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 services, 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 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 linked to Jan Dhan Yojana, Direct Benefit Transfer (DBT) and Electronic Benefit Transfer (EBT).
What all 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
Before the KYC due date, the bank will have to send notifications at least 3 times before the KYC date, out of which one physical letter must be sent from the post office. The rest of the notifications can be sent via SMS, email or mobile app.
If the KYC is still not updated after the KYC due date, the bank will have to send 3 more reminders, out of which one more physical letter will be required.
It is necessary to provide clear information
Every notification should have simple instructions, methods of help and the consequences of not getting KYC done. All these things should be clear.
Audit trail 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 Correspondents (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 his KYC updated by giving a declaration himself. The BC will enter it digitally in the bank system.
Relief to low-risk customers
For low-risk customers, RBI has instructed that
Even if their KYC is pending, the banks will not stop the transaction facility, provided the KYC is updated by June 30, 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, banks have been instructed to conduct KYC camps and awareness campaigns so that people can get KYC done on time. Rules related to active account and unclaimed deposit have also been added in this revision, but RBI will give more information about them later.
