Skip to main content

What is KYC?

Be it opening a new bank account, applying for a new credit card, registering for new e-wallet, or any other account or facility involving financial matters, the application process is incomplete until KYC is done. 

What is KYC?

KYC or Know Your Customer is a process of customer identification and verification while opening an account or undertaking a financial transaction.

Why is KYC process needed?

  1. To prevent money laundering
  2. To combat financing of terrorism

What is verified under KYC?

The banks / financial institutions collect the relevant documents from the customers to verify the following –

  1. Proof of identity
  2. Proof of address

Which documents can be collected for KYC?

As per RBI’s Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on May 10, 2021), “Officially Valid Document” (OVD) means –

  1. Passport
  2. Driving licence
  3. Proof of possession of Aadhaar number
  4. Voter's Identity Card issued by the Election Commission of India
  5. Job card issued by NREGA duly signed by an officer of the State Government 
  6. Letter issued by the National Population Register

What if the OVD doesn’t have updated address?

As per RBI’s Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on May 10, 2021), where the OVD does not have updated address, the following documents shall be deemed to be OVDs for the limited purpose of proof of address –

  1. Utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill)
  2. Property or Municipal tax receipt
  3. Pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address
  4. Letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation

The customer shall submit OVD with current address within 3 months of submitting the above documents.

What is periodic updation of KYC?

As the banks are mandated to keep their records up-to-date and relevant by undertaking periodic reviews and updations, a fresh KYC process / documentation may have to be undertaken in the following cases –

  • Where the KYC documents available in bank records do not conform to present list of Officially Valid Documents (OVD).
  • Where the validity of the KYC document submitted earlier may have expired. 
  • Where the periodic updation is due based on the risk-category of the customer –

Risk-category of customers Periodicity of KYC updation from the date of opening the account / last KYC updation
High risk Once in every 2 years
Medium risk Once in every 8 years
Low risk Once in every 10 years

Banks may carry out period updation through Aadhaar OTP based e-KYC in non-face to face mode. Declaration of current address, if the current address is different from the address in Aadhaar, shall not require positive confirmation in this case. However, banks shall ensure that the mobile number for Aadhaar authentication is same as the one available with them in the customer’s profile, in order to prevent any fraud. Banks are also required to advise the customers that in case of any update in the documents submitted by the customer, the update of such documents shall be submitted to the bank within 30 days of the update to the documents.

(Updated on June 12, 2025)

Notwithstanding the above timelines, in respect of an individual customer who is categorized as low risk, banks shall allow all transactions and ensure the updation of KYC within 1 year of its falling due for KYC or upto June 30, 2026, whichever is later.

Prior to the due date of periodic updation of KYC, banks shall give at least 3 advance intimations, including at least 1 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, banks shall give at least 3 reminders, including at least 1 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. Banks shall expeditiously implement the same but not later than January 01, 2026.

How is KYC process carried out?

(Updated on June 12, 2025)

If there is no change in KYC information, a self-declaration to that effect from the individual customer is sufficient to complete the re-KYC process. The banks have been advised to provide facility of such self-declaration to the individual customers through various non-face-to-face channels such as registered email-id, registered mobile number, ATMs, digital channels (such as online banking / internet banking, mobile application), letter, authorized Business Correspondent (BC) of the bank, etc., without need for a visit to bank branch. 

If there is only a change in address, customers can furnish revised / updated address through any of these channels after which, the bank would undertake verification of the declared address within 2 months.

Fresh KYC process can be done by visiting a bank branch, or remotely through a Video based Customer Identification Process (V-CIP) (wherever the same has been enabled by the banks).

What is “Video based Customer Identification Process (V-CIP)”?

V-CIP is a method where the official of bank / financial institution undertakes live audio-visual interaction with the customer for KYC purpose.

What is “Central KYC Records Registry” (CKYCR)?

CKYCR means an entity that stores the KYC records in digital form. Government of India has authorised the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), to act as, and to perform the functions of the CKYCR. 

When the KYC records of a customer are uploaded on CKYCR platform, a unique identification number (called KYC Identifier) is generated. This KYC Identifier is communicated to the customer for future reference.

What are the recent updates in KYC guidelines?

(Updated on August 14, 2025)

For the purpose of verifying the identity of customers at the time of commencement of an account-based relationship or while carrying out occasional transaction of an amount equal to or exceeding ₹50,000, whether conducted as a single transaction or several transactions that appear to be connected, or any international money transfer operations, REs, shall at their option, rely on customer due diligence done by a third party.


References

Reserve Bank lof India. (2025, August 14). 'Reserve Bank of India (Know Your Customer (KYC)) (2nd Amendment) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12893&Mode=0

Reserve Bank of India. (2016, February 25). 'Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on June 12, 2025)'. Retrieved from https://website.rbi.org.in/en/web/rbi/-/notifications/master-direction-know-your-customer-kyc-direction-2016-updated-as-on-may-04-2023-lt-span-gt-11566

Reserve Bank of India. (2023, April 28). 'Amendment to the Master Direction (MD) on KYC'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12497&Mode=0

Reserve Bank of India. (2023, April 28). 'Annexure to the circular on amendment to the MD on KYC'. Retrieved from https://rbidocs.rbi.org.in/rdocs/content/pdfs/NT2428042023_AN.pdf

Reserve Bank of India. (2023, January 05). 'Periodic Updation of KYC details of Customers'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=54998

