IFSCA Expands V-CIP Framework | Group Entities and KRAs Can Now Conduct Video KYC

IFSCA Circular F. No. IFSCA-DAC/7/2024-AMLCFT dated 31.10.2025

1. Background

The International Financial Services Centres Authority (IFSCA) has amended its Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Know Your Customer (KYC) Guidelines, 2022, introducing several technology-driven and procedural enhancements.

These changes are aimed at strengthening customer due diligence (CDD) processes while promoting digital onboarding, security, and regulatory coordination among financial institutions operating in International Financial Services Centres (IFSCs).

2. Key Amendment – Expansion of V-CIP Authority

Under the amended framework, the IFSCA now permits officials from financial group entities—that are either:

• Supervised by other financial regulators, or
• Registered with KYC Registration Agencies (KRAs)—

to carry out Video-based Customer Identification Processes (V-CIP) on behalf of regulated entities.

This marks a significant shift from the earlier rule, where only officials of the regulated entity itself were authorised to perform V-CIP, thereby enhancing operational flexibility and group-wide compliance integration.

3. Security and Technological Standards

The updated guidelines mandate that all entities conducting V-CIP must implement robust technological safeguards, including:

• End-to-end encrypted communication systems for video interactions,
• AI-based facial and document verification tools to ensure authenticity of customer credentials, and
• Comprehensive audit trails to record, monitor, and validate the identification process.

These measures aim to minimise impersonation risks, ensure data privacy, and uphold global standards for secure remote onboarding.

4. Pilot Programme for NRIs

A key addition in the amendments is the introduction of a four-month pilot programme permitting Video-based Customer Identification for Non-Resident Indians (NRIs).

The pilot will be restricted to 11 specified countries, selected based on data protection, regulatory equivalence, and technological readiness criteria.

Under this pilot:

• V-CIP can be conducted for NRI clients residing in these countries, and
• The customer account will be activated only after the first overseas credit is received, ensuring transactional validation and authenticity.

5. Objective and Regulatory Intent

The amendments are designed to:

• Enhance financial inclusion for overseas clients through secure digital onboarding,
• Strengthen AML and CFT compliance while adopting technology-led solutions,
• Promote inter-regulatory collaboration within financial conglomerates, and
• Align IFSCA’s regulatory framework with international best practices on digital KYC and remote verification.

6. Expected Impact

These changes are expected to:

• Reduce onboarding friction for clients of IFSC entities,
• Enable shared KYC utilities within regulated financial groups,
• Improve compliance accuracy using AI-driven verification systems, and
• Establish IFSCA as a leader in adopting advanced RegTech solutions among global financial centres.

7. Conclusion

With the 2025 amendments to the IFSCA AML, CFT, and KYC Guidelines, the Authority has paved the way for broader institutional participation in Video-based Customer Identification and secure digital onboarding for NRIs.

The inclusion of AI-enabled verification, group-level V-CIP authorisation, and a controlled pilot programme reflects a balanced approach that promotes innovation, compliance, and financial integrity within India’s international financial ecosystem.

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