What Is Re-KYC?
In India, Banks and other regulated financial entities are required to periodically update the Know Your Customer (KYC) details of their customers. This periodic update is referred to as Re-KYC, short for renewal or revalidation of KYC. Re-KYC ensures that customer identity information, address records and risk categorisation remain accurate over time. The Reserve Bank of India (RBI) has laid down the regulatory framework for Re-KYC under the Master Direction on KYC (2016), with subsequent clarifications to streamline digital submission, self-declarations and risk-based intervals.
Re-KYC applies to both new and existing customers. While the initial KYC process takes place at the time of account opening, Re-KYC may be required every two, eight or ten years depending on the customer’s risk category. For customers, Re-KYC prevents account restrictions and ensures uninterrupted access to banking services. For financial institutions, it supports anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations, and reduces compliance exposure arising from inaccurate or outdated customer profiles.
Why Re-KYC Is Needed
The rationale behind Re-KYC sits at the intersection of regulatory compliance, financial system security and customer continuity. At the regulatory level, Re-KYC supports India’s obligations under the Prevention of Money Laundering Act (PMLA), 2002, and associated Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) frameworks. The Reserve Bank of India’s KYC Master Direction (2016) requires all regulated entities to maintain updated customer information, with periodic verification forming a critical control against misuse of financial channels for illicit purposes.
From a systemic perspective, Re-KYC helps banks maintain traceable and contactable customer records. Over time, changes in address, occupation, income, mobile numbers or identification credentials can disconnect customers from their accounts, complicate dispute resolution and increase the risk of transactions going unreported. This becomes particularly relevant for dormant or low-activity accounts, where beneficiary claims, refunds or subsidy payments may be delayed due to outdated details.
For customers, the need for Re-KYC is largely practical. Banks may temporarily restrict high-risk accounts or delay services if required documentation is not updated within stipulated timelines. Conversely, completed Re-KYC ensures seamless access to digital channels, investment products, payment systems and government benefit transfers. Viewed through this lens, Re-KYC is less about procedural formality and more about maintaining uninterrupted participation in a digitally oriented financial ecosystem.
Eligibility For Re-KYC
Re-KYC applies to all customers who maintain an ongoing relationship with a regulated financial entity such as a bank, payments bank, NBFC, brokerage or digital wallet provider. However, eligibility for Re-KYC does not arise uniformly across all customers at the same time. Instead, it depends on the date of initial KYC completion, the customer’s risk category and whether any material change in personal details has occurred since onboarding. For example, high-risk accounts are subject to more frequent periodic updates than low-risk accounts due to their greater exposure to transactional complexity and compliance sensitivity.
A customer may also be asked to complete Re-KYC outside the periodic cycle if their bank observes significant changes in usage patterns, suspected fraud, sudden increases in transaction volumes or data inconsistencies. Although such instances are less common, they underline the dynamic nature of Re-KYC in supporting risk monitoring and fraud prevention. By contrast, customers whose details remain unchanged for extended periods may only need to provide a self-declaration to confirm that the information on record remains accurate.
Eligibility may also be triggered by customer life events such as relocation, change of employment, change of nationality or updated government-issued documents. From a customer standpoint, fulfilling Re-KYC requests ensures continuity of service and prevents temporary restrictions on accounts or delays in accessing digital banking, payments or investment platforms. The eligibility criteria therefore serve both regulatory compliance and customer protection objectives.
Periodic Re-KYC Requirements
Under the RBI’s risk-based framework, the frequency of Re-KYC depends on the customer’s risk profile. Financial institutions categorise customers as low, medium or high risk based on a combination of factors such as nature of business, transaction patterns, geography, account type and historical behaviour. This approach ensures that enhanced due diligence is reserved for customers who pose higher compliance exposure, while routine individuals remain subject to lighter oversight.
The periodicity prescribed under the RBI’s KYC Master Direction (2016) is as follows:
Risk Category | Re-KYC Interval |
High-Risk | Every 2 years |
Medium-Risk | Every 8 years |
Low-Risk | Every 10 years |
These intervals are intended to balance regulatory vigilance with operational pragmatism. High-risk categories may include customers whose activity or business lines expose institutions to laundering or fraud risks, while low-risk customers typically hold straightforward retail accounts with limited complexity. Importantly, the framework does not require banks to insist on fresh documentation every time a periodic Re-KYC becomes due. If the details previously submitted remain valid and unchanged, a self-declaration may be sufficient.
Beyond these timelines, Re-KYC can be accelerated if customer information becomes outdated or inconsistent before the next scheduled review. For instance, a change in address, contact number or identity documents may prompt a bank to request early Re-KYC to maintain accurate records. Likewise, accounts that exhibit unusual transactional activity or sudden behavioural divergence may be reviewed earlier as part of ongoing monitoring.
Re-KYC Documents
The documentation required for Re-KYC depends on whether any change in customer information has occurred since the last KYC update. If there is no change in details such as address, identity or contact information, a simple self-declaration may be sufficient. Many banks permit this through digital channels including email, mobile banking applications and internet banking portals, provided the customer’s details match the information already registered with the institution.
If changes have occurred, customers may be asked to provide updated proof of identity or proof of address. Commonly accepted documents include Aadhaar, passport, voter ID, driving licence, NREGA job card and other officially valid documents (OVDs) as defined by the RBI. For address changes, current utility bills or rental agreements may also be accepted under certain conditions, depending on the institution’s internal policies and verification mechanisms. The intention is not to duplicate documentation unnecessarily, but to ensure that records remain accurate and traceable.
