What is KYC and Why is It Important?
KYC or Know Your Customer is a process used by banks and financial institutions to verify the identity of their customers.
It helps prevent fraud, money laundering, and misuse of bank accounts.
Every customer must complete KYC when opening a new bank account and update it from time to time.
Why RBI Issued This New KYC Circular?
The Reserve Bank of India noticed that many bank accounts, especially those opened under government schemes like DBT (Direct Benefit Transfer), EBT (Electronic Benefit Transfer), and PMJDY (Pradhan Mantri Jan Dhan Yojana), had pending KYC updates.
To make the process smoother and more customer-friendly, RBI has simplified and revised the KYC update rules through the circular DOR.AML.REC.31/14.01.001/2025-26 dated June 12, 2025.
Key Highlights of the New KYC Rules (June 2025)
1. Bank Mitras (BCs) Can Now Help with KYC
To make things easier for people in rural and semi-urban areas, RBI has allowed Business Correspondents (BCs) — also known as Bank Mitras — to help customers update their KYC.
So now, you don’t need to visit the bank branch; you can do it with the help of your local Bank Mitra.
2. Banks to Hold Special KYC Camps
Banks have been instructed to organize KYC camps in rural and semi-urban areas.
These camps will help customers update their KYC easily, especially those whose accounts are inactive due to pending KYC.
Banks have also been asked to take a sympathetic and helpful approach towards reactivating such accounts.
3. Simplified Customer Onboarding (New Account Opening)
RBI has clearly outlined three easy methods for onboarding (opening new accounts):
A. Face-to-Face KYC
- You can open a new account by visiting a branch and verifying your Aadhaar biometrically.
- If your current address is different from the one linked to your Aadhaar, you can simply give a self-declaration to update it.
- Digital KYC is also allowed for face-to-face onboarding.
B. Non-Face-to-Face (Online/Remote) KYC
- You can open an account online using Aadhaar OTP-based e-KYC.
- Such accounts will be monitored closely and must complete full KYC within one year.
- You can also use DigiLocker documents, KYC Identifier, or equivalent e-documents for online onboarding.
C. Video-based Customer Identification (V-CIP)
- You can complete KYC through a live video call with a bank official.
- This process is as valid as meeting face-to-face at the branch.
- It’s safe, secure, and can be done from your home.
4. Easier KYC Updation Process
RBI has simplified the process of KYC updation (updating your existing KYC information).
Here’s how you can now update your KYC:
- You can give a self-declaration saying “no change in KYC details” or “only address changed.”
- You can send this declaration through:
- Registered email ID or mobile number
- ATM
- Online banking or mobile app
- Letter to bank
- Through a Business Correspondent (BC)
- Registered email ID or mobile number
KYC can now be updated at any branch of your bank — not just where you opened your account.
You can also update KYC using Aadhaar OTP-based e-KYC or V-CIP (Video KYC).
Banks will automatically update your KYC if they receive updates from the Central KYC Registry (CKYCR).
What Is CKYCR?
CKYCR (Central KYC Registry) is a government system that stores KYC details of customers.
When you open a new account, banks can download your KYC data directly from CKYCR (with your consent), so you don’t need to submit the same documents again.
What This Means for You
- You no longer need to stand in long queues or visit your home branch to update your KYC.
- Even rural and semi-urban customers can easily update their KYC with the help of Bank Mitras.
- You can complete KYC online, through video, or even with a simple self-declaration.
- Your account will remain active and ready to receive DBT, scholarship, and other government benefits.
In Summary
RBI’s new KYC guidelines for 2025 make life much simpler for bank customers.
The focus is on convenience, accessibility, and digital ease.
Now, updating KYC or opening a new account can be done:
Digitally
Through BCs
At any bank branch
Even through a short video interaction!So, if you’ve been delaying your KYC update — now is the best time to do it!
Contact your bank or nearby Bank Mitra and ensure your KYC is up to date.