RBI master-direction · 28 Nov 2025
RBI/DOR/2025-26/218 DOR.AML.REC.No.137/14.01.009/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (Payments Banks – Know Your Customer) Directions, 2025 (Updated as on December 29, 2025) Table of Contents Chapter I – Preliminary A. Short Title and Commencement B. Applicability C. Definitions Chapter II…
RBI/DOR/2025-26/218
DOR.AML.REC.No.137/14.01.009/2025-26
November 28, 2025
Previous Versions
Reserve Bank of India (Payments Banks – Know Your Customer)
Directions, 2025
(Updated as on December 29, 2025)
Table of Contents
Chapter I – Preliminary
A. Short Title and Commencement
B. Applicability
C. Definitions
Chapter II – General
A. Board of Directors / Policies related guidelines:
B. Other General Guidelines:
Chapter III – Customer Acceptance Policy
Chapter IV – Risk Management
Chapter V – Customer Identification Procedure (CIP)
Chapter VI – Customer Due Diligence (CDD) Procedure
A. CDD Procedure in case of Individuals
B. CDD Measures for Sole Proprietary firms
C. CDD Measures for Legal Entities
D. Identification of Beneficial Owner
E. On-going Due Diligence
F. Enhanced and Simplified Due Diligence Procedure
F.1 Enhanced Due Diligence
F.2 Simplified Due Diligence
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
A. Repeal and Saving
B. Application of other laws not barred
C. Interpretations
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 35A of the Banking Regulation Act, 1949, 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, 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.
Provided that this rule shall not apply to ‘small accounts’ referred to in paragraph 28 of Chapter VI.
(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 per cent 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 per cent 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 per cent 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 per cent 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 bank 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 bank 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 bank 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 bank 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 bank 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 bank, 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 bank 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 of 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 bank 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 bank 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) a firm,
(e) an association of persons or a body of individuals, whether incorporated or not,
(f) every artificial juridical person, not falling within any one of the above persons (a to e), and
(g) any agency, office or branch owned or controlled by any of the above persons (a to f).
(xvii) ‘Principal Officer’ means a bank’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 bank 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) ‘Small Account' means a savings account which is opened in terms of sub- rule (5) of rule 9 of the PML Rules, 2005. Details of the operation of a small account and controls to be exercised for such account are specified in paragraph 28.
(xx) ‘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.
(2) Unless the context otherwise requires, terms in these Directions shall bear the meanings assigned to them below:
(i) ‘Common Reporting Standards (CRS)’ means reporting standards set for implementation of multilateral agreement signed to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters.
(ii) ‘Correspondent Banking’: Correspondent banking is the provision of banking services by one bank (the ‘correspondent bank’) to another bank (the ‘respondent bank’). A correspondent bank may provide the respondent banks with a wide range of services, including cash management (e.g., interest-bearing accounts in a variety of currencies), international wire transfers, cheque clearing, payable- through accounts and foreign exchange services.
(iii) ‘Customer’ means a person who is engaged in a financial transaction or activity with the bank and includes a person on whose behalf the person who is engaged in the transaction or activity, is acting.
(iv) ‘Walk-in Customer’ means a person who does not have an account-based relationship with the bank, but undertakes transactions with the bank.
(v) ‘Customer Due Diligence (CDD)’ means identifying and verifying the customer and the beneficial owner using reliable and independent sources of identification.
Explanation: The CDD, at the time of commencement of an account-based relationship or while carrying out occasional transaction of an amount equal to or exceeding ₹50,000, whether conducted as a single transaction or several transactions that appear to be connected, or any international money transfer operations, shall include:
(a) Identification of the customer, verification of their identity using reliable and independent sources of identification, obtaining information on the purpose and intended nature of the business relationship, where applicable;
(b) Taking reasonable steps to understand the nature of the customer's business, and its ownership and control;
(c) Determining whether a customer is acting on behalf of a beneficial owner and identifying the beneficial owner and taking all steps to verify the identity of the beneficial owner, using reliable and independent sources of identification.
(vi) ‘Customer Identification’ means undertaking the process of CDD.
(3) ‘FATCA’ means Foreign Account Tax Compliance Act of the United States of America (USA) which, inter alia, requires foreign financial institutions to report about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest.
(i) ‘IGA’ means Inter Governmental Agreement between the Governments of India and the USA to improve international tax compliance and to implement FATCA of the USA.
(ii) ‘KYC Templates’ means templates prepared to facilitate collating and reporting KYC data to the CKYCR, for individuals and legal entities.
(iii) ‘Non-face-to-face customers’ means customers who open accounts without visiting the branch / offices of the bank or meeting the officials of the bank.
(iv) ‘On-going Due Diligence’ means regular monitoring of transactions in accounts to ensure that transactions are consistent with the bank’s knowledge about the customers, customers’ business and risk profile, the source of funds / wealth.
(v) ‘Payable-through accounts’: The term payable-through accounts refer to correspondent accounts that third parties use directly to transact business on their own behalf.
(vi) ‘Periodic Updation’ means the steps taken to ensure that documents, data or information collected under the CDD process are kept up-to-date and relevant by undertaking reviews of existing records at the periodicity prescribed by the RBI.
(vii) 'Regulated Entities (REs)’ means:
(a) all Scheduled Commercial Banks (SCBs) / Regional Rural Banks (RRBs) / Local Area Banks (LABs) / All Primary (Urban) Co-operative Banks (UCBs) / State and Central Co-operative Banks (StCBs / CCBs), and any other entity which has been licensed under section 22 of Banking Regulation Act, 1949, which as a group shall be referred as ‘banks’
(b) All India Financial Institutions (AIFIs)
(c) All Non-Banking Finance Companies (NBFCs), Miscellaneous Non-Banking Companies (MNBCs) and Residuary Non-Banking Companies (RNBCs)
(d) Asset Reconstruction Companies (ARCs)
(e) All Payment System Providers (PSPs) / System Participants (SPs) and Prepaid Payment Instrument Issuers (PPI Issuers)
(f) All authorised persons (APs), including those who are agents of Money Transfer Service Scheme (MTSS), regulated by the Regulator.
