RBI New Rules: It will be necessary for customers to update KYC on time. Now banks will have to send reminders to customers 3 times before freezing the bank account. To increase the security of customers and improve banking service, the Reserve Bank of India (RBI) has issued a new directive
RBI New Rules: It will be necessary for customers to update KYC on time. Now banks will have to send reminders to customers 3 times before freezing the bank account. To increase the security of customers and improve banking service, the Reserve Bank of India (RBI) has issued a new directive. Under this, now all banks and regulated institutions will have to give information to the customers several times to update KYC (Know Your Customer) on time.
These new instructions have been issued under RBI KYC (Amendment) Directions 2025. Will be applicable from January 1, 2026. These will be applicable to all customers, including accounts related to Jan Dhan Yojana, Direct Benefit Transfer (DBT) and Electronic Benefit Transfer (EBT).
What will change?
RBI found that there is a lot of delay in KYC update, especially in government related schemes. Therefore, now banks will have to play a more active role.
These will be the changes
The bank will have to send notifications at least 3 times before the KYC due date, out of which one physical letter sent from the post office will be necessary. The rest of the notifications can be sent through SMS, email or mobile app.
If KYC is still not updated after the KYC due date, then the bank will have to send 3 more reminders, out of which one more physical letter will be necessary.
Clear information will have to be given
Each notification should have guidelines in simple language, ways of help and what will be the effect of not getting KYC done. All these things should be clear.
Audit trail is mandatory
The bank will have to keep a record of every notification, so that it can be audited later.
Relief for rural customers
Keeping in mind the people of rural and remote areas, now the business correspondent (BC) of the bank will also be able to help in KYC update.
If the customer’s information is the same as before, or only the address has changed, then he can get the KYC updated by giving a declaration himself. BC will enter it digitally in the bank system.
Relief to low-risk customers
- For low-risk customers, RBI has directed that
- Even if their KYC is pending, the bank will not stop the facility of transaction, provided that KYC is updated by 30 June 2026 or within one year of the KYC due date.
Awareness campaign in rural areas
RBI also said that KYC pendency is high in rural and semi-urban areas. Therefore, the bank has been instructed to run KYC camps and awareness campaigns, so that people can get KYC done on time. Rules related to active accounts and unclaimed deposits have also been added in this revision, but RBI will give more information about them later.
