The Reserve Bank of India (RBI) has recently implemented significant updates to its Know Your Customer (KYC) guidelines, effective immediately as of November 6, 2024.
These changes aim to enhance regulatory alignment with the Prevention of Money Laundering (Maintenance of Records) Rules and to streamline processes for regulated entities (REs).
Key Updates to KYC Guidelines
1. Customer Due Diligence at UCIC Level
The revised Master Direction mandates that REs conduct Customer Due Diligence (CDD) at the Unique Customer Identification Code (UCIC) level.
This means that existing KYC-compliant customers can open additional accounts or access other services without undergoing a fresh CDD process, simplifying the customer experience significantly.
2. Timely Updates to KYC Records
REs are now required to update KYC information within seven days of receiving new or updated data from customers.
This information must be submitted to the Central KYC Records Registry (CKYCR), which will then notify all reporting entities about the updates. This mechanism ensures that KYC records remain current and consistent across institutions.
3. Streamlined Verification Process
For establishing account-based relationships or verifying identities, REs can request the KYC Identifier from customers or retrieve it from CKYCR.
This process eliminates the need for customers to resubmit documents unless specific conditions arise, such as changes in customer information or incomplete records
These updates are designed to enhance the efficiency and security of customer verification processes while ensuring compliance with evolving regulatory standards.
By adopting these measures, financial institutions can expect improved operational efficiency, reduced paperwork for customers, and a more robust framework for combating money laundering and terrorist financing activities.
As India’s leading provider of Aadhaar-based Digital Identity and KYC solutions, ECS welcomes these changes, which promise to facilitate greater adoption of secure identity verification services across the financial sector.
Feel free to contact our colleague, Amit Joshi, at amit@eastcs.com for any queries regarding these new guidelines or to learn more about ECS’s comprehensive e-KYC solutions suite.