RBI Eases KYC Norms: Allows BCs and Video Uploads

In a major move aimed at improving customer convenience and financial inclusion, the Reserve Bank of India (RBI) on June 12, 2025, issued a circular easing Know Your Customer (KYC) norms. The central bank has now allowed Business Correspondents (BCs) to update KYC information and introduced a Video-based Customer Identification Process (V-CIP) for both onboarding and information updation. These steps are particularly relevant for rural and semi-urban customers whose accounts often turn inoperative due to outdated KYC details.

Why in News?

The RBI’s circular dated June 12, 2025, marks a significant change in the way KYC updation can be carried out in India.
With many PMJDY (Pradhan Mantri Jan Dhan Yojana) accounts reported inoperative due to KYC hurdles, the move aims to simplify processes, reactivate accounts, and ensure smooth Direct Benefit Transfers (DBT).

Key Features of the Circular

  • Deadline for KYC Updation: Banks must update KYC for ‘low risk’ customers by June 2026 or within one year from the due date, whichever is later.
  • Video-Based KYC (V-CIP): Customers can now update their KYC via video uploads, enhancing digital accessibility.
  • Business Correspondents (BCs) Empowered: Banks are allowed to let BCs update customer KYC—especially helpful in rural and semi-urban areas.
  • Special Focus on Inoperative Accounts: Reactivation of dormant or frozen accounts can now be done using these simplified methods.
  • KYC Camps in Rural Areas: Banks advised to organize outreach camps to speed up the KYC process in underserved regions.

Background & Context

  • Many PMJDY accounts had become inoperative due to lack of KYC updates, affecting DBT transfers.
  • Earlier, KYC processes required physical visits, causing delays and exclusions, especially in rural areas.
  • RBI’s move aligns with Digital India and financial inclusion goals by simplifying customer verification without compromising on regulatory safeguards.

Significance of the Move

  • Ensures easier onboarding and reactivation of accounts.
  • Helps in seamless welfare delivery, especially in schemes tied to bank accounts.
  • Reduces friction in availing formal banking services.
  • Enables technology to bridge the inclusion gap in financial services.

Expert Insight

  • According to the Payments Council of India (PCI): “Simplifying KYC while maintaining safeguards will accelerate adoption of formal financial services.”
Summary/Static Details
Why in the news? RBI Eases KYC Norms: Allows BCs and Video Uploads
Circular Issued By Reserve Bank of India (RBI)
KYC Deadline for Low-Risk Clients June 2026 or 1 year from due date, whichever is later
New KYC Methods Introduced Video-based Customer Identification Process (V-CIP), BC Updation
Target Beneficiaries PMJDY account holders, rural/semi-urban customers
Implementation Measures KYC camps, digital uploads, 24/7 BC access
Key Objective Reactivate inoperative accounts, improve financial inclusion

Shivam

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