Reserve Bank of India (All India Financial Institutions – Know Your Customer) Directions, 2025

RBI/DOR/2025-26/335 DOR.AML.REC.No.254/14.01.011/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (All India Financial Institutions – Know Your Customer) Directions, 2025 (Updated as on December 29, 2025)

Table of Contents

• Chapter I – Preliminary
• Chapter II – General
• Chapter III – Customer Acceptance Policy
• Chapter IV – Risk Management
• Chapter V – Customer Identification Procedure (CIP)
• Chapter VI – Customer Due Diligence (CDD) Procedure
• Chapter VII – Record Management
• Chapter VIII – Reporting Requirements to Financial Intelligence Unit – India
• Chapter IX – Requirements/obligations under International Agreements - Communications from International Agencies
• Chapter X – Other Instructions
• Chapter XI – Repeal and Other Provisions
• Annex I
• Annex II

Introduction

In order to prevent AIFIs and other financial institutions from being used as a channel for Money Laundering (ML) / Terrorist Financing (TF) and to ensure the integrity and stability of the financial system, efforts are continuously being made both internationally and nationally, by way of prescribing various rules and regulations. Internationally, the Financial Action Task Force (FATF), which is an inter-governmental body established in 1989 by the Ministers of its member jurisdictions, sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. India, as a member of FATF, is committed to upholding measures to protect the integrity of the international financial system.

In India, the Prevention of Money-Laundering Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, form the legal framework on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). The provisions of the PML Act, 2002 and the PML Rules, 2005, as amended from time to time by the Government of India, require Regulated Entities (REs) to follow certain customer identification procedures while undertaking a transaction either by establishing an account-based relationship or otherwise, and to monitor their transactions.

Accordingly, in exercise of the powers conferred by sections 35A of the Banking Regulation Act, 1949, the Banking Regulation Act (AACS), 1949, read with section 56 of the Act ibid., sections 45JA, 45K, and 45L of the Reserve Bank of India Act, 1934, section 10(2) read with section 18 of Payment and Settlement Systems Act 2007 (Act 51 of 2007), section 11(1) of the Foreign Exchange Management Act, 1999, Rule 9(14) of the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, and all other laws enabling the Reserve Bank in this regard, the RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.

Chapter I – Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India (All India Financial Institutions – Know Your Customer) Directions, 2025.
2. These directions shall come into force with immediate effect

B. Applicability

3. These Directions shall be applicable to All-India Financial Institutions (hereinafter collectively referred to as ‘AIFIs’ and individually as an ‘AIFI’) viz. Export Import Bank of India (‘EXIM Bank’), National Bank for Agriculture and Rural Development (‘NABARD’), Small Industries Development Bank of India (‘SIDBI’), National Housing Bank (‘NHB’) and National Bank for Financing Infrastructure and Development (‘NaBFID’).
4. These directions shall also apply to those branches and majority-owned subsidiaries of the AIFI which are located abroad, to the extent they are not contradictory to the local laws in the host country, provided that: (1) where applicable laws and regulations prohibit implementation of these guidelines, the AIFI shall bring the same to the notice of the RBI. The RBI may advise the AIFI to take further necessary action, including application of additional measures to manage the ML / TF risks. (2) in case there is a variance in KYC / AML standards prescribed by the RBI and the host country regulators, branches / subsidiaries of the AIFI shall adopt the more stringent regulation of the two.

C. Definitions

5. In these Directions, unless the context otherwise requires, the following meanings are assigned to the terms herein:

(1) Terms bearing meaning assigned in terms of the Prevention of Money-Laundering Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005:

(i) ‘Aadhaar number’ shall have the meaning assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);

(ii) ‘Act’ and ‘Rules’ mean the Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, respectively and amendments thereto.

(iii) ‘Authentication’, in the context of Aadhaar authentication, means the process as defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.

(iv) Beneficial Owner (BO)

(a) Where the customer is a company, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical persons, has / have a controlling ownership interest or who exercises control through other means.
Explanation: For the purpose of this sub-clause-
• ‘Controlling ownership interest’ means ownership of / entitlement to more than 10 percent of the shares or capital or profits of the company.
• ‘Control’ shall include the right to appoint the majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements.

(b) Where the customer is a partnership firm, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person(s), has / have ownership of / entitlement to more than 10 percent of capital or profits of the partnership or who exercises control through other means.
Explanation: For the purpose of this sub-clause, ‘control’ shall include the right to control the management or policy decision.

(c) Where the customer is an unincorporated association or body of individuals, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has / have ownership of / entitlement to more than 15 percent of the property or capital or profits of the unincorporated association or body of individuals.
Explanation: Term ‘body of individuals’ includes societies. Where no natural person is identified under (a), (b) or (c) above, the beneficial owner is the relevant natural person who holds the position of senior managing official.

(d) Where the customer is a trust, the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with 10 percent or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership.

(v) ‘Certified Copy’ – Obtaining the certified copy by the AIFI shall mean comparing the copy of the proof of possession of Aadhaar number where offline verification cannot be carried out or the officially valid document produced by the customer with the original, and an authorised officer of the AIFI shall record the comparison on the copy as per the provisions contained in the Act. Provided that in case of Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), as defined in Foreign Exchange Management (Deposit) Regulations, 2016 {FEMA 5(R)}, the AIFI may alternatively obtain the original certified copy, certified by any one of the following: (a) authorised officials of overseas branches of Scheduled Commercial Banks registered in India, (b) branches of overseas banks with whom Indian banks have relationships, (c) Notary Public abroad, (d) Court Magistrate, (e) Judge, (f) Indian Embassy / Consulate General in the country where the non-resident customer resides.