The Reserve Bank of India (RBI) has unveiled draft amendments to the Know Your Customer (KYC) regulations aimed at making the process of updating customer details more seamless and user-friendly. These proposed changes seek to address the persistent issues faced by beneficiaries of government schemes and regular bank customers, especially in terms of delays and accessibility.
To ensure customers remain compliant, banks will be required to send three advance notifications before the KYC update deadline, at least one of which must be a physical letter. If the customer still does not act, the bank must follow up with three additional post-deadline reminders. These messages must include:
Customers categorised as low risk will be allowed to continue regular transactions even if their KYC has lapsed. However, banks must ensure that their KYC is updated by June 30, 2026, or within one year of the due date, whichever is later. In the interim, these accounts will be subject to increased monitoring.
Banks can now rely more on Business Correspondents (BCs) to assist in updating KYC details, especially in areas with limited access to banking infrastructure. If a customer's existing KYC information remains largely unchanged (except for the address), they can:
BCs are required to issue a receipt confirming document collection, though the ultimate responsibility for verifying and updating the KYC remains with the bank.
RBI emphasised that banks should leverage the Central KYC Records Registry (CKYCR) to retrieve existing customer information, with consent. Customers can now choose from multiple convenient channels to update their KYC:
Recognising the KYC backlog in underbanked areas, especially among PMJDY account holders and government scheme beneficiaries, the RBI has urged banks to:
Also Read: Govt Approves 8.25% EPF Interest Rate for FY25: Over 7 Crore to Benefit
The RBI’s proposed amendments to the KYC framework mark a significant step toward a more inclusive, accessible, and customer-friendly banking environment. By streamlining the update process, expanding the role of Business Correspondents, and embracing digital channels.
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Published on: May 27, 2025, 10:17 AM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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