Reserve Bank of India. (2025, June 12). 'Reserve Bank of India (Know Your Customer (KYC)) (Amendment) Directions, 2025'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/reserve-bank-of-india-know-your-customer-kyc-amendment-directions-2025

Reserve Bank of India. (2025, June 12). 'Updation/ Periodic Updation of KYC – Revised Instructions'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/updation/-periodic-updation-of-kyc-revised-instructions-1


Follow at - Telegram   Instagram   LinkedIn   Twitter
Labels:

Comments

Post a Comment

Popular Posts

Reserve Bank - Integrated Ombudsman Scheme, 2026 (RB-IOS, 2026)

Reserve Bank of India (RBI) has issued Reserve Bank - Integrated Ombudsman Scheme, 2026. Who is RBI Ombudsman and RBI Deputy Ombudsman? RBI may appoint one or more of its officers as RBI Ombudsman and RBI Deputy Ombudsman, to carry out the functions entrusted to them under the Reserve Bank - Integrated Ombudsman Scheme (RB-IOS).  The appointment of RBI Ombudsman or RBI Deputy Ombudsman shall be for up to 3 years at a time. RBI Ombudsman shall have the power to examine and close all complaints.   RBI Deputy Ombudsman shall have the power to close those complaints falling under clause 10 of the RB-IOS (i.e. non-maintainable complaints) and complaints resolved as per the provisions of the clause 14(8)(a) to 14(8)(c) of the RB-IOS (i.e. complaint resolved / withdrawn). Which entities are covered under the RB-IOS? RB-IOS shall be applicable to the following Regulated Entities (REs) – Commercial Banks Regional Rural Banks  State Co-operative Banks Central Co-operative Bank...
Post a Comment
Read more

Modified Interest Subvention Scheme for Agricultural Loans

Reserve Bank of India (RBI) has published the modified interest subvention scheme (MISS) for short term loans for agriculture and allied activities availed through Kisan Credit Card (KCC) during the financial year 2025-26. Which loans are covered under modified interest subvention scheme (MISS)? The short-term crop loans and short-term loans for allied activities including animal husbandry, dairy, fisheries, bee keeping etc. up to an overall limit of ₹3 lakh to farmers through KCC during the year 2025-26 will be covered for interest subvention. Which lending institutions are covered under MISS? The MISS is applicable to the lending institutions viz. Public Sector Banks (PSBs) and Private Sector Banks (in respect of loans given by their rural and semi-urban branches only), Small Finance Banks (SFBs) and computerized Primary Agriculture Cooperative Societies (PACS) ceded with Scheduled Commercial Banks (SCBs), on use of their own resources.  How much is the interest subvention? The a...
Post a Comment
Read more

Internal Ombudsman for Regulated Entities (Banks, NBFCs, PPI Issuers and CICs)

Reserve Bank of India (RBI) has issued directions on Internal Ombudsman for regulated entities. To whom shall the directions on Internal Ombudsman (IO) be applicable? The directions on IO shall be applicable to the following Regulated Entities (REs) – Commercial Banks (other than Small Finance Banks, Payment Banks, and Local Area Banks) having 10 or more banking outlets in India as on March 31, 2025, whether such bank is incorporated in / outside India Small Finance Banks having 10 or more banking outlets in India as on March 31, 2025 Payments Banks having 10 or more banking outlets in India as on March 31, 2025 Non-Banking Financial Companies (NBFCs) fulfilling the following criteria as on March 31, 2025 – Deposit-taking NBFCs (NBFCs-D) with 10 or more branches Non-Deposit taking NBFCs (NBFCs-ND) with asset size of ₹5,000 crore and above and having public customer interface Non-Bank Prepaid Payment Instruments Issuers having more than 1 crore Prepaid Payment Instruments (PPIs) outstan...
Post a Comment
Read more

Financial Literacy Week (FLW) 2026

Reserve Bank of India (RBI) has observed financial literacy week from February 09 to 13, 2026. Financial Literacy and Financial Education Organization for Economic Co-operation & Development (OECD) defines ‘financial literacy’ as a combination of financial awareness, knowledge, skills, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being.  OECD defines ‘financial education’ as the process by which financial consumers / investors improve their understanding of financial products, concepts and risks and through information, instruction and / or objective advice, develop the skills and confidence to become more aware of financial risks and opportunities, to make informed choices, to know where to go for help and to take other effective actions to improve their financial well-being. Financial Literacy Week (FLW) Reserve Bank of India (RBI) has been observing Financial Literacy Week (FLW) every year since 2016 to p...
Post a Comment
Read more

What is Reserve Bank of India – Digital Payments Index (RBI-DPI)? (Updated on February 12, 2026)

There have been continuous efforts by various stakeholders for digitization of payments in the country. But how to we measure the impact of these efforts?  What is Reserve Bank of India – Digital Payments Index (RBI-DPI)? Reserve Bank of India (RBI) has constructed a composite Digital Payments Index (DPI) to capture the extent of digitization of payments across the country. What are the parameters of RBI-DPI? The RBI-DPI comprises of five broad parameters that enable measurement of deepening and penetration of digital payments in the country over different time periods. These parameters along with their weights in the RBI-DPI are as follows –  Payment Enablers (25%) Payment Infrastructure – Demand-side factors (10%) Payment Infrastructure – Supply-side factors (15%) Payment Performance (45%) Consumer Centricity (5%).  Each of these parameters have sub-parameters which, in turn, consist of various measurable indicators.  What is the base year for RBI-DPI? The RBI-DPI ...
Post a Comment
Read more