MONEY
RBI relaxes norms for KYC update by banks, REs amid mounting backlog
- IBJ Bureau
- Jun 13, 2025
The RBI has issued fresh guidelines, aimed at easing the process of know-your-customer (KYC) update, especially for accounts linked to government benefit transfers such as Pradhan Mantri Jan Dhan Yojana and direct benefit transfer.
As a part of its revised guidelines, the RBI has outlined a simplified process for KYC update to ease the burden on customers. Regulated entities (REs), including banks, can now accept self-declarations from customers, confirming either no change in their KYC details or only an address update. These declarations can be submitted via digital and non-digital channels, such as customers’ registered email or mobile number, ATMs, online banking, mobile apps, physical letters or through business correspondents (BCs).
KYC update can also be done at any branch of the bank or RE where the customer holds an account. Additionally, Aadhaar one-time passcode (OTP)-based e-KYC and video-based customer identification process (V-CIP) are permitted for KYC updates. Banks have also been instructed to update customer records automatically based on notifications received from the Central KYC Registry, the RBI has said.
In a circular issued on June 12, 2025, the RBI has acknowledged a large pendency in KYC updates, particularly for basic savings accounts under government welfare schemes. To address this, the regulator has allowed banks to use BCs to facilitate the KYC update process, permitted the use of Aadhaar one-time OTP-based e-KYC and V-CIP and encouraged banks to run special KYC update camps, especially in rural and semi-urban areas.
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