Reserve Bank of India (Rural Co-operative Banks – Know Your Customer) Directions, 2025 · RBI/DOR/2025-26/316

RBI/DOR/2025-26/316 DOR.AML.REC.No.235/14.01.005/2025-26 November 28, 2025

Previous Versions Reserve Bank of India (Rural Co-operative 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. Customer Due Diligence (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, the Banking Regulation Act (AACS), 1949, read with section 56 of the Act ibid., 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 (Rural Co-operative Banks – Know Your Customer) Directions, 2025.
2. These Directions shall come into effect from the date of issue.

B. Applicability 3. These Directions shall be applicable to Rural Co-operative Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank'). In this context, rural co-operative banks shall mean State Co-operative Banks and Central Co-operative Banks, as defined in the National Bank for Agriculture and Rural Development Act, 1981.

C. Definitions 4. For the purpose of these Directions unless the context states otherwise, the terms herein shall bear the meanings assigned to them below:

(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 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:

• authorised officials of overseas branches of Scheduled Commercial Banks registered in India,
• branches of overseas banks with whom Indian banks have relationships,
• Notary Public abroad,
• Court Magistrate,
• Judge,
• 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.