Updation/ Periodic Updation of KYC – Revised Instructions

## Report on RBI Circular DOR.AML.REC.3114.01.001/2025-26: Updation / Periodic Updation of KYC – Revised Instructions **1. Executive Summary:** This report analyzes Reserve Bank of India (RBI) circular DOR.AML.REC.3114.01.001/2025-26, dated June 12, 2025, which amends existing Know Your Customer (KYC) guidelines. The core purpose of this amendment is to ease the process of periodic KYC updation for customers, particularly those with accounts opened for Direct Benefit Transfer (DBT), Electronic Benefit Transfer (EBT) under Government schemes, and accounts opened under PMJDY. The key changes include allowing Business Correspondents (BCs) to facilitate KYC updation, promoting special camps for KYC updation, and simplifying the KYC updation process through various digital and non-digital channels. This report details these changes, the impacted stakeholders, and the expected outcomes. **2. Introduction:** This report aims to provide an informative overview of the RBI circular DOR.AML.REC.3114.01.001/2025-26, dated June 12, 2025, concerning revised instructions on the updation and periodic updation of Know Your Customer (KYC) guidelines, based solely on the provided policy text. **3. Policy Overview:** * **Amendment:** This circular is an amendment to the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016, as amended from time to time. * **Core Objective(s):** The primary objective is to ease and simplify the process of KYC updation and periodic updation for customers, particularly focusing on those receiving DBT/EBT benefits and PMJDY account holders, and to reduce the pendency in KYC updation. **4. Background and Rationale:** The amendment is likely driven by the observation of a significant backlog in the periodic updation of KYC, especially in accounts opened for DBT/EBT and PMJDY schemes. This suggests that the existing KYC updation processes were proving cumbersome or ineffective for a substantial segment of the population, necessitating a streamlined approach to improve compliance and financial inclusion. The changes aim to facilitate easier and more convenient KYC updation for these customers. **5. Key Provisions / Changes:** This section focuses specifically on the changes introduced by the provided amendment text to the original KYC guidelines. * **Change 1: BCs to Facilitate KYC Updation:** * **Original Policy Part Changed:** The original policy restricted who could facilitate KYC updation. * **New Rule/Provision:** Business Correspondents (BCs) are now explicitly allowed to facilitate the KYC updation process. This is documented in the Reserve Bank of India Know Your Customer (KYC) Amendment Directions, 2025. * **Difference/Effect:** This expands the reach and accessibility of KYC updation services, particularly in areas where bank branches are less prevalent, potentially accelerating the KYC updation process. * **Change 2: Promotion of KYC Updation Campaigns:** * **Original Policy Part Changed:** The original policy might not have emphasized proactive KYC updation campaigns. * **New Rule/Provision:** Banks are advised to organize camps and launch intensive campaigns, including special camps, focusing on periodic updation of KYC, especially in rural, semi-urban branches, and branches with large pendency. Further, they are advised to facilitate the process of activation of such accounts by taking an empathetic view as indicated in the circular DoS.CO.PPG.SEC.1211/01.005/2024-25 dated December 2, 2024. * **Difference/Effect:** This indicates a more proactive approach by banks to address the KYC updation backlog and may significantly increase customer awareness and participation. * **Change 3: Simplified KYC Updation Processes:** * **Original Policy Part Changed:** The original policy likely contained more complex or restrictive procedures for KYC updation. * **New Rule/Provision:** The circular details simplified processes for customer onboarding and updation/periodic updation of KYC through various modes (face-to-face, non-face-to-face, VCIP), and specifies how REs are allowed to obtain self-declarations from customers regarding changes in KYC information through multiple channels (email, mobile, ATMs, online banking, etc.). Aadhaar OTP based eKYC and VCIP are now permitted for KYC updation. REs are directed to update KYC information based on updates received from CKYCR. * **Difference/Effect:** The new rules will make the process easier for customers. It will also help the Regulated entities to update their records with ease. **6. Target Audience and Stakeholders:** Based on the provided text, the direct target audience and stakeholders include: * Regulated Entities (REs), including banks and other financial institutions, as they are the primary recipients of the instructions. * Customers of REs, especially those with accounts opened for DBT/EBT benefits, PMJDY account holders, and those residing in rural and semi-urban areas. * Business Correspondents (BCs) who are now authorized to facilitate KYC updation. * The Central KYC Records Registry (CKYCR). **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The RBI is the issuing and overseeing body. The Regulated Entities (REs), i.e., the banks and other financial institutions, are responsible for implementing these changes. * **Timelines/Procedures:** While the text doesn't explicitly state specific deadlines, it implies an immediate implementation of the revised instructions. Banks are expected to proactively organize camps and launch campaigns. The simplified procedures outlined for KYC updation are expected to be adopted immediately. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these specific changes introduced by the amendment text are: * **Reduced Pendency in KYC Updation:** By simplifying the process and expanding access through BCs and special camps, the RBI aims to significantly reduce the backlog of KYC updations, especially in specific account categories. * **Increased Customer Convenience:** The simplified processes and the use of digital channels, self-declaration, and VCIP are expected to make KYC updation more convenient for customers. * **Improved Financial Inclusion:** Easier KYC updation may facilitate continued access to financial services for vulnerable populations relying on DBT/EBT and PMJDY accounts. * **More accurate and updated customer information:** The use of CKYCR will help REs maintain up to date and accurate customer data. **9. Conclusion:** RBI circular DOR.AML.REC.3114.01.001/2025-26 introduces important amendments to KYC guidelines, primarily focused on simplifying and streamlining the KYC updation process. By enabling BCs, promoting KYC campaigns, and introducing simplified procedures, the RBI aims to reduce pendency, enhance customer convenience, and promote financial inclusion. The changes are significant for Regulated Entities and their customers, requiring them to adapt their processes and leverage the new flexibilities provided by the amended guidelines.

Key Entities Referenced