The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Local Area Banks – Know Your Customer) Directions, 2025.
The following has been stated: -
•The Reserve Bank of India (Local Area Banks – Know Your Customer) Directions, 2025, are issued under various Acts (including the Banking Regulation Act, 1949, and PMLA, 2002) to prevent Money Laundering and Terrorist Financing by Local Area Banks (LABs).
•These directions mandate comprehensive Customer Due Diligence (CDD), which involves identifying and verifying the customer and Beneficial Owner (BO) using reliable documents.
•Key definitions cover Officially Valid Documents (OVDs), the role of the Central KYC Records Registry (CKYCR), and procedures for Digital KYC and 'Small Accounts'.
•The framework emphasizes ongoing monitoring, updating records, and reporting Suspicious Transactions to maintain the integrity of the financial system.
These directions shall become effective on November 28, 2025.
[Notification No.: RBI/DOR/2025-26/243 DOR.AML.REC.No.162/14.01.008/2025-26]
