SOURCE : NEW18 NEWS
Last Updated:May 24, 2025, 09:13 IST
For routine KYC updates, individuals will soon be able to use a simple self-declaration to confirm that their info hasn’t changed, or that only their address has been updated.
The RBI is also expanding options for periodic KYC updates, allowing them to be completed at any branch of a bank or office of a financial institution where a customer holds an account.
The Reserve Bank of India (RBI) has proposed significant changes to its Know Your Customer (KYC) guidelines, aiming to simplify the process of both onboarding new customers and updating identification documents. This initiative is a direct response to customer feedback and seeks to streamline operations for financial institutions, including banks and NBFCs.
The core of the new proposals centres on customer convenience. For routine KYC updates, individuals will soon be able to use a simple self-declaration to confirm that their information hasn’t changed, or that only their address details have been updated. This declaration can be submitted through various digital channels, including registered email, mobile numbers, ATMs, and online banking applications.
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This move aligns with RBI Governor Sanjay Malhotra’s vision of reducing repetitive documentation. He emphasized that once a customer has provided documents to a financial institution, they shouldn’t be asked for the same paperwork again.
“We need to ensure that once a customer has submitted documents to a financial institution, we do not insist on obtaining the same documents again,” the RBI governor said in March.
The RBI is also expanding options for periodic KYC updates, allowing them to be completed at any branch of a bank or office of a financial institution where a customer holds an account. Furthermore, Aadhaar OTP-based e-KYC and Video-based Customer Identification Process (V-CIP) will now be accepted for these updates, offering greater flexibility.
Addressing a common pain point, the new rules will allow customers using Aadhaar biometric e-KYC for face-to-face onboarding to provide a self-declaration if their current address differs from the one in the UIDAI database. However, for non-face-to-face onboarding, accounts will face strict monitoring, requiring full due diligence within a year.
These proposed changes are a direct effort to tackle the numerous customer complaints regarding the challenges of periodic KYC updates and the large backlog in such cases, particularly for accounts receiving direct benefit transfers (DBT) under government schemes.
The RBI has opened these proposals for public comment.
- First Published:
May 24, 2025, 09:13 IST