In addition to identity and address proofs, banks may request updated contact information such as mobile numbers or email addresses. This is particularly relevant for customers who rely on digital banking services, SMS alerts or two-factor authentication (2FA). For institutional or high-value accounts, further documentation may be sought as part of enhanced due diligence, though such cases are the exception rather than the norm for retail customers. The principle remains that documentation requirements should be proportionate to risk and aligned with RBI directions.
Re-KYC Process
The Re-KYC process can be completed through several channels, reflecting the RBI’s guidance to make periodic updates more customer-friendly. Traditionally, customers visited bank branches to submit updated documents, but the increasing use of digital banking has broadened the available choices considerably. Today, Re-KYC may be completed through mobile banking applications, internet banking portals, business correspondents (BCs), registered email IDs and, in some cases, Video-based Customer Identification Process (V-CIP). The availability of these channels varies across institutions, but the regulatory direction favours multi-channel accessibility to reduce friction for customers.
For updates involving no change in personal details, the process is typically straightforward. Customers may receive a notification from their bank requesting confirmation that their existing KYC information remains accurate. Upon providing a self-declaration through a designated channel, the bank updates its records and completes the Re-KYC cycle. Where changes in identity, address or contact information have occurred, customers may be required to upload or present updated documents for verification. This may be followed by an authentication step, especially where digital submissions are involved.
Business correspondents continue to play an important role in supporting Re-KYC in semi-urban and rural areas. Their presence enables customers to complete verification without travelling to branches, which is particularly beneficial for account holders reliant on government benefit transfers and direct benefit transfer (DBT) schemes. For digital-first customers, V-CIP offers an added level of convenience. Banks equipped with V-CIP systems may conduct Re-KYC through secure video sessions, allowing verification officers to authenticate identity documents and confirm liveness without in-person visits. These digital advancements have collectively reduced delays and made compliance more attainable for a diverse customer base.
Difference Between KYC And Re-KYC
KYC and Re-KYC are often mentioned together, but they serve different purposes within the lifecycle of a customer’s relationship with a financial institution. KYC is conducted at the time of onboarding to verify the customer’s identity, address and risk profile before services are activated. It ensures that only legitimate individuals and entities can open accounts or access regulated financial channels. Re-KYC, by contrast, is periodic. Its purpose is to ensure that the information collected during onboarding remains accurate and valid as the customer’s circumstances evolve.
Another difference lies in the intensity of documentation. Initial KYC typically requires comprehensive submission of identity and address proofs, supported by in-person verification or digital verification processes such as Aadhaar-based authentication or Video-based Customer Identification. Re-KYC may require documentation only in cases where information has changed. If details remain unchanged, a self-declaration may suffice. This conditional documentation structure reflects the risk-based approach encouraged by the RBI and reduces unnecessary operational burden for customers and institutions alike.
The distinction also influences customer experience. While KYC marks the beginning of a financial relationship, Re-KYC preserves continuity. Without Re-KYC, accounts may face temporary restrictions, especially in cases where compliance exposure is high or information gaps emerge over time. In this sense, Re-KYC complements the original KYC by acting as a maintenance mechanism for AML-CFT compliance and financial system integrity.
Consequences Of Not Completing Re-KYC
Failure to complete Re-KYC can result in temporary disruption of banking and investment services, particularly where the customer has been classified under a higher risk category or where changes in information have created traceability gaps. Banks may place restrictions on account operations, limit digital access or pause certain transactions until Re-KYC is completed. These measures are not punitive; they are designed to mitigate compliance exposure and ensure that financial institutions maintain up-to-date records as required under AML-CFT regulations and the KYC Master Direction.
For customers who rely on digital banking, incomplete Re-KYC can translate into delays in payments, transfers or authentication processes. In more sensitive cases, withdrawal limits may be imposed, or the account may be converted into a limited-KYC mode until verification is concluded. For accounts that receive government benefits or subsidies through direct benefit transfer (DBT), outdated KYC information may result in delayed credits or failed transfers, especially if mobile numbers or bank details are no longer current.
Uncompleted Re-KYC also affects institutions by increasing operational risk and compliance liability. Outdated information complicates customer outreach during dispute resolution, fraud investigations or dormant account settlements. At scale, such information gaps can slow system-wide reconciliation efforts and create financial uncertainty for stakeholders. The consequences therefore extend beyond individual inconvenience and highlight the role of Re-KYC as a structural safeguard in a modern financial system.
Role Of Digital Re-KYC And Video-Based Verification
Digital Re-KYC has become central to how financial institutions manage periodic verification in an increasingly online environment. Banks and other regulated entities have been moving away from branch-heavy processes and towards digital channels that allow customers to complete updates remotely. This shift reflects both regulatory encouragement and consumer expectations. Today, many customers prefer to authenticate and verify identity through mobile applications, secure portals or email-based workflows rather than visiting a physical branch.
A key component of this evolution is the Video-based Customer Identification Process (V-CIP). Initially introduced to support digital onboarding, V-CIP now has a role in Re-KYC as well. It enables banks to authenticate identity documents, verify facial attributes and establish liveness through real-time video interactions. Verification officers conduct the process remotely while ensuring compliance with regulatory safeguards. This mechanism reduces turnaround time and creates a seamless alternative for customers who may otherwise face delays due to travel limitations or branch congestion.
Business correspondents (BCs) continue to complement digital channels, particularly in regions where connectivity or digital literacy remains uneven. Their presence allows institutions to balance compliance requirements with financial inclusion goals, ensuring that Re-KYC does not become a barrier for rural and semi-urban customers. Combined, these developments demonstrate how Re-KYC has matured from a static compliance requirement into a layered and technology-enabled function that aligns with India’s broader digital economy.
