RBI simplifies KYC rules to allow face-to-face, video and OTP-based onboarding for customers

The Reserve Bank of India (RBI) on Thursday introduced a series of amendments to its Know Your Customer (KYC) norms aimed at making customer onboarding faster, more flexible, and accessible across both digital and physical channels.

Under the RBI (KYC) (Amendment) Directions, 2025, the central bank has laid out simplified procedures for onboarding customers using Aadhaar-based e-KYC, video KYC, and DigiLocker documents. The move is intended to support inclusive banking and ease the process for first-time users, especially those joining through government schemes like DBT, EBT, and PMJDY.

Three key modes of customer onboarding:

1. Face-to-face onboarding

• Customers can open accounts using Aadhaar biometric-based e-KYC.
• If the current address differs from the Aadhaar address, a simple self-declaration is sufficient.
• Digital KYC is also permitted in in-person setups.

2. Non-face-to-face onboarding (NFTF)

• Customers can be onboarded remotely using Aadhaar OTP-based e-KYC, subject to specific conditions.
• Banks can also accept DigiLocker documents, e-documents, and certified paper copies for verification.
• Accounts opened through NFTF must complete full Customer Due Diligence (CDD) within one year.

3. Video-based Customer Identification Process (V-CIP)

• V-CIP enables live, secure, consent-based video interaction with a bank official for identity verification.
• It is considered equivalent to face-to-face onboarding and is valid for both account opening and KYC updates.

Additional measures to streamline onboarding:

• Central KYC Registry (CKYCR) integration: Banks must use the CKYCR to fetch a customer’s existing KYC record with consent, avoiding the need for repeated document submissions.
• Business Correspondents (BCs): BCs are now authorised to assist in onboarding and KYC updates, increasing reach in rural and remote areas.
• Empathetic reactivation: Banks have been advised to take a lenient view while reactivating accounts opened under welfare schemes.

The RBI has also asked banks to conduct special onboarding and KYC update camps and run targeted awareness campaigns in rural and semi-urban areas to bring more users into the formal banking system.