The financial institutions will not only be able to bridge the last-mile gap but also enable customers to retain seamless and secure access to their accounts
FinTech BizNews Service
Mumbai, June 12, 2025: A bank shall make available the facility of updation of KYC for activation of inoperative accounts and unclaimed deposits at all branches (including non-home branches). Further, a bank shall endeavour to provide the facility of updation of KYC in such accounts and deposits through Video-Customer Identification Process (V-CIP). The V-CIP related instructions under Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time) shall be adhered to by the bank. Additionally, the services of an authorised Business Correspondent of the bank may be utilized for activation of inoperative accounts as prescribed in paragraph 38(a)(iia) of the above Master Direction.”
The Reserve Bank has observed a large pendency in periodic updation of KYC including in the accounts opened for credit of Direct Benefit Transfer (DBT)/ Electronic Benefit Transfer (EBT) under Government schemes to facilitate credit of DBTs and/ or scholarship amount (DBT/ EBT/ scholarship beneficiaries) and accounts opened under PMJDY.
In order to further ease the process for the convenience of customers, the instructions regarding updation/ periodic updation of KYC have been amended with the intent, inter alia, to allow BCs to facilitate in the process of KYC updation vide Reserve Bank of India (Know Your Customer (KYC)) (Amendment) Directions, 2025. Similar amendments related to inoperative accounts and unclaimed deposits have been made vide circular DOR.SOG(LEG).REC/32/09.08.024/2025-26 dated June 12, 2025.
Further, the banks are advised to organize camps and launch intensive campaigns including special camps, focusing on periodic updation of KYC, especially in rural and semi urban branches and the branches having large pendency in periodic updation of KYC. The banks may also facilitate the process of activation of such accounts by taking an empathetic view as indicated in the circular DoS.CO.PPG.SEC.12/11.01.005/2024-25 dated December 2, 2024.
According to Mr. Atul Gupta, Head of Risk and Compliance, Cashfree Payments, "RBI’s revised KYC guidelines aim to ensure the continued availability of financial services for a vast majority of the population, especially in rural and semi-urban areas. Through a mix of organized camps, video KYC, and the Business Correspondents network, financial institutions will not only be able to bridge the last-mile gap but also enable customers to retain seamless and secure access to their accounts."
