RBI KYC Update: RBI changed the KYC rules, now grocery shopkeepers will also be able to update, and know the whole process
RBI KYC Update: RBI has changed the KYC rules and allowed banks to update the KYC of customers through their banking correspondents (such as grocery shopkeepers). Also, it has been made mandatory for banks to give prior notice to customers three times for KYC updates.
RBI KYC Update: To facilitate the customers and ease the banking process, the Reserve Bank of India (RBI) has announced two important changes related to the 'Know Your Customer' (KYC) process. According to a notification issued on June 12, 2025, now banks will be able to update and periodically update customers' KYC through their Business Correspondent (BC). Also, banks will have to inform customers at least three times to update KYC in time, in which it will be mandatory to give information by post once.
What is a Business Correspondent
Business correspondents are agents appointed by the bank to deliver its services in rural and remote areas. These can include NGOs, Self Help Groups (SHGs), Micro Finance Institutions (MFIs) and in some cases even your local grocery shopkeeper, if they have received permission from the bank.
New rules related to KYC update
KYC update through BC: Now if the customer only wants to change the address or there is no change in KYC, then they can complete this process through BC by giving a self-declaration. This process will be verified with biometric e-KYC and the documents will be sent to the bank in electronic form. Until this facility is fully implemented in digital form, customers can also provide information in physical form.
It is mandatory to give timely information to the customers: According to RBI, banks have to give information to the customer at least three times before the date of KYC update, in which one is mandatory in the form of an information letter. If the customer still does not update the KYC, the bank will have to give three reminders later. It is mandatory to enter every information and reminder in the bank's system.
Why did RBI make this change
RBI said that due to KYC not being updated on time in many accounts, the government's DBT (Direct Benefit Transfer) schemes like scholarship and pension etc. were getting delayed. This problem was especially seen in accounts opened under PM Jan Dhan Yojana. That is why banks have been instructed to update KYC by organizing special camps in rural areas.
Click here to get RBI's notification PDF
Other simple options
Digital and video KYC: Customers can now update KYC through means like Aadhaar OTP, V-CIP (Video Based Customer Identification Process) and DigiLocker. If the customer's current address is different from Aadhaar, he can update it through a self-declaration. There is also a facility of video KYC in non-face to face mode, which will now be considered equivalent to the physical process.
BLS e-Services Chairman Shikhar Aggarwal says, "The new rules will help customers connect to formal banking services and get the benefits of schemes like DBT on time."
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