In a significant move to ease banking operations for millions of customers, the Reserve Bank of India (RBI) has proposed new guidelines to simplify the Know Your Customer (KYC) update process. The draft circular, released on Friday, outlines key changes aimed at addressing long-standing challenges, especially for beneficiaries of government schemes and holders of dormant accounts. The revised guidelines are expected to provide much-needed relief to customers who have often faced difficulties while updating KYC details, particularly for accounts opened under government benefit schemes like Direct Benefit Transfer (DBT), Electronic Benefit Transfer (EBT), and the Pradhan Mantri Jan Dhan Yojana.
One of the major highlights of the draft circular is the RBI's directive to banks to ensure that KYC update facilities for dormant or unclaimed accounts are made available at all branches. Additionally, the central bank emphasized that banks can leverage authorized Business Correspondents (BCs) to assist customers in reactivating such accounts. In a further push towards digital facilitation, the RBI has recommended that banks offering Video-based Customer Identification Process (V-CIP) services should provide this facility to customers on request, making remote KYC updates more accessible.
The RBI clarified that these changes aim not only to streamline compliance but also to combat money laundering and enhance financial inclusion by making it easier for citizens to maintain active and verified bank accounts. The central bank has invited feedback on the draft circular from stakeholders before finalizing the updated guidelines. This move is widely expected to benefit lakhs of customers, particularly in rural and underserved areas, by making banking services more user-friendly and inclusive.