The Reserve Bank of India (RBI) on November 28, 2025 issued the Reserve Bank of India (Payments Banks – Know Your Customer) Directions, 2025, prescribing comprehensive KYC (Know Your Customer) and AML/CFT (Anti-Money Laundering/Combating Financing of Terrorism) requirements for Payments Banks. The Directions are aimed at preventing the misuse of banks for money laundering or terrorist financing, in line with India’s obligations under the Prevention of Money Laundering Act, 2002, and international standards such as FATF. They cover all local branches, majority-owned subsidiaries abroad (subject to host country laws), and provide definitions, frameworks, and compliance obligations for customer identification, due diligence, and record-keeping.
Under these Directions, banks are required to establish robust Board-approved policies and risk management frameworks for customer acceptance, due diligence, and ongoing monitoring. Customer Due Diligence (CDD) procedures are specified for individuals, sole proprietors, legal entities, and beneficial owners, including verification of identity, ownership, and control. Banks must also implement enhanced and simplified due diligence measures based on risk assessment, and comply with FATCA, CRS, and other international reporting obligations.
The Directions further detail digital and video-based customer identification (Digital KYC and V-CIP), management of small accounts, verification of officially valid documents, maintenance of KYC records, and reporting obligations to the Financial Intelligence Unit – India. They cover domestic and cross-border wire transfers, correspondent banking, and measures to identify suspicious transactions. Banks must ensure periodic updation of customer information and adherence to prescribed AML/CFT standards while maintaining audit trails and regulatory reporting.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/218 DOR.AML.REC.No.137/14.01.009/2025-26]
