve Bank of India (RBI) has announced major changes to its KYC (Know Your Customer) process through the KYC (Amendment) Directions, 2025, providing greater convenience to both banks and their customers. One of the key highlights is that low-risk individual customers can continue to make transactions even if their KYC is pending—until June 30, 2026, or one year from the due date, whichever is later.

RBI Eases KYC Rules for Low-Risk Customers

The latest amendments bring significant relief to low-risk individual account holders. According to the RBI, regulated entities (REs), including banks, must allow such customers to carry out all financial transactions, even if their KYC is not updated.

These individuals now have an extended window—up to one year from their original KYC due date or till June 30, 2026, whichever is later—to complete the update.

Meanwhile, regular monitoring of these accounts will continue as a safeguard.

Business Correspondents Can Assist with KYC Collection

To improve accessibility and streamline the process, RBI has permitted banks to use Business Correspondents (BCs) to collect KYC information. This is especially beneficial in rural or remote areas where visiting a branch may be difficult.

Here’s how it will work:

• BCs can gather customer self-declarations electronically if biometric e-KYC is possible.
• Alternatively, they can accept physical KYC forms on a temporary basis.
• Once the information is collected, BCs must verify and submit it to the respective bank.
• The bank remains fully responsible for verifying the KYC and notifying the customer once the update is complete.

Mandatory KYC Reminders from Banks

To ensure timely compliance, the RBI has made it mandatory for banks and other regulated entities to implement a structured reminder system:

• Customers must receive at least three reminders before or after their KYC due date.
• These reminders must be sent through various communication channels, including SMS, email, letters, and postal services.
• If the KYC remains pending after the initial set, another round of three reminders must be issued.
• Each communication must include:
• Simple and clear update instructions
• Support contact details
• Consequences of not updating KYC
• Banks are required to maintain records of all reminder communications for audit purposes.
• This reminder system must be operational by January 1, 2026.

Read More: Flipkart Gets RBI Nod for NBFC Licence, Set to Launch Direct Lending.

Conclusion

The RBI’s revised KYC norms aim to strike a balance between regulatory compliance and customer convenience. By extending the update deadline and allowing BC-led data collection, the regulator is pushing for greater financial inclusion while ensuring safeguards remain intact.

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