Re-KYC 2025: Simplifying Compliance, Strengthening Trust

Why Re-KYC is Back in Focus

Re-KYC, or periodic KYC updation, has long been part of India’s banking framework. But in 2024–25, it returned to focus. In June 2025, the Reserve Bank of India updated its Master Direction on KYC, setting clearer timelines, communication steps, and operational rules for banks and NBFCs. The regulator also launched a national drive to refresh customer records. Over 1.4 lakh re-KYC camps were held, updating more than 3.5 million accounts by August 2025.

The renewed emphasis came with enforcement. Several banks and NBFCs, including ICICI Bank, Paytm Payments Bank, and Federal Bank, were fined for delays, incomplete documentation, and weak risk categorization. These actions showed RBI’s clear intent: periodic KYC is not optional. It is now a core part of risk control and due diligence.

At the same time, many customers continue to face frustration and confusion. Frequent document requests, unclear messages, and account restrictions created a poor experience. RBI’s challenge now is to balance strong compliance with easy access. It aims to make re-KYC simpler while strengthening trust in the system.

What’s New in the 2025 Framework

The new guidelines keep the earlier structure but focus more sharply on consistency, proof, and oversight.

Another important aspect of the revised framework is the greater reliance on the Central KYC Registry (CKYCR). Regulated entities must now ensure that every new or updated KYC record is uploaded to CKYCR, and check the registry before requesting documents again. This integration cuts duplication, improves data accuracy, and builds a single national record of customer identity.

RBI’s intent is to reduce friction for genuine customers but leave no gaps in compliance. During the transition, RBI has allowed continued access to accounts where re-KYC is due. This gives both institutions and customers more time to comply.

Accounts can stay active for up to one year after the due date or until June 30, 2026, whichever comes later.

Operational Impact and Challenges

These reforms bring real execution challenges. Re-KYC is now a major operational effort affecting both lenders and customers.

A. The compliance burden for lenders

• Banks and NBFCs must track every customer, categorize them by risk, and ensure timely updates.

• Each account now requires proof of all reminders and acknowledgments for audit purposes.

• Compliance, IT, and operations teams must work together to manage data, timelines, and reports.

• Legacy systems and manual processes make it hard to monitor due dates accurately.

• Business Correspondents extend reach but may provide incomplete or inconsistent data.

• The cost of communication, document collection, and verification has risen sharply.

  
  

B. The customer experience problem

• Customers often receive too many messages and find them confusing.

• Many do not understand why re-KYC is required when their data has not changed.

• Account blocks for missed deadlines cause anger and distrust.

• Differences between in-branch, mobile app, and BC-led experiences add more confusion.

• For rural customers, language and access issues make the process harder.

The rising RBI penalties show that weak KYC controls can no longer be ignored. Institutions must now show ongoing due diligence, not just one-time checks. Strong risk management and governance now depend on a solid technology base.

The Strategic Shift: From Reactive to Proactive Compliance

Compliance and risk management are shifting from ad-hoc tasks to a continuous process that builds trust in the system. RBI’s approach combines simplification with strength. The regulator wants banks to make re-KYC simpler for customers, while also improving oversight through automation, audit-ready records, and data-driven monitoring.

Institutions must adopt a new mindset to adjust to this reality.

• Move from manual, reactive compliance to proactive, technology-led monitoring.

• Build systems that detect risk changes automatically and alert teams early.

• Treat re-KYC as a way to renew trust, not just a formality.

• Align the process with customer experience goals instead of only audit readiness.

How OneFin Can Help

At OneFin, we see compliance as a way to build transparency, efficiency, and trust. Our solution helps lenders meet the requirements easily while improving control and customer experience.

1. Risk Categorization Engine: Automatically assigns every borrower a high, medium, or low-risk category at loan booking and schedules the next Re-KYC due date accordingly. 

   
   

2. Re-KYC Workflow Orchestrator: Tracks due dates continuously and automates the entire communication cycle, sending reminders 30 days, 15 days, and on the due date, followed by periodic nudges until completion.

   
   

3. Customer Re-KYC Portal: Enables borrowers to complete Re-KYC securely through OTP verification, with documents automatically fetched from CKYC and synced to the customer’s loan records - no manual uploads required.

   
   

4. Client Verification Dashboard: Gives compliance teams complete visibility of Re-KYC statuses along with access to updated documents for quick review, updates, or approvals.

   
   

5. Audit and Reporting Layer: Generates downloadable Excel reports with customer, loan, and risk details, ensuring complete audit traceability across the Re-KYC lifecycle.

The benefits for lenders are significant:

• Continuous compliance with zero manual tracking.

• Reduced operating effort and faster verification cycles.

• Improved customer engagement through timely, guided communication.

• End-to-end audit readiness through logged actions and automated reports.

With OneFin, Re-KYC becomes not just a compliance requirement, but a foundational framework for ongoing regulatory assurance.

Closing Thoughts

India’s re-KYC reforms mark a turning point in financial governance. The focus has moved from paperwork to ongoing confidence in every account. Re-KYC is no longer a checkbox. It is now a live tool for trust and transparency.

Institutions that keep using manual systems will face higher costs and more compliance risk. Those that use automation and analytics will gain both efficiency and customer goodwill.

OneFin helps financial institutions lead this change. Its risk and re-KYC platform delivers compliance that is smart, efficient, and customer-first, building a system where every verified customer adds to foundational trust.

To know more, schedule a Demo.