RBI KYC Guidelines
KYC is how a bank knows who you are. Here are RBI's current rules, and the numbers the exam asks.
KYC (Know Your Customer) is the process a bank uses to confirm who a customer is and where they live before opening an account or giving a loan. RBI sets the rules, which today sit in its Know Your Customer Directions, 2025 for commercial banks. They replaced the Master Direction on KYC first issued in 2016.
KYC protects the bank from fraud and from money laundering, and it gives the bank a verified address and phone number for each customer. For a recovery agent, that verified record is where the contact details in your allocation file come from.
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The Four Parts of a Bank's KYC Policy
RBI requires every bank's board-approved KYC policy to cover four elements.
- check_circleCustomer Acceptance Policy: who the bank will take on. No account may be opened in an anonymous, fictitious or benami (someone else's) name.
- check_circleRisk Management: placing customers in low, medium or high risk categories and watching high-risk accounts more closely.
- check_circleCustomer Identification Procedure: checking identity and address with reliable documents.
- check_circleMonitoring of Transactions: watching accounts for activity that does not match the customer's profile.
Key KYC Terms
- Officially Valid Document (OVD)
- The documents accepted as proof of identity and address: passport, driving licence, proof of possession of Aadhaar number, voter ID card, NREGA job card signed by a state government officer, and a National Population Register letter with name and address. PAN (or Form 60 if the person has no PAN) is also collected.
- Customer Due Diligence (CDD)
- Identifying and verifying the customer and the beneficial owner. It is done when an account opens, and also for walk-in transactions of ₹50,000 or more.
- Periodic updation (re-KYC)
- Refreshing a customer's KYC records at set intervals so they stay current.
- V-CIP
- Video-based Customer Identification Process: a live, consent-based video call in which a bank official verifies the customer. RBI treats it as equal to meeting the customer in person.
- CKYCR
- The Central KYC Records Registry, a central store of KYC records. A customer's KYC Identifier lets a bank fetch existing records instead of asking for the same documents again.
How Often KYC Must Be Updated
Minimum intervals by risk category, counted from account opening or the last update.
| Customer risk | Update at least once every |
|---|---|
| High risk | 2 years |
| Medium risk | 8 years |
| Low risk | 10 years |
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Other Rules Worth Knowing
- check_circleIf nothing has changed, a customer can complete re-KYC with a self-declaration through registered email, mobile, ATM, internet or mobile banking, or a letter. The bank must send at least three notices before the due date and at least three reminders after it, with at least one of each by letter.
- check_circleSmall account: a person without an OVD can open a savings account with limits. Total credits up to ₹1 lakh in a financial year, withdrawals and transfers up to ₹10,000 a month, and a balance of up to ₹50,000. It runs for 12 months, extendable by 12 more if the person shows they have applied for an OVD.
- check_circleBanks must keep identity and address records for at least five years after the relationship ends.
KYC Data Is Confidential
A recovery agent may see a borrower's KYC address, phone number and documents. That information is given to the bank in confidence. Use it only to contact the borrower about the dues. Never share it, photograph it for others, or use it to reach the borrower's relatives or employer.
How the DRA Exam Tests This
Expect questions such as: "Which of these is not an OVD?" (PAN card is a common distractor, since PAN is collected separately), "What are the four elements of KYC policy?" and "How often is KYC updated for a high-risk customer?" (at least once every 2 years).
The trap is mixing up the intervals, or picking the small-account balance limit (₹50,000) when the question asks about annual credits (₹1 lakh).
FAQs
What documents are needed for KYC in a bank?expand_more
Proof of identity and address: Aadhaar verification, or an officially valid document (passport, driving licence, voter ID, NREGA job card or NPR letter), or your KYC Identifier from the central registry. Plus PAN, or Form 60 if you have no PAN. The bank may also ask about your work or income.
How often do I need to update KYC?expand_more
At least every 2 years if your bank rates you high risk, every 8 years for medium risk and every 10 years for low risk. If nothing has changed, a self-declaration is enough.
Can I open a bank account without any ID?expand_more
Yes, a small account, with limits: up to ₹1 lakh of credits in a financial year, ₹10,000 of withdrawals a month and a ₹50,000 balance. It runs for 12 months, extendable by 12 more if you show you have applied for an ID.
Can KYC be done by video call?expand_more
Yes. RBI allows a Video-based Customer Identification Process (V-CIP), and treats it the same as an in-person check.
Next steps
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