(Updated as on 29th December 2025)
The Reserve Bank of India (RBI), through its amendment dated 29th December 2025 to the Master Direction – Non-Banking Financial Companies (Know Your Customer) Directions, 2025, has introduced an important clarification concerning responsibility for verification of customer identity and address under the Central KYC Records Registry (CKYCR) framework.
This update builds upon the existing Customer Due Diligence (CDD) and CKYCR reporting obligations applicable to NBFCs and brings significant operational clarity for regulated entities.
📌 Background: CKYCR Framework under RBI KYC Directions
Under Clause 63 of the RBI KYC Directions, 2025, NBFCs are required to capture, upload, and maintain customer KYC records with the Central KYC Records Registry (CKYCR) in accordance with the Prevention of Money Laundering Act, 2002 and the PML Rules, 2005. The framework ensures centralisation, standardisation, and reuse of KYC records, thereby reducing duplication and enhancing customer convenience.
📋 Key Regulatory Requirements (Pre-Amendment Overview)
Under the existing framework:
| Uploading of KYC Records | NBFCs must upload KYC records to CKYCR within 10 days of commencement of an account-based relationship.Uploads must be made using CERSAI-prescribed templates for:IndividualsLegal Entities (LEs) |
| Applicability Timelines | Individual accounts: All accounts opened on or after 1 April 2017Legal Entity accounts: All accounts opened on or after 1 April 2021 |
| Communication of KYC Identifier | Once generated, the KYC Identifier (CKYC ID) must be communicated to the customer. |
| Ongoing Updation Obligations | NBFCs must: Update CKYCR during periodic KYC updation, orWhenever fresh or updated KYC information is obtained CKYCR subsequently disseminates updates to all reporting entities that have dealt with the customer. |
| Retrieval and Use of CKYCR Data | For account opening or periodic updation, NBFCs must retrieve KYC data using the CKYC ID. Customers should not be asked to resubmit KYC documents, unless: Information has changedRecords are incomplete or outdatedDocuments have expiredEnhanced due diligence is required |
🔔 Key Update: RBI Clarification Dated 29 December 2025
Responsibility for Identity and Address Verification Clarified
The RBI has now expressly clarified that:
The Regulated Entity (RE) that last uploaded or updated the customer’s KYC records in CKYCR shall be responsible for verifying the identity and/or address of the customer.
Implications:
- Any NBFC downloading and relying upon KYC records from CKYCR:
- Is not required to re-verify the customer’s identity or address,
- Provided that the CKYCR records are Current, Complete, and Compliant with the PML Act, 2002 and PML Rules, 2005.
- However, the NBFC continues to remain fully responsible for:
- Overall Customer Due Diligence (CDD),
- Risk profiling,
- Ongoing monitoring, and
- Compliance with all provisions of the RBI KYC Directions.
In essence, the responsibility for verification rests with the last uploading entity, while responsibility for compliance and due diligence continues to rest with the relying NBFC.
⚖️ Regulatory Significance
This clarification brings the following benefits:
- Eliminates duplication of KYC verification across institutions
- Reduces customer friction and repeated document submission
- Strengthens reliance on CKYCR as a single source of truth
- Enhances efficiency in onboarding and periodic KYC updation
- Provides regulatory certainty on accountability among REs
✅ Key Compliance Takeaways for NBFCs
NBFCs should now:
- Review internal KYC and onboarding SOPs to align with the revised position
- Ensure system-level capability to Identify the last uploading RE and Reliably retrieve CKYC records
- Train compliance and operations teams on revised verification responsibility
- Maintain audit trails for reliance on CKYCR data
- Continue enhanced due diligence wherever risk indicators warrant it
📌 A2I Legal’s Advisory
A2I Legal assists NBFCs in:
- Updating KYC and AML policies in line with RBI’s latest amendments
- Conducting compliance gap assessments
- Drafting internal SOPs aligned with PMLA and RBI directions
- Advising on regulatory inspections and supervisory observations
The RBI’s clarification dated 29th December 2025 marks a significant step toward streamlining KYC compliance while strengthening accountability. NBFCs must promptly align internal processes with this updated framework to ensure regulatory conformity and operational efficiency.
📌 For customised advisory or implementation support, reach out to A2I Legal.
