A government-level committee, led by M. Nagaraju, Secretary, Department of Financial Services (DFS), last month finalised a framework for a revamped electronic know your customer (eKYC), including a common form for all banking institutions to ease the burden on customers, a senior government official said.
The committee's recommendations include a common KYC form, risk-based graded eKYC norms, and KYC portability, meaning customers will no longer need to undergo the same process multiple times across different financial institutions.
“There are many recommendations. One of them addresses the harassment caused by repeatedly asking citizens to complete eKYC for different institutions. Regulators will now issue detailed guidelines to avoid such duplication. Other aspects include KYC portability and aggregator-related frameworks — the idea is to streamline the entire process,” the official said.
The revamped eKYC norms are expected to reduce repeated verification requests, and promote interoperability between financial institutions.
The standardised guidelines have been communicated to the financial regulators who will now ensure implementation soon by their respective Regulated Entities (REs), such as banks, NBFCs, insurers, and pension funds, the official added.
While, the risk-based approach would allow flexibility based on the nature of customer and product, the revamped eKYC guidelines are also expected to support aggregator platforms and a centralised infrastructure, ensuring greater interoperability between financial institutions and smoother customer onboarding.
“A committee set up by the Department of Financial Services had finalised the recommendations. The first fundamental principle is to have a common eKYC norm across all regulators, followed by a risk-based graded eKYC system,” the source added.
This panel has also held consultations with stakeholders as late as April to garner inputs on further easing the KYC process.
The process of revamping India’s central KYC system has been in the works for a while. Finance Minister Nirmala Sitharaman in her speech while presenting the Budget for 2025-26 said, "simplifying the KYC processes, the revamped central KYC registry will be rolled out in 2025, we will also implement a streamlined system."
However, implementation across the country may not be easy.
“Central KYC is taking longer than expected. It is going slower than expected so it needs more time, because as it has to cover 140 crore people,” a second official said.
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