RBI Amends KYC Rules to Boost Compliance and Inclusivity

RBI/2025-26/75 DOR.AML.REC.46/14.01.001/2025-26, Dated 14.08.2025

RBI Issues Second Amendment to KYC Directions, 2025

The Reserve Bank of India (RBI) has notified the RBI (Know Your Customer (KYC)) (2nd Amendment) Directions, 2025. These amendments are aimed at strengthening customer due diligence and ensuring greater transparency in financial transactions. The revised norms provide clarity on existing provisions while also introducing additional safeguards to protect customer rights.

Enhanced Customer Rights and Accessibility

One of the key changes introduced is the mandate that no KYC application—including those submitted by Persons with Disabilities (PwDs)—can be rejected without valid reasons. This measure is intended to prevent arbitrary denial of services and ensure that all customers are treated fairly. By emphasizing inclusivity, the RBI seeks to make banking and financial services more accessible to vulnerable sections of society.

Wider Scope of KYC for Transactions

The amendment also extends KYC requirements to cover occasional transactions of ₹50,000 or more, as well as international money transfers. This broadening of scope reflects RBI’s intent to strengthen anti-money laundering (AML) and counter-terrorism financing (CTF) measures. Financial institutions will now be required to conduct due diligence for such high-value or cross-border transactions, thereby tightening monitoring and compliance.

Recognition of Aadhaar Face Authentication

In a significant move towards digital convenience, the RBI has also recognized Aadhaar Face Authentication as a valid mode of authentication under KYC norms. This is expected to streamline the verification process by offering customers a faster and more secure digital option. Additionally, the amendments provide for the inclusion of a direct link to RBI’s KYC FAQs, enabling customers to access official guidance easily and resolve common queries regarding compliance.

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