**Executive Summary**
This document summarizes the response from the Minister of State for Micro, Small and Medium Enterprises to an unstarred question (No. 749) regarding the validity of the MSME 'Udyam' registration for opening current accounts in banks, to be answered on 04.12.2025. The response clarifies that the Udyam Registration Certificate (URC) is not an Official Verified Document but can be used as proof of business activity under specific RBI KYC Directions, 2025.
**Key Points / Main Content**
* **Udyam Registration Certificate (URC) Validity:**
* The URC is not an Official Verified Document (OVD).
* It can be used as one of eight documents for proof of business activity for proprietorship firms, as per RBI Commercial Bank KYC Directions, 2025.
* **Bank Requirements for Opening Accounts:**
* Banks require Customer Due Diligence of the individual (proprietor).
* Banks require any two of the eight documents prescribed in RBI Commercial Bank KYC Directions, 2025 as proof of business activity.
* Banks accept only one document (including URC) as proof of business activity.
* Banks must undertake contact point verification and collect other information to confirm business presence and activity from the address.
* **Applicability:**
* The URC-related instructions are applicable to Commercial Banks, Urban Co-operative Banks, Rural Co-operative Banks, Regional Rural Banks, Small Finance Banks, Payments Banks, and Local Area Banks, as per the KYC Directions, 2025.
* The instructions are applicable to all account-based relationships, excluding small accounts.
**Impact Analysis**
**Stakeholder:** Banks
* **Impact:** Banks need to adhere to RBI KYC Directions, 2025, regarding the URC as one of the acceptable documents for proof of business activity when opening accounts for proprietorship firms.
* **Action Required:** Ensure compliance with RBI guidelines for Customer Due Diligence, document verification, and business activity verification, including contact point verification.
**Stakeholder:** Proprietorship Firms
* **Impact:** URC is a potential document to use for account opening.
* **Action Required:** To be aware that while URC is recognised, other documentation will also be required, and that KYC and verification steps will need to be undertaken for account openings.
**Stakeholder:** Reserve Bank of India (RBI)
* **Impact:**
* **Action Required:** To ensure that all banking entities are compliant with existing guidelines regarding URC and KYC.
Key Entities Referenced
Udyam Registration Certificate (URC): A certificate issued for MSME registration, used as a proof of business activity.
Reserve Bank of India (RBI): Source of information regarding account opening requirements for proprietorship firms.
RBI Commercial Bank KYC Directions, 2025: Directions issued by the RBI specifying KYC requirements for banks.
Micro, Small and Medium Enterprises: The sector to which the Udyam Registration Certificate applies.
Commercial Banks (CBs), Urban Co-operative Banks (UCBs), Rural Co-operative Banks (RCBs), Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Payments Banks (PBs), and Local Area Banks (LABs): List of banks to which URC related instructions are applicable.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 749
TO BE ANSWERED ON 04.12.2025
UDYAM REGISTRATION CERTIFICATE
749. MS KANGNA RANAUT:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether the MSME ‘Udyam’ registration issued by the Government is a valid document for
registered Micro, Small and Cottage Industries to open current accounts in banks, if so, the details
thereof;
(b) the details of the banks where ‘Udyam’ certificate is accepted/not accepted for opening
current accounts and the reasons therefor;
(c) the Government may issue directions to all banks to recognize MSME registration
‘Udyam’ as a valid document for opening current accounts; and
(d) if so, the details thereof along with the time by which it is likely to be done?:
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a) to (d): As per information received from Reserve Bank of India- for opening of account of
proprietorship firms, apart from Customer Due Diligence of individual (proprietor), banks are
required to obtain any twoof the eight documents prescribed in RBI Commercial Bank KYC
Directions, 2025 28.11.2025 as a proof of business/ activity in the name of the proprietary firm.
The Udyam Registration Certificate (URC) is not an Official Verified Document (OVD), instead,
it is one of the eight documents for proof of business/ activity to be obtained from proprietorship
firm. The banks accepts only one document (including URC) as proof of business activity, in terms
of the said Directions, the bank is required to undertake contact point verification, collect other
information to confirm the business presence and satisfy itself about the business activity from the
address.
The URC related instructions are applicable to Commercial Banks (CBs), Urban Co-
operative Banks (UCBs), Rural Co-operative Banks (RCBs), Regional Rural Banks (RRBs), Small
Finance Banks (SFBs), Payments Banks (PBs), and Local Area Banks (LABs), as per the KYC
Directions, 2025. The instructions contained in the above Directions are applicable to all account-
based relationships entered to by the said banks, and we have not issued any specific instructions
for any account- type (such as current account or savings account, etc.) except the small accounts.
******