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In response to lengthy Know Your Customer (KYC) processes, the Reserve Bank of India (RBI) has proposed a series of amendments to its KYC regulations. Low-risk customers and beneficiaries of government welfare schemes are expected to particularly benefit from simplified compliance and enhanced accessibility.
The proposals released in the draft amendments include measures to streamline periodic KYC updates and significantly reduce friction in customer onboarding. Among the most notable changes is a proposal to allow customers to update KYC details using a self-declaration in the event of either no updates or just a change in address.
The RBI also proposes a less rigid timeline for KYC updates. Customers classified as low-risk will now have until 30 June 2026, or one year from their original due date, whichever is later, to update their information. This move is intended to prevent service disruption, such as for beneficiaries of government welfare schemes, and allow for a focus on higher-risk cases.
Banks are also instructed to make KYC updates more accessible to rural and semi-urban residents in India by allowing customers to submit changes through more channels, including mobile banking apps, ATMs, and business correspondents. Institutions must also notify customers at least three times ahead of their KYC update filing deadline and three times after the due date.
The changes are part of a larger push by the RBI to modernize and digitize customer due diligence, including expanding the uses of Aadhaar-based e-KYC, which is the world’s largest biometric ID system.
The RBI invites the public to comment on the proposed changes by 6 June 2025.
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