Reserve Bank of India (Non-Banking Financial Companies – Know Your Customer) Directions, 2025 · RBI/DOR/2025-26/361

RBI/DOR/2025-26/361 DOR.AML.REC.No.280/14.01.003/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (Non-Banking Financial Companies – 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 banks 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 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 (FEMA), 1999, section 30A of the National Housing Bank Act, 1987, 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 (Non-Banking Financial Companies – Know Your Customer) Directions, 2025.
2. These directions shall come into effect on the day they are placed on the official website of the RBI.

B. Applicability

3. These Directions shall be applicable to all categories of Non-Banking Financial Company (hereinafter collectively referred to as 'NBFCs' and individually as an 'NBFC'), for all layers, unless specified otherwise. Provided that these directions are not applicable for ‘NBFCs not having any customer interface’. Note: The applicability under these Directions is in line with the regulatory structure for NBFCs as set out in Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025
4. These directions shall also apply to those branches and majority-owned subsidiaries of the NBFC 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 NBFC shall bring the same to the notice of the RBI. The RBI may advise the NBFC 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 NBFC 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’ – The NBFC obtaining the certified copy 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 NBFC 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 NBFC 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. (vi) ‘Central KYC Records Registry (CKYCR)’ means an entity defined under Rule 2(1) of the Rules, to receive, store, safeguard and retrieve the KYC records in digital form of a customer. (vii) ‘Designated Director’ means a person whom the NBFC designates to ensure overall compliance with the obligations imposed under chapter IV of the PML Act and the Rules and shall include the Managing Director or a whole-time Director, whom the Board of Directors has duly authorised. Explanation: For the purpose of this clause, the terms ‘Managing Director’ and ‘Whole-time Director’ shall have the meaning assigned to them in the Companies Act, 2013. (viii) ‘Digital KYC’ means that an authorised officer of the NBFC captures a live photo of the customer and officially valid document or the proof of possession of Aadhaar (where offline verification cannot be carried out), along with the latitude and longitude of the location where such live photo is being taken, as per the provisions contained in the Act. (ix) ‘Digital Signature’ shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section (2) of the Information Technology Act, 2000 (21 of 2000). (x) ‘Equivalent e-document’ means an electronic equivalent of a document that the issuing authority of such document issues with its valid digital signature, including documents issued to the digital locker account of the customer as per rule 9 of the Information Technology (Preservation and Retention of Information by Intermediaries Providing Digital Locker Facilities) Rules, 2016. (xi) ‘Group’ – The term ‘group’ shall have the same meaning assigned to it in clause (e) of sub-section (9) of section 286 of the Income-tax Act,1961 (43 of 1961). (xii) ‘Know Your Client (KYC) Identifier’ means the unique number or code that the Central KYC Records Registry assigns to a customer. Explanation: A customer can obtain his KYC Identifier through the following ways: In the process of opening an account, once the customer’s KYC Identifier is generated by CKYCR and provided to the NBFC, the latter shall share the same with the concerned customer. The customer can also access his KYC Identifier on CKYCR Portal (www.ckycindia.in). (xiii) ‘Non-profit organisations (NPO)’ means any entity or organisation, constituted for religious or charitable purposes referred to in clause (15) of section 2 of the Income-tax Act, 1961 (43 of 1961), that is registered as a trust or a society under the Societies Registration Act, 1860 or any similar State legislation or a company registered under section 8 of the Companies Act, 2013 (18 of 2013). (xiv) ‘Officially Valid Document (OVD)’ means the passport, the driving licence, proof of possession of Aadhaar number, the Voter's Identity Card that the Election Commission of India issues, the job card that NREGA issues and an officer of the State Government duly signs, and the letter that the National Population Register issues containing details of name and address. Provided that, (a) where the customer submits his proof of possession of Aadhaar number as an OVD, he may submit it in such form that the Unique Identification Authority of India (UIDAI) issues. (b) When the customer furnishes an OVD that does not have an updated address, the NBFC shall deem the following documents or the equivalent e-documents thereof to be OVDs for the limited purpose of proof of address:- utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill); property or Municipal tax receipt; pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address; letter of allotment of accommodation from employer that is issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation; Illustration: If a customer is staying in Chennai but their OVD contains an address in New Delhi, they can open an account in Chennai by submitting a deemed to be OVD for the purpose of proof of address. However, as mentioned below in clause (c), they are required to submit an OVD with current address within a period of three months. (c) the customer shall submit OVD with current address within a period of three months of submitting the documents specified at (b) above (d) if the OVD that a foreign national presents does not contain the details of address, the NBFC shall accept documents that Government departments of foreign jurisdictions issue, and a letter that the Foreign Embassy or Mission in India issues, as proof of address. Explanation: For the purpose of this clause, the NBFC shall deem a document to be an OVD even if there is a change in the name subsequent to its issuance provided that it is supported by a marriage certificate that the State Government issues or a Gazette notification, indicating such a change of name. (xv) ‘Offline verification’ shall have the same meaning as assigned to it in clause (pa) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016). (xvi) ‘Person’ has the same meaning assigned in the Act and includes: (a) an individual, (b) a Hindu undivided family, (c) a company, (d) an association of persons or a body of individuals, whether incorporated or not, (e) every artificial juridical person, not falling within any one of the above persons (a to e), and (f) any agency, office or branch owned or controlled by any of the above persons (a to f). (xvii) ‘Principal Officer’ means a NBFC’s nominated officer at the management level, responsible for furnishing information as per rule 8 of the Rules. (xviii) ‘Suspicious transaction’ means a ‘transaction’ as defined below, including an attempted transaction, whether or not made in cash, which, to a person acting in good faith: (a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or (b) appears to be made in circumstances of unusual or unjustified complexity; or (c) appears to have no economic rationale or bona fide purpose; or (d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism. Explanation: Transaction involving financing of the activities relating to terrorism includes transaction involving funds that the NBFC suspects are linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organisation or those who finance or are attempting to finance terrorism. (xix) ‘Transaction’ means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof and includes: (a) opening of an account; (b) deposit, withdrawal, exchange or transfer of funds in whatever currency, whether in cash or by cheque, payment order or other instruments or by electronic or other non-physical means; (c) the use of a safety deposit box or any other form of safe deposit; (d) entering into any fiduciary relationship; (e) any payment made or received, in whole or in part, for any contractual or other legal obligation; or (f) establishing or creating a legal person or legal arrangement